One year after the first edition, we present with great satisfaction the second Integrated Report of the Poste Italiane Group. 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. This Report is a concrete representation of how the Group, through its business model and strategy, has been able to manage risks and, above all, to seize the opportunities offered by the context, achieving important results for the Company and stakeholders.
Aware of the importance of the role and responsibilities assumed for the country, the Deliver 2022 strategic plan has the aim of maximizing the value of the largest distribution network in Italy, responding to the ever-changing needs of customers and seizing new business opportunities towards digitisation. The Plan will make it possible to fully capitalise on the strengths that make Poste Italiane’s network which consists of more than 12,800 Post Offices unique by setting targets on realistic assumptions with limited execution risk through a business transformation programme, a focus on changing customer needs and sustainable dividend growth, in line with the Group’s improved operating performance.
The driving force behind this value-creation process over time is a business model which, by making the most of all the capitals on which the Company is based, allows achieving the objectives that the Group has set for each operating sector in an integrated Strategic Plan with ESG objectives. Thanks to a sustainable business model, it becomes possible to face the new challenges offered by increasingly changing and competitive scenarios not only by reacting to risks, but by seizing all opportunities without ignoring their social implications.
It is precisely the set of capital on which this model is based - in particular, intellectual and human capital - that is the fundamental element of success in a rapidly changing market that requires continuous development of its business and ability to innovate. Poste Italiane has proven to be capable of transforming its operating structures and its products and services, through continuous investments in technology and know-how, transforming market challenges into opportunities for the creation of shared value. Also in 2019, the performance achieved registered the validity and effectiveness of the choices made, with growth in the various business segments.
In this context, the ability to create innovation and make it available to all citizens becomes central to providing a timely response to the external needs expressed by stakeholders and to implement an effective strategy at all levels of the organisation. The digital solutions developed not only at product and service level, but also at the level of internal processes and the launch of a structured Digital Transformation path are representative of the approach chosen by Poste Italiane.
Innovation is one of the founding elements of the Group’s integrated strategy, which recognises its value both from an economic and financial point of view and for the achievement of general sustainable development objectives - in particular, those defined by the United Nations for Agenda 2030 (Sustainable Development Goals). For Poste Italiane, being sustainable means defining a clear strategy consisting of elements consistent with the Group’s business objectives and the social needs expressed by the territory.
The commitment to corporate action based on integrity and transparency has led, in particular, to the subscription of the United Nations Global Compact (UNGC), the United Nations initiative that encourages companies to actively promote principles of ethical and responsible business conduct. In addition, with regard to the protection of human rights in relation to gender equality and non-discrimination, the Company is further committed to the Women’s Empowerment Principles, the initiative promoted by UN Women and the Global Compact in support of gender equality worldwide. These initiatives are perfectly consistent with the importance of diversity and inclusion for Poste Italiane, leading to the adoption of a corporate policy dedicated to the issue and making it a pillar of the Group’s Sustainability Strategy.
The effort that Poste Italiane has made to achieve a structured sustainability path that is fully consistent with its business objectives has led the Group to achieve major awards during the year. First in order of time, was the entry in the Dow Jones Sustainability Index, the most prestigious sustainability index that includes only the companies considered the best in the world in the sustainable management of their business. Being admitted both in the “World” segment and in the more restrictive “Europe” segment is an additional reason of pride for the Group.
Poste Italiane’s second Integrated Report provides a clear representation of the sustainability path undertaken by the Group with the aim of sharing with its stakeholders the evolution of the activities undertaken in support of value creation. The Company is aware of its role of responsibility in supporting the country’s development and for this reason, it is committed to taking actions increasingly oriented to promote shared value in the short, medium and long term.
This commitment has resulted in the implementation of strategic choices in the interest of the Company and all its stakeholders by continuing to invest in the main forms of capital: financial, human, physical-structural, intellectual, social and natural. In this regard, the document provides a clear correlation between the governance system, the business model, the risk management system and the strategic objectives and the development of the main forms of “capital” with the aim of illustrating how, through the implementation of specific initiatives to support them, the Company contributes to the development of shared value over time.
The Integrated Report provides a detailed yet concise description of the growing integration of sustainability within the company’s culture, strategy and activities, illustrating its key role as a key driver now at the heart of business decisions. To represent the important goals achieved, the document includes a specific section that illustrates the evolutionary path of sustainability over time and the numerous awards obtained thanks to the constant commitment adopted. In order to complement the disclosure on the Group’s value creation process, the document also presents the update of the study of Poste Italiane Group’s impact on the country’s economy.
With a view to increasing accountability to its stakeholders, the Company is committed to strengthening its reporting activities, going beyond regulatory obligations and adopting a reporting system that promotes further alignment with the main international reference frameworks. The 2019 Integrated Report is, in fact, characterised by numerous innovations, useful to give more distinctive features to the document and to incorporate the most recent trends in non-financial reporting.
As last year, the 2019 Integrated Report has been drafted in accordance with a reporting system defined on the basis of the main international reporting standards, which in addition to the accounting standards in force, also include the Framework for Integrated Reporting published by the International Integrated Reporting Council (IIRC) and the reporting standard “GRI Sustainability Reporting
In addition, given the importance that the SASB (Sustainability Accounting Standards) are assuming in relation to the increasing demands for information from investors for the ESG assessment of target portfolio companies, the document presents which indicators are required by this standard, verifying their correspondence with the reported indicators. With the aim of meeting the need for greater consistency, transparency and uniformity in terms of reporting, the Report also presents which indicators correspond to the “material ESG metrics” presented at the World Economic Forum 2020 in the document “Toward Common Metrics and Consistent Reporting of Sustainable Value Creation” with the aim of providing a common and universal framework for non-financial reporting.
Structure of the Group at 31 December 2019 * The remaining 20% of the share capital of Consorzio Logistica Pacchi ScpA is held by Postel SpA. ** The equity investment of Poste Italiane SpA in MFM Holding Ltd is equal to 9.70% of the shares with voting rights (10.36% of property rights). *** Following the purchase of 250,000 new issue shares on 19 March 2019, the equity investment held by Poste Italiane in Conio Inc.went from 19.94% to 19.74%
Postel SpA This company operates in communication services for businesses and the public administration, providing printing and delivery services, electronic document management solutions, direct marketing, e-procurement, IT services and "portal" website management in support of online payments.
Consorzio PosteMotori This is a non-profit consortium that manages and reports on the payment of prices due by users for the proceedings for which the Transport Department is competent (e.g. issue of "pink sheets", issue and renewal of copies of driving licences, registrations, MOTs, etc.).
This consortium coordinates the activities of the consortium members (Poste Italiane, SDA, Postel and Poste Air Cargo) in transport overland, by air of postal effects, integrated logistics, printing and envelope filling, electronic document management, e-commerce, marketing and telemarketing.
PatentiViaPoste ScpA Non-profit consortium that provides centralised printing services, the dispatch and delivery of new licences and copies of log books.
Indabox Srl This company develops IT and telematic systems offering logistics support to e-commerce, offering customers a collection service of parcels purchased online from authorised retailers.
Consortium for the supply of services relating to the "Electronic Postman" platform, mobile telephony and integrating messaging services (device info services connected with financial instruments) exclusively for Poste Italiane.
Anima Holding SpA Investment holding company in the asset management sector. It controls 100% of Anima SGR, which, in turn, controls 100% of Anima Asset Management Ltd.
Poste Assicura SpA Insurance company that provides personal protection (health and accident), property protection (home and assets) and credit protection (insurance of loans and mortgages from unforeseen events).
sennder GmbH On 7 May 2019, Poste Italiane entered into a partnership with the German digital road-freight-forwarder, sennder GmbH, with the goal of establishing a joint venture in Italy in line with the Deliver 2022 Strategic Plan, to boost the efficiency of long-haul logistics operations (so called Full Track Load). On 24 September 2019, the two companies signed the final agreements governing the arrangements for collaboration in the Full Track Load sector, the joint venture’s operating and governance mechanisms and an investment by Poste Italiane in the capital of sennder. The latter was finalised on 11 November 2019, with the subscription of a reserved capital increase as a result of which Poste holds a 1.63% stake in the German company. Finally, on 12 February 2020, Poste Italiane subscribed a capital increase at nominal value in the Italian joint venture, called sennder Italia Srl, acquiring a 75% stake.
MFM Investments Ltd On 2 August 2019, Poste Italiane, in line with the strategic plan, launched a partnership with the digital asset management company MFM Investments Ltd (Moneyfarm) to offer innovative digital investment and asset management services. The agreement provides that Poste Italiane will distribute an asset management service in Exchange Traded Funds (ETF) with 7 investment lines of which 2 developed exclusively for its customers. As part of this partnership, on 9 August 2019, Poste Italiane signed a contract with MFM Holding Ltd (the company that controls 100% of Moneyfarm) which provides for a capital increase by the latter for a value of approximately €40 million (GBP 36 million) through the issue of convertible preference shares to be subscribed by Poste Italiane, as lead investor, and Allianz Asset Management GmbH (the minority shareholder of Moneyfarm Holding Ltd). The capital increase involves two phases. In the first, which ended in August 2019, Poste Italiane subscribed shares in MFM Holding Ltd for a total value of €15 million, representing 9.70% of voting rights (10.36% of equity rights). The second phase will be finalised in the course of 2020 when the necessary authorisations will be obtained by the supervisory authorities of Germany (Bafin) and the United Kingdom (FCA).
In order to highlight the change in Mistral Air’s mission, also through a rebranding project, the Company changed its name to Poste Air Cargo Srl with effect from 1 October 2019.
Tink AB On 20 December 2019, Poste Italiane signed agreements for the establishment of a strategic partnership with the Swedish company Tink AB, one of the leading Open banking1 platforms in Europe. These agreements provide, in addition to the commercial provision of PSD2 technology solutions, for long-term strategic collaboration as an enabling factor for the expansion of the Poste Group’s digital service offering, including through the sharing of technological developments and the joint development of solutions and services. The agreements also provide for the Poste Group to join with other investors in an increase in the Company’s capital with an investment of around €20 million, following which the Group will hold a 4.8% stake in Tink. The subscription of the capital increase will be completed by the first quarter of 2020.
1. Open banking is sharing of data between different players in the banking ecosystem. With the entry into force of the European PSD2 Digital Payments Directive, European banks are obliged to open up their API (Application Program Interface) to fintech (technology applied to finance) companies and other companies involved in financial products and services. This will allow external companies (third parties) access to payment data thus increasing competition.
Strategic Business Units of the Group The Strategic Business Units, consistent with the Group’s new strategic guidelines reflected in the 2018-2022 Business Plan are: In addition to managing the mail and parcel service, the Mail, Parcels and Distribution SBU also includes the activities of the distribution network and the activities of Poste Italiane SpA corporate functions that provide services to BancoPosta RFC and the other segments in which the Group operates.
The Financial Services SBU includes the activities of BancoPosta RFC, BancoPosta Fondi SpA SGR, the associate Anima Holding SpA and Poste Tributi ScpA in liquidation.
Optimising governance and efficiency � The Head of Corporate Affairs was assigned the role of Deputy General Manager in recognition of the part played by his department in providing strategic guidance and cohesion for the Group, as well as its responsibility for carrying out high-impact, cross-cutting initiatives and integrated management of relations with key stakeholders.
� The centralisation of purchasing and corporate affairs activities at the Parent Company in order to enhance intragroup synergies and ensure unified and integrated governance of the Poste Italiane Group.
� The transfer of the Administration and Financial Statements function back to the CFO, due to the importance of the activities supervised and the central role in disseminating the Group’s financial information to the various stakeholders, as well as the appointment of the current head of the Administration and Financial Statements function as Manager Responsible for Financial Reporting.
Within the business areas and commercial channels, the main organisational interventions concerned the Business Development through: � the further evolution of BancoPosta’s organizational model aimed at strengthening the overall governance of the Group’s financial and insurance business development activities and facilitating interactions with the commercial networks. In this context, the role of the Territorial Marketing function within BancoPosta has been reconfigured with the aim of ensuring a single interface to the commercial channels with regard to training needs on financial products/services, increasing its effectiveness in order to better meet the competitive challenges of the market.
� The establishment of the Global Forwarding function within the Mail, Logistics and Communication sector aimed at developing solutions to respond effectively to the rapidly changing needs of the e-commerce market and, in particular, to intercept flows of cross-border traffic from China.
� The strengthening of the business model of the Business and Public Administration function through the creation of specialised control for the mail and parcel sector and a sales structure focused on the most significant players in the e-commerce sector, in addition to those already existing and dedicated to strategic and high value customers. Moreover, in line with the objective of strengthening Poste Italiane’s position in the parcels sector, during the year, SDA’s sales force was integrated at the Parent Company.
During the year was also the launch of the Financial Education and Best Practices initiative, which reports directly to the Chief Executive Officer, in order to coordinate an action plan designed to educate customers and citizens in general, and to raise their awareness of the Group’s offering and its various businesses, as well as of the solutions and service models of most importance to the community and social cohesion.
Finally, in line with the Group’s strategic guidelines, BancoPosta Fondi SGR is the Poste Italiane Group’s competence centre for the management of financial investments and, to this end, it was conferred BancoPosta’s financial management mandate from 1 January 2019 and Poste Italiane’s liquidity financial management mandate from 1 July 2019.
The customer physical contact channels are managed by two Poste Italiane functions dedicated to the sale of products and services and specialised by type of customer: Post Office Network and Business and Public Administration.
The changes in the workforce of the Post Office territorial network derive from the implementation of the new organisational model introduced for the supervision of Small Business customers and deriving from theFramework Agreement on reorganisation processes signed with the Labour Unions on 8 March 2019, with which the continuation of the Territorial Business Transformation project was presented, the objective of which is to define a territorial operating model, adapted to the new business objectives and supported by leaner and more effective processes, while guaranteeing business continuity and quality of service to the end customer. Organisational interventions were also carried out to increase the effectiveness of the sales force dedicated to the Small Business segment. The new organisational model shared with the Labour Unions in October and adopted from November 2019, provides for the specialisation of consultants in the Financial and Mail, Parcels and Distribution sectors.
Macro Areas Business and Public Administration 12,809 Post Offices 132 Branches
The number of resources is expressed as full time equivalent employees.
Poste Italiane’s logistics network The Group’s mail and parcel services are provided through 2 integrated and synergistic logistics networks in order to maximize the value of the various assets that characterize them: the postal logistics network for the management of mail, now evolved to allow the management of small parcels delivered by letter carriers and the parcel logistics network which, by taking advantage of the SDA Group’s express courier assets, is also able to handle all types of parcel.
2. The token is a small, portable electronic physical device that is used to perform authentication. 3. SPID is the Public Digital Identity System that aims to provide citizens with a unique login system with which to access all Public Administration services.
� more than 30,000 postmen and women on permanent and flexible contracts
All workforce data refers to permanent staff and is shown as full time equivalent employees. * Logistics Network - Macro Areas, whilst coinciding geographically with the Post Office Network - Macro Areas, from 2018 have their own, separate organisations in terms of processes and competences. ** Delivery staff include 26,673 Postmen and women and delivery supervisors (26,716 at 31 December 2018).
Poste Italiane is currently the largest logistics operator in Italy, and is a leading player in the financial, insurance and payment services sector. The Company plays an important role within the country, contributing to the creation of shared economic value for the entire nation: it is, in fact, able to produce wealth and employment not only through its own business, but also generating externalities through the involvement of a local supply chain.
In order to estimate the impact of the Company’s economic activity, an impact analysis model, established in literature, has been used to quantify the “direct” impacts (direct consequences of Poste Italiane’s economic activity), “indirect” impacts (generated by Italian suppliers as a consequence of the purchase of intermediate goods) and “induced” impacts (deriving from consumption expenditure by workers employed in the supply chain). The above model elaborates “Input-Output” multipliers calculated from tables and data provided by ISTAT and the Ministry of Finance. The multipliers show the effects on GDP, taxation, employment and earned income resulting from changes in the expenditure on goods and services in a specific industrial sectors. These effects are the result of intersectoral dependencies present in an economic system, due to which changes in the conditions in one sector of the economy lead to further impacts on related sectors and on the economic system and society as a whole. The multipliers were applied to the “basic” figures obtained internally by the Group.
It is important to underline that the impact on the country system generated by Poste Italiane also derives from investment activities directed to businesses and the State: the former can use the resources collected to carry out their business activities and make new investments; at the same time, investment in government bonds allows to finance public spending. Both types of investment represent a strong boost to the country’s economy and are able to generate considerable externalities on the social fabric. However, from a prudential point of view, the model shown below does not include the impacts generated by investment activities.
DIRECT: INDIRECT + INDUCED: Each €/mln spent by Poste Italiane generates an impact of €3 million on the income of the country’s families
Impacts generated in individual Territorial Areas Considering the Province of the registered office of suppliers, the indirect impacts generated by them in each Territorial Area in 2019 have been identified.
Impacts of Italian SME suppliers Considering the parameters defined by the European Commission, the Italian suppliers that are characterised as Small and Medium Enterprises (SMEs) and the indirect impacts attributable to them have been identified.
Small and Medium Enterprises are a precious resource, in collaboration with Poste Italiane, in the creation of shared value in the national production chain. In 2019, the Group purchased goods and services from over 2,300 SMEs for a total value of €1.2 billion (48% of total purchases from Italian suppliers)
In 2019, SMEs impacted on the level of Gross Domestic Product for a value of €1 billion, leading to the employment of 17,000 people and an income distribution of around €452 million. Finally, more than €300 million have been created in terms of tax revenue. These values are considered as a total effect, therefore including any direct, indirect and induced impact.
The economic value generated and distributed by the Poste Italiane Group Poste Italiane provides information showing the quantification of the wealth produced by the Company and the related impact on the main categories of stakeholders it deals with in its business activities. The analysis, carried out in accordance with the requirements of GRI Standard 201-1, provides an overview of the economic value generated by the Company and the distribution of the value created to its stakeholders, such as suppliers, employees, investors, the Public Administration (PA) and its shareholders.
More than 86% 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 58.2% and 28.5% of the total value distributed.
2. External environment - Risks, opportunities and integrated Risk management model
Poste Italiane has adopted a “materiality analysis” process, structured in accordance with Legislative Decree 254/16 and the reporting standards, 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.
Discussion and evaluation of potential issues with Management (gathered in the Interfunctional Sustainability Group) and with stakeholders
As a starting point, the Company carefully mapped the categories of stakeholder it relates with during the course of its activities, identifying in particular, those stakeholders mostly involved who may affect the achievement of strategic objectives and those who may be affected by them.
The following table shows the stakeholder macro-categories identified, with a brief description of engagement and communication methods provided for each category.
Personnel Internal communication tools (intranet, newsletters, mailshots, Postenews, etc.); Internal and external events for staff; Periodic meetings; First- and second-level bargaining; Periodic staff satisfaction surveys.
The Multi-stakeholder Forum 2019 Various tools are implemented in the dialogue between the Company and its stakeholders.
The additions of this edition concerned the plenary session, attended by opinion leaders expert in the main sustainability issues, and the focus groups, which involved the stakeholders present at the Forum impacted by the same pillar of the Group’s ESG Strategic Plan.
During the Forum, particular attention was paid to the value of sustainability for companies. Thanks to the activities carried out during the various sessions, insights emerged on topics related to the sustainability pillars.
Integrity and transparency. The Pillar Integrity and transparency confirms its centrality in stakeholder assessments.
Both issues that make up the Pillar Integrity and transparency and “Legality and incorporation of ESG criteria within the procurement processes” - are considered a foundation for the Group’s reputation and its role as a driving force for the country’s economic and social growth.
Innovation and digitisation of products, services and processes. The theme “Innovation and digitisation of products, services and processes” was of fundamental importance from the stakeholders’ point of view, considered the beating heart and key to the identification, interpretation and promotion of change. Its central role in the success of the Deliver 2022 strategy is consistent with this vision. Therefore, it is in the interest of a company such as Poste Italiane, which assumes an economic and social role in the territory, to contribute to the modernisation of Italy and digital and technological evolution through the development of new products and services and the adoption of digital technologies to be incorporated into products, services and business processes, in order to be ready to respond to changes in scenario, new customer needs and opportunities offered by social and environmental changes.
Sustainable finance. The incorporation of environmental, social and governance (ESG) criteria into traditional financial processes forms one of the cornerstones of the Company’s sustainability policies. The stakeholders present at the Forum confirmed that the financial segment can in fact help protect society, promote innovation and support economic growth, making an important contribution to the country’s sustainable development. Therefore, the Company recognises the strategic importance of ESG incorporation in investment and insurance policies.
Materiality matrix The materiality matrix represented below identifies the eighteen most relevant and necessary issues to ensure an understanding of the company’s activities, their performance and their economic, social and environmental impacts. The order of priority of the issues has been defined taking into account two aspects: strategic relevance for the Company and perceived relevance for stakeholders.
Innovation and digitisation of products, services and processesOccupational health and safety
Occupational health and safety 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.
Staff; Suppliers and business partners; Financial community; Customers; Independent regulatory and/or supervisory authorities
� Economic � Reinforcement of corporate controls on specific issues (e.g. integrated risk management model, corporate reliability model, anti-corruption, environment, etc.)
Deterioration in the levels of quality provided and increase in the number of complaints
� Strengthening of Company initiatives regarding specific issues (e.g. quality) � Improvement of products and services � Development of customer assistance model � Complaints management � Implementation of the Quality Management System
� Strategic � Human rights � Strengthening of annual training plan � Promotion of communication, training and information initiatives to increase engagement
Independent regulatory and/ or supervisory authorities; European and international authorities; National authorities; Consumer and trade associations
Poste Italiane people � Economic � Strategic � Reputational � Operational
� Management of risks and opportunities relating to ESG factors within traditional investment processes
� Specific organisational responsibility for digital development � Launch of digital initiatives � Partnerships and collaborations with first mover realities in the digital and technological sector
� Constant dialogue with labour union representatives � Implementation of restructuring projects in compliance with the regulatory framework (National Collective Labour Contract and laws), which is characterised by governable social impacts � Management of staff in line with legal requirements, policies and Company procedures
� Personal data protection, cybersecurity and business continuity actions � Investments in IT infrastructure modernisation
� Economic � Constant structured dialogue with bodies and authorities and agreed local community engagement initiatives � Digital and postal financial education programme
Lack of transparency in communication and application of objective assessment drivers in employees’ career paths
� Introduction of control mechanisms for the protection of human rights, equal opportunities, diversity and inclusion
Interconnection between material issues and metrics Poste Italiane adopts an integrated decision-making process, providing for actions aimed at creating value in the short, medium and long term and taking into account the connections and interdependencies between the many factors that affect the Company’s ability to create value over time. Consistent with the integrated thinking that permeates the organisation, this approach involves understanding the degree of combination, correlation and interdependence between issues that have a significant impact on economic, social and environmental performance. To this end, in accordance with the indications of the International <IR> Framework, the interconnections between the material issues for the Group and the main measurement metrics are shown below.
Relations with social partners GRI 402 Relations between employees and management •
Integration of ESG factors into investment policies • FS Percentage of assets subject to ESG valuation
• Quality of universal service • Customer experience in Post Offices • Customer complaints by type • Customer satisfaction • Settlements
Report on Operations at 31 December 2019 2. External environment - Risks, opportunities and integrated Risk management model
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 governance, 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.
Poste Italiane’s SCIGR is a set of tools, organisational structures, corporate rules and regulations designed to ensure sound and correct business practices, in line with the Group’s objectives. This is done through an appropriate process for determining the related actors and the roles and responsibilities of the various oversight bodies and control functions, and for identifying, measuring, managing and monitoring key risks, as well as by ensuring that there are adequate information flows designed to ensure that everyone has the information they need.
This category of risk could influence achievement of the goals set out in the Strategic Plan and are identified, classified and monitored with the involvement of management from the GRM function. This process describes the key nature of the risks, the triggers and the potential consequences or effects, in both financial terms (e.g. losses, increased costs due to delays or the failure to implement restructuring plans and efficiencies, reduced revenue), and in other terms (e.g. customer satisfaction).
Financial risks that are regulated and overseen by supervisory authorities (the Bank of Italy and IVASS, the insurance industry regulator) and the responsibility of the Risk Management units belonging to the various business units, coordinated by the function responsible for coordinating risk governance at Group level. 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. Insurance risks derive from the stipulation of insurance contracts and the terms and conditions contained therein (technical bases adopted, premium calculation, the terms and conditions of cash surrender, etc.). In technical terms, mortality is one of the main risk factors for Poste Vita SpA, i.e. any risk associated with the uncertainty of a policyholder's life expectancy, alongside the risk associated with surrenders.
Outlook: emerging risk management Given the pervasiveness of emerging risks, Poste Italiane considered it necessary to incorporate and manage them within its risk management processes. Emerging risks are disruptive events that can threaten the business model over a long-term horizon (10-20 years) and are potential game changers for the industry and the context in which organisations operate and are usually characterised by elements, such as: � uncertainty and visibility: lack of data to analyse the phenomenon and difficulty in finding skills, knowledge and awareness of the potential effects that emerging risks have on a business model; � timing of the changes: the changes derive from radical changes in the external context of reference (socio-environmental, legislative, technological, habits, etc.) destructively altering routines on several fronts and with unpredictable time escalations; � management complexity: increasing complexity of management methods. There are no immediate response actions as the events are derived from highly interconnected exogenous factors with strong systemic dependencies and time accelerations.
� Difficulties in replacing the means of transport used in the logistics sector
EVOLUTION OF THE PAYMENT SYSTEM Introduction of new payment methods and modification of consumers’ purchasing behaviour in relation to the payment instruments to be used (e.g. cryptocurrency, fintech, etc.)
� Adoption of new technologies that can be extended to the target already customers of Poste Italiane
� Focus on digitally evolved customer types and specific offer creation
� PosteID Digital Identity Service enabled to the Public Digital Identity System (SPID)
� Offering low-cost products to ensure accessibility to the most vulnerable sections of the population
� Development of specific products for population groups with changing needs (e.g. supplementary health care, accidents, mobile phones, etc.)
TIGHTENING OF REGULATION Evolution of the reference legislation applicable to the business with particular reference to environmental variables
� Evolution of the regulations applicable to the business of Poste Italiane
� Adaptation of products to ESG regulatory requirements (sustainable investment products, responsible investment products, etc.)
� Increased turnover of staff with digital skills towards sectors/ companies with greater appeal
� Difficulty to cover employment needs with adequate quality-quantitative mix of resources
� Use of innovative labour markets that could provide new types of skills to Poste Italiane (e.g. start-ups, millennials, etc.)
� Training activities focused on areas such as Digital & Innovation Mindset, Customer Centricity, Financial and Insurance Consulting, Lean Culture, Technical Skills
� Possibility to reach an increasing number of customers and markets
Poste Italiane’s commitment to managing human rights risks Poste Italiane’s commitment to ensuring respect for human rights - promoted in the context of its own activities as well as in the context of activities entrusted to third parties or conducted with partners - is enshrined in the “Group policy for the protection of human rights”, which illustrates the Group-wide structured approach in the protection of human rights. In addition to defining the monitoring and management principles of risks and opportunities relating to all forms of human rights through systematic application at every organisational and functional level within the Company, the Policy also includes Poste Italiane’s commitment to pursuing socially responsible investment and management activities.
� Equal opportunities initiatives (e.g. percentage of women in positions of responsibility)
� Dissemination and updating of knowledge/techniques and regulations as well as behavioural standards
� 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.)
� Communication with the Italian Data Protection Authority in order to provide information and clarifications
� Definition and standardisation of contractual requirements for compliance with data protection regulations
This section complements and supplements the information on the commitment, approach and initiatives to reduce environmental impact provided within the Pillar “Decarbonisation of real estate facilities and logistics”.
� The Board of Directors of Poste Italiane SpA approves the sustainability strategies and guidelines, based on assessments that take into account, among other things, risks and opportunities related to climate change that may be relevant to the Poste Italiane Group’s most effective reputational positioning.
� The Control, Risk and Sustainability Committee (CCRS) has the task of supporting, through an appropriate investigative activity, the evaluations and decisions of the Board of Directors on the Company’s internal control and risk management system, also relating to climate change.
As part of its functions, the CCRS carries out an activity specifically dedicated to climate change. In particular, the Committee carries out its support functions in setting up reporting by examining in advance the general approach on environmental issues, in the definition of strategic objectives, and in monitoring the evolution of environmental sustainability issues also in light of international guidelines and principles on the matter, monitoring the Group’s position.
The Group Risk Management function of Poste Italiane SpA, established within the Corporate Affairs function: � defines, in collaboration with the departments involved, the guidelines and objectives of sustainability and corporate social responsibility for the Group, identifying the set of indicators for monitoring sustainability performance, including specific metrics used to monitor environmental risks and opportunities, in line with best practices and international guidelines on the subject; � is the single point of reference for the governance and management of all risks from a Group perspective, availing itself to this end of the contribution of the specialist units directly reporting to the Group (direct controls), as well as other risk controls (indirect controls) present in Poste Italiane and in Group companies.
Finally, the necessary controls have been established also for investment and insurance processes for the correct identification and management of climate-related risks and opportunities. In particular, as regards investments, BancoPosta Fondi SGR and Poste Vita have set up committees that are responsible for periodically reviewing and assessing the ESG (and therefore also environmental) risk of portfolios and the criteria for assessing the ESG profiles of issuers. In the insurance field, on the other hand, it is the Risk Office function of Poste Vita that is responsible for identifying, analysing and evaluating the signs of change that come from the different aspects of the external environment and, in particular, factors related to climate change. The identification of such signals takes place in coordination with the “Product Committee - ESG Assessments” which is responsible for periodically reviewing and evaluating the criteria for the definition of ESG profiles and the Company’s product catalogue.
The integration of environmental issues has also involved the company’s regulatory system. The Group policy on environmental sustainability is proof of the Company’s commitment to prevent, manage and, where possible, reduce the direct and indirect environmental impacts generated by its activities, as well as to take environmental risks and opportunities 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 order to make the commitments made concrete, the Group is committed to fighting climate change through the definition of specific objectives contained in a specific Pillar of the ESG (Decarbonisation) Strategic Plan dedicated to reducing climate impact.
The Group’s risk management model provides for: � the identification of company activities and organisational areas where an environmental risk, possibly related to climate change, could occur, by applying risk assessment procedures; � the assessment of the risks identified in terms of impact and likelihood through specific metrics and the assessment of the adequacy of the mitigation and remediation measures taken in relation to the identified risks, with a specific focus on climate change; � the conduct of audits in the areas identified as being at greater risk within the Group and externally with suppliers and partners; � the definition of prevention and mitigation action plans, also shared with suppliers and partners, which may include activities to extend, review and strengthen company procedures and controls and specific training and awareness-raising actions on environmental protection.
� Participation in specific training courses and workshops 2. Technological developments Medium-term � Investment in new low-emission technologies (e.g. green fleet, installation of recharging points at Poste Italiane sites to power the electric vehicle fleet, installation of LED lighting, installation of photovoltaic panels)
� Investment in sectors that contribute to the Sustainable Development Goals (SDGs), which are disseminated at international level by the United Nations (e.g. investment in bonds classified as Green, Social and Sustainable in line with the standards and principles defined by the International Capital Market Association).
� 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 Medium-term � Monitoring of reputational risks via management tools
Ph ys ic al ri sk s 5. Extreme weather conditions Medium-long term � Adoption of business continuity plans
The risk assessment process includes, in addition to the identification of downside aspects related to the identified risks, also upside aspects that lead to the identification of some opportunities related to climate.
� Use of more efficient properties 2. Energy sources Medium-term � Use of low emission energy sources
� Use of new technologies 3. Products and Services Medium-long term � Development of low emission services
� Innovation 4. Markets Medium-long term � Access to new markets
� Access to new customer segments requiring insurance coverage 5. Business resilience Medium-long term � Supply chain reliability and ability to operate under various conditions
Metrics and objectives The Company uses metrics to assess climate risks and opportunities in line with its strategy and risk management process.
The same metrics are used to monitor the progress of the environmental impact reduction targets contained in the Decarbonisation Pillar of the ESG Strategic Plan. Currently, the strategy foresees objectives for the future that concern the increase in the number of electric vehicles and the share of green vehicles dedicated to logistics services and the reduction of energy consumption by buildings and related GHG emissions of Scope 1 and Scope 2.
The Mail, Parcels and Distribution segment has been reorganised to serve the growth of e-commerce. In order to increase the market share of Parcel delivery, the Company reached an agreement with labour unions regarding an innovative delivery operating model (Joint Delivery Model), which provides for afternoon and weekend deliveries. Furthermore, the partnership signed with Amazon in June 2018 marks another fundamental step in the implementation of the plan. Finally, investments will be made in new sorting and automation technologies to support the development of the division. In this context, Poste Italiane has also signed a framework collaboration agreement with the Italian Tobacconists’ Federation, which provides for tobacconists operating as pick-up points for mail and parcels. In addition, partnerships with innovative companies in the fields of logistics (sennder) and last mile delivery (Milkman) were finalised in 2019.
�Revenue: €3.5 billion (2017: €3.6 billion), with an increase in revenue from the Parcels segment, and easing of the decline in the Mail segment. �Parcels segment: €1.2 billion (2017: €0.7 billion). �EBIT: operating break-even expected (down €0.1 billion).
From October 2018, the Payments, Mobile and Digital segment, together with PostePay, has been authorised by the Bank of Italy to operate as an Electronic Money Institution in line with the Plan’s objectives. Operating as an internal fintech, it enables full advantage to be taken of the growing convergence between market segments. This division also serves as a competence centre for the implementation of the Group’s digital strategy.
� Total expected PostePay portfolio of 18.3 million cards issued. �Expected card transactions as CAGR up 12%, to reach €1.6 billion.
� 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. �Customers followed by a dedicated consultant: 45-55% (2017: 7%).
In its Insurance Services, Poste Italiane aims to maintain its leadership in the life sector by rebalancing its customer portfolios and shifting from traditional life policies to unit-linked products. The objective is also to achieve significant growth in P&C and private pension plans.
�Revenue: €1.9 billion (2017: €1.5 billion). �EBIT: €0.9 billion (2017: €0.8 billion). �Net profit: 4% CAGR in the period 2017-2022. �Solvency ratio: 203%.
The structural integration of sustainability elements into corporate policies, processes and long-term strategy continued in 2019 and is an established feature of Poste Italiane’s business model.
Evidence of this approach, also in the 2020 incentive scheme, is the assignment of sustainability goals to the Chief Executive Officer/General Manager and consistently, to all key management personnel, the Head of BancoPosta, the Head of Internal Auditing and the heads of the various functions. Moreover, sustainability objectives are monitored and analysed as part of the Group’s risk management process using a specific Group GRC (Governance, Risk & Compliance) platform.
To support the achievement of the objectives set along this path, the Company has undertaken specific actions with the aim of promoting and disseminating, at Group level, a corporate culture oriented towards sustainability throughout the entire value chain. These actions, taken along three main lines - Reporting, Strategy and Governance - have led to important evolutionary transformations that in a short time have led the Company to achieve numerous goals and awards; emblematic, is the entry into the prestigious international sustainability indices.
Intended as a key element to support business strategy, today sustainability is considered an integral component of the company ’s activities, processes and strategy, being embedded in all components of the Company and an essential element for the definition of future strategic and financial choices undertaken by the Group.
A measure of the reputation achieved by Poste Italiane is represented by the many awards and recognitions achieved in recent years, which further strengthen its image and confirm the effectiveness of the activities undertaken.
Top Employer Italy 2020 Poste Italiane is Top Employer Italy 2020. The prestigious award was given to Poste by the Top Employers Institute, the global certification body for excellence in HR practices. The Top Employer Italia 2020 certification is in addition to the other awards given to Poste Italiane by Universum Global, a Swedish company specialized in employer branding.
Best performance in the 500 Top Brand Finance Among the nine Italian brands that entered the Global 500 ranking, Poste climbed 108 positions, recording the highest performance in terms of image and reputation for the insurance industry, also thanks to the dynamism in digital solutions such as Postepay and growth prospects, winning the AAA rating of excellence (read TRIPLE A).
15th in the world’s top 100 insurance companies The Company enters for the first time in the world ranking for reputation and brand value in the insurance industry, ranking directly in 15th place. At the same time in the national ranking, Poste moved from eighth to sixth place.
SMAU Innovation Award Poste is awarded for innovation in the transformation plan of Customer Service in logistics and shipping, financial, insurance and digital payment services.
The Governance award to Poste Vita Capital Finance International awarded Poste Vita with the Best Pension Fund Governance award for combining Environmental, Social and Governance (ESG) principles with the performance required by investors.
DEO Fund obtains Green Star rating Poste Vita’s DEO Fund obtained a five-star rating from GRESB, qualifying as Green Star and, with a score of 86/100, ranked 12th among unlisted real estate investments in the Eurozone in the Offices sector, for compliance with Environmental, Social and Governance (ESG) principles.
posteitaliane.it climbs the European rankings In the Webranking Europe 2019-2020, Poste Italiane is in ninth position, advancing eight steps from the 2018 ranking. Within the Top Ten, the portal www.posteitaliane.it ranks second overall in financial/insurance.
Report on Operations at 31 December 2019 3. Strategy and business model
The Group is included in the prestigious international index for the first time. After the assessment of the company’s performance, Poste was also included in the regional indices Euronext Vigeo Eurozone 120 and Europe 120. In addition, the company is ranked third in the ESG performance evaluation - Environmental, Social and Governance - carried out by Vigeo Eiris both among the 134 companies worldwide and among the 46 European companies in the “Transports and Logistics” sector.”
This year, Poste Italiane is in sixth place in the general ranking of the Integrated Governance Index (IGI), up four positions compared to the previous edition and is in fifth place in the special category dedicated to human resources.
General principles, qualitative objectives and management methods are incorporated into the Company’s policies that regulate the issues identified in the materiality analysis and the areas required by Legislative Decree 254/2016, while specific objectives and targets - quantitative and qualitative - are included in the ESG Strategic Plan.
Tax Strategy The Strategy is arranged as a set of principles and rules aimed at promoting dissemination of the values of honesty, fairness and compliance with tax regulations, thereby encouraging the development of collaborative and transparent conduct towards the tax authorities and third parties, in order to minimise any substantial impact in terms of either tax or reputational risk.
The Policy sets out the principles and methods implemented by the Group to protect and promote the physical and mental wellbeing of people through prevention, a culture of safety and implementation of management systems.
Policy on community initiatives The Policy contains a commitment to respond to the social needs of local communities and the country as a whole with integrity and transparency, in accordance with procedures that aim to ensure the effectiveness of supported initiatives, while avoiding any potential conflict of interest.
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.
Poste Vita SpA's Guideline for investment in sensitive sectors defines measures to identify, assess and monitor exposure to activities that present a relevant intrinsic risk from an ESG point of view, thus enabling environmental, social and governance aspects to be incorporated into the investment process.
Guideline on the exercise of voting rights and engagement activities of the Poste Vita Group
The Policy sets out a clear approach to the issue of human rights, which is broader than legal requirements and enables monitoring and management of risks and opportunities relating to all forms of human rights, and also confirms the Group's commitment to pursuing socially responsible investment and management activities.
The Policy indicates that the Poste Italiane Group is committed to supporting the values of diversity and inclusion through the adoption of corporate, organisational and management mechanisms based on respect for people’s rights and freedom. In this direction, the path undertaken aims to evolve the way in which diversity issues are dealt with, moving from an approach aimed at protecting and integrating diversity to a proactive strategy to overcome any cultural stereotype and to identify and resolve the factors that prevent people from being included in the labour market.
UN Global Compact: is the largest corporate sustainability initiative in the world. An appeal to companies to align their strategies and operations with universal principles in the areas of human rights, labour, environment and anti-corruption and to take actions that promote society's objectives. It is a voluntary initiative to implement the principles of universal sustainability and adopt measures to support the objectives of the United Nations.
UN Women: is the UN entity dedicated to gender equality and empowerment of women. UN Women was established to accelerate progress in meeting their needs around the world. It supports UN member states as they define global standards to achieve gender equality and work with governments and civil society to design the laws, policies, programmes and services needed to ensure that the standards are effectively implemented and truly benefit women and girls around the world.
Anima per il Sociale: an association that brings together a group of managers and companies with the mission of spreading the culture of corporate social responsibility and sustainability among local companies, at an economic, social and environmental level. The partnership enables the Group to access the association’s network- consisting of large companies, associations, non-profit organisations, bodies and authorities - in order to keep up to date through monitoring, communication and training activities and by participating in Corporate Social Responsibility initiatives and events.
CSR Manager: a network made up of professionals working in all kinds of organisations (companies, business foundations, trade bodies, the Public Administration, non- profit entities) who manage social, environmental and sustainability issues relating to business activities. This network of association provides the opportunity to participate in conferences held, access documents and studies prepared by the network and share best practices with the other members.
The Plan is based on the need to respond proactively to the continuous evolution of the market and to seize - and possibly anticipate - new business opportunities. The pursuit of long-term value creation for the Company, customers and the community makes it necessary to evolve the operating structure, update skills and invest in new technologies.
Mail, Parcels and Distribution Services • Universal Postal Service • Delivery of mail and parcels • Delivery of e-commerce products • Electronic communications
Physical-structural • properties, Post Offices, branches and ATMs • logistics network • hardware IT infrastructure • IT software systems
Intellectual • integrity and transparency • Corporate Governance System • intellectual property rights
Human • talent • specialist and managerial skills • experience • integrity
Social-relational • relations with entities and institutions • union relations • relations with other stakeholders
Key performance indicators of business activities (Output) See the following tables: «Main KPIs of the Mail, Parcels and Distribution Services sector»
Financial Services • Collection and Management of postal savings • Asset Management • Collection and payment services • Placement and distribution of financial products
Social-relational • partnerships and collaborations • collaborative business climate • stakeholder engagement
The main forms of capital Poste Italiane uses to create value over time Poste Italiane’s business is based on capital characterised by heterogeneity that has its own identity and certain qualities. This makes it possible both to specifically describe them and to measure them through performance indicators: the table below shows the peculiarities of each capital by referring to the paragraphs of this document where a more detailed description is provided.
INPUT: � GRI 102-8 Number of personnel by contract type and gender
� Average hours of training for employees by gender and category
� GRI 403-2 Type of injury, injury rate, lost day rate, occupational disease rate, absentee rate and work-related fatalities at the Group
� New customers in the categories most at risk of financial exclusion as a percentage of total new acquisitions
� GRI 405 Diversity and Equal Opportunity � GRI 412 Evaluation of respect of human rights
� Monetary contributions related to activities with the ability to influence public policies
Poste Italiane has issued shares listed on the Mercato Telematico Azionario (the MTA, an electronic stock exchange) organised and managed by Borsa Italiana SpA as of 27 October 2015. At 31 December 2019, the Company is 29.3% owned by the Ministry of the Economy and Finance (MEF) and 35% owned by Cassa Depositi e Prestiti SpA (CDP), also controlled by the MEF. The remaining shares are held by institutional and retail investors.
In the period between 4 February and 29 March 2019, Poste Italiane purchased 5,257,965 treasury shares (0.4026% of the share capital) at an average price of €7.608, making a total cost of approximately €40 million. This initiative is aimed at creating a stock of securities partly to service any future staff incentive plans. The purchases were made as 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 and following authorisation resolved by the Shareholders’ Meeting of 29 May 2018.
The Corporate Governance structure reflects the provisions of Legislative Decree no. 58, 24 February 1998 (the Consolidated Law on Finance), where applicable, the Supervisory Standards issued by the Bank of Italy and applicable to Poste Italiane in view of the unbundled activities conducted by BancoPosta RFC (BancoPosta RFC), the legislation applicable to electronic money institutions as regards the activities carried out by Poste Italiane in implementation of the agreements entered into with PostePay – the ring-fenced EMI, and the recommendations of the Corporate Governance Code for listed companies endorsed by Borsa Italiana in force as of 31 December 2019.
Poste Italiane has adopted a traditional governance model, separating the roles of the Board of Directors and the Board of Statutory Auditors. The Company’s accounts are audited by an independent firm of auditors.
The Board of Statutory Auditors has 3 standing members and 3 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 35 times during the year.
The statutory audit is currently entrusted to the independent auditors PricewaterhouseCoopers SpA, whose engagement expires on the date of approval of these financial statements for the year ending 31 December 2019. Following the public tender to appoint a single Group auditor, the Ordinary General Meeting of 28 May 2019 resolved to appoint Deloitte & Touche SpA to audit the Poste Italiane Group for the years 2020-2028.
Performance of Poste Italiane shares 5. The Total Shareholder Return (TSR) measures the total annual return for an investor and is calculated by adding the increase in the share price over a determinate period of time to the impact of dividends per share paid in the same period.
6. The FTSE MIB INDEX (Financial Times Stock Exchange Milan Stock Exchange Index) is the most significant stock index of the Italian Stock Exchange.
From the date of listing on the stock exchange (27 October 2015) to the end of 2019, Poste’s share price increased by 50% (while the FTSEMIB index rose by 5%), guaranteeing an overall return for shareholders (TSR) of +88% while the main Italian stock exchange index recorded +20%.
In 2019, global economic growth decelerated as a result of slowing activity in both advanced and emerging economies. US duties and countervailing measures activated by the countries involved, Middle East geopolitical tensions and the slowdown in the Chinese economy have negatively affected international prospects. In the final phase of the year, there were some signs of easing and substantial stability in international trade. However, the risk factors continued to weigh heavily, as evidenced by the forecasts released in November 2019 by the Organisation for Economic Cooperation and Development (OECD) which, in confirming the estimates of world growth in 2019 at +2.9%7, showed a decline for those of 2020.
The expansive phase of the economic cycle in the USA has been going on for eleven years, although it decelerated in 2019 accompanied by the Federal Reserve’s (FED) monetary policy, which reduced the policy rate by 25 basis points (bps) three times in the year. In the third quarter of 2019, according to final data from the US Department of Commerce, Gross Domestic Product (GDP) increased by 2.1%.
The American economy was driven by the trend in household consumption, linked both to the reduction in the unemployment rate (3.6% in October 2019) and the improvement in real wages. As regards trade, in the period January-September 2019, the stabilisation of import flows, partly due to the effects of the increase in duties, was more than offset by difficulties in export growth due to the weakness of world trade, with the effect of a worsening of the trade balance, compared to the same months in 2018.
The Chinese economy remained on a trajectory of gradual slowdown that brought the trend GDP growth rate in the third quarter of 2019 to 6.0%, the lowest value since 1992. However, at the end of the year, there were reassuring signs: the leading indicators for manufacturing and services industry in December 2019 were above the expansion threshold, export orders remained strong and business confidence increased. In addition, in early 2020, the Chinese central bank announced the eighth reduction in the minimum reserve ratio from 2018 to further support the economy. The spread, in January 2020, of the coronavirus epidemic, still unresolved, risks having negative effects not only on the 2020 GDP of the country but also on the growth of the world economy, as the virus began to spread in other countries, reaching Italy in February 2020.
Private consumption could continue to support growth, given favourable labour market conditions. In December 2019, the Governing Council of the European Central Bank (ECB) confirmed the accommodative monetary policy stance introduced three months earlier.
On average in 2019, Italian prices were about half those of the main European partners10. In a context of general price moderation that affected the entire system, it was only at the end of the year that consumer inflation rose in Italy, mainly reflecting the reversal of the trend in energy goods. In December 2019, the Harmonised Index of Consumer Prices (HICP) showed a trend rate of +0.5% year-on-year, three-tenths of a point above the previous month.
The budget law for the three-year period 2020-2022 approved by Parliament in December 2019 was considered modestly expansive for 2020, offering GDP support of 0.1%, due to an increase in expenditure that will be partially financed by higher taxes. The manoeuvre includes a four-year public investment plan dedicated to the implementation of sustainable investments and, in part, to the implementation of measures to reduce emissions (Green New Deal)11. There are also interventions in favour of employees and families that should provide consumption support.
10. ISTAT, Consumer Prices - 7 January 2020. 11. FASI, Manoeuvre 2020: plans for the Green New Deal - 24 December 2019.
The Group’s total revenue amounted to €11 billion and grew by €174 million compared to 2018 (+1.6%) due to the positive contribution of the Insurance Services Strategic Business Unit, which contributed to the formation of revenue with €1,669 million, marking an increase of €199 million (+13.5% on 2018) mainly due to the growth in financial assets in the Life business and higher premiums in the P&C business, as well as the Payments, Mobile and Digital Strategic Business Unit, which recorded an increase of €71 million in revenue (+12.1%) from €592 million in 2018 to €664 million, and the Financial Services Strategic Business Unit, which recorded revenue of €5,213 million (-€8 million compared to 2018).
Adjusted revenue12 also show growth of €327 million (+3.2%) compared to last year, mainly thanks to the positive contribution of the Insurance Services Strategic Business Unit (+€199 million) and Financial Services one (+€145 million).
As mentioned above, the personnel expenses decreased by €241 million compared to 2018 due to the reduction in costs for early retirement incentives, which fell from €619 million in 2018 to €342 million, in relation to both the lower per capita cost achieved also as a result of the introduction of the “Quota 100” pension scheme (governed by Decree Law 28 January 2019, no. 4), and higher recoveries of personnel costs mainly due to changes in estimates made in previous years.
During the year, finance income of €99 million (€8 million in charges in 2018) was realised, of which €61 million related to the revaluation of the investment in SIA SpA already held by FSIA Investimenti following the acquisition of sole control (step up acquisition); €27 million in income from the exercise of purchase options on 7.934% of the SIA shares held by UniCredit and Intesa SanPaolo; €11 million in the share of the investee company’s results net of amortisation of intangible assets identified during the purchase price allocation and €1 million in negative items recognised directly against equity.
Mail, Parcels and Distribution Strategic Business Unit 13. Source: Data Osservatorio eCommerce B2C - Politecnico Milano. 14. Internal processing based on Cerved Databank data, Netcomm 2019.
Regarding state contributions for the editorial tariff concessions applied by the Company, on 22 July 2019, following the notification made by the Italian authorities in relation to the period 2017-2019, the European Commission approved, under EU state aid rules, public service compensation to Poste Italiane for a maximum amount of €171.74 million.
The Budget Law 2020 (Law no. 160 of 27 December 2019) redefined the appropriations for the reimbursement of publishing subsidies, providing for a value of €53.1 million for 2020, €53.2 million for 2021 and €52.5 million for 2022.
Decree Law 162 of 30 December 2019 - as converted by Law no. 8 of 28 February 2020 - lastly ordered that reimbursements of publishing tariff subsidies to Poste Italiane continue “for a duration equal to that of the universal postal service” (i.e. until April 2026). The application of the regulation is subject to approval by the European Commission.
Evolution of the regulatory scenario In September 2019 and at the end of the parcel delivery services market analysis conducted among operators with the aim of defining the relevant markets for regulatory purposes and examining the effects of the growth of e-commerce, AGCom published Resolution 350/19/CONS in which it proposed to increase the level of regulatory oversight of the conditions for the provision of services by intervening in the current national regulatory framework with appropriate procedures to amend the existing rules on the transparency of the technical and economic conditions of offers, as well as the requirements and obligations of licence holders, so that they are in line with and adapted to development in the sector.
Mail, Parcels and Distribution SBU profit or loss MAIL, PARCELS AND DISTRIBUTION
Parcels that can be delivered as standard mail (volumes in m) 51.6 44.5 7.0 15.8%
New PuntoPoste Network (number of lockers and alternative collection points) 6,288 417 5,871 1407.9%
External revenue is down from €3,580 million in 2018 to €3,492 million, reflecting lower revenue from traditional letter post (-€166 million), largely offset by the performance of parcels segment revenue (+€91 million, +11.9% compared to 2018), which grew in the B2C segment driven by the expansion of e-commerce.
Direct Marketing: Service for the sending by companies and Public Administrations of communications with advertising, promotional or informative content.
Other: services for publishers, multi-channel services, printing, document management, other basic services. This item also includes tariff subsidies relating to external revenue earned on products and services discounted in accordance with the law and the Universal Postal Service Compensation (also includes compensation relating to ordinary parcels).
The performance of the Group’s Mail services saw volumes and revenue decrease by 7% (216 million fewer items) and 6% (down €166 million), respectively, compared with 2018. This essentially reflects the structural decline in demand for traditional postal services as a result of the digitalisation of the economy.
Other revenue that includes, among other things, revenue from the Printing services provided by the subsidiary, Postel, is down 4% in volume terms (31 million fewer shipments) compared with 2018, due to a decline in the market for printing services. The corresponding revenue also includes the tariff supplements on the publishing service (€59 million in 2019 and €61 million in 2018).
The performance of the Parcels segment confirms the growth in volumes and revenue of 16% (+21 million more items) and 12% (+€91 million), respectively, compared with the previous year. This is essentially due to the expansion of Poste Italiane’s presence in the B2C segment driven by the e-commerce market, which generated revenue of €383 million, an increase of +27% compared with 2018, on 93 million items shipped (+26%) thus managing to maintain growth in the unit tariff, even in a highly competitive market. The B2B segment also grew strongly (+3 million more parcels, up +10%, equivalent to revenue of +€26 million, up +12%).
+5 +196 +32 * The change between the two years suffers the effect of the new accounting standard IFRS 16, applied starting 1 January 2019.
Quality of the Universal Postal Service The quality results achieved for the Universal Service, whose objectives are defined by AGCom, are shown below. The regulator verifies compliance with the objectives and publishes the results annually. The quality of the Universal Postal Service in 2019 is substantially in line with the objectives. Over the last year and a half, the postal network has undergone a profound reorganisation that has evolved its processes and operating logic. This transformation has had limited, physiological effects on specific KPIs, regarding which the Group has undertaken specific improvement initiatives.
* 2019 figures not yet available. In order to allow for comparison of the two periods, for both years, the results have been stated at November.
In June, a partnership was also established with Zalando to manage the returns of customers in Italy making purchases via the online platform, who are able to return products received via the Post Offices or the PuntoPoste network. To date, the Poste Group has been entrusted with more than 1 million return shipments (around 35% returned through the drop-off point).
Moreover, in line with the evolution of the market and the needs of e-Shoppers, the Group has undertaken a strategic programme based on collaboration with innovative start-ups specialized in last mile logistics for the development of innovative and technologically advanced delivery services, such as the “Scheduled Delivery” service that allows e-Shoppers to request delivery on the desired day and in a specific time slot among those available. The service, offered in partnership with Milkman, has been active on an experimental basis since July in the city of Milan and since October, also in the cities of Rome and Turin.
Also with a view to improving the customer experience, the new range of “Poste Delivery” parcels has been launched, both front-end and online, which reinforces the features of completeness, simplicity and convenience of the service, providing various shipping options and customisation possibilities.
Other On 8 March 2019, a Framework Agreement was signed with the labour unions regarding plans for the reorganisation of Logistics activities, central and local staff departments and the Post Office network. In the following months, further agreements were tagged on to the Framework Agreement, setting out the initiatives to be implemented during the first and second halves of 2019.
Plans to streamline the Post Office network will involve 1,400 FTEs, following the geographical reorganisation that took place in 2018 and the projects implemented in 2019.
The above agreements also envisage the following initiatives that will have a positive impact on employment in 2019: the offer of permanent contracts to 4,452 (3,546 FTEs) staff formerly employed on fixed-term contracts, including 2,640 full-time and 1,812 part-time staff, the proposed conversion of 1,490 staff from part-time to full-time contracts, proposed voluntary redeployment to other parts of the country for 914 people, the recruitment of 900 specialists, the recruitment of 720 new part-time personnel (360 FTEs) for operational sites and Post Offices and the transfer of 520 delivery staff to front-end roles within the Post Office network.
Payments, Mobile and Digital Strategic Business Unit 15. Internal processing and estimates on Bank of Italy data (supervisory reporting flows). 16. AGCom Communications Observatory no. 4/2019. 17. MVNO (Mobile Virtual Network Operators) are virtual operators that do not have their own network infrastructure, but use that of a traditional operator to provide telephony services to their customers. 18. Machine to Machine (M2M) is a technology capable of connecting different devices (machines) to each other, allowing the exchange of data and information.
Market context In the payment card market, based on the latest available figures15, total nine-month transactions in 2019 amounted to €186 billion (+12% compared to the same period in 2018). Transactions are growing at a high rate (+18% compared to 2018), although with a reduction in the average value per transaction for each type of card. Debit cards account for more than 50% of total market transactions (€96 billion). However, prepaid cards continue to show the most significant growth rates (+22% of transactions, +17% of transactions compared to the same period in 2018). The number of payment cards increased (+2.7% compared to December 2018).
According to the latest available figures16, mobile market penetration, in terms of total mobile lines, stands at approximately 172.8% of the population, with MVNOs (Mobile Virtual Network Operator)17 accounting for 15.1%. The total number of lines at 30 September 2019 amounts to 104.1 million, including 23.5 million Machine to Machine (M2M) SIM cards18. PosteMobile, with a total market share of approximately 4.2%, accounts for around 47.5% of the total customers of mobile virtual network operators.
Regulatory environment With reference to the regulatory areas with an impact on the activities of Patrimonio Destinato IMEL (EMI RFC), reference should be made to BancoPosta’s regulatory framework for cross-cutting issues of Transparency and PSD220, The other main regulatory updates during the year are set out below.
Monetics First, with the Order of 23 July 2019, the Bank of Italy updated the “Supervisory Provisions for Payment Institutions and Electronic Money Institutions” by amending, in implementation of the PSD2 and its implementing provisions, the previous Order of 17 May 2016.
In particular, with the new provisions the Authority has: (i) enriched and supplemented with detailed information the content of the Bank of Italy’s programme of activities to be submitted to the Bank of Italy and updated in accordance with the new requirements introduced by the PSD2; (ii) extended the application, with certain specifications, of the definition of “own funds” - introduced for banks and investment firms by the CRR “Capital Requirements Regulation” - to IP and EMI; (iii) Provided
that Paying Institutions and EMI should have government policies and procedures for the management of the security of the provision of payment and e-money services, systems for the prevention and monitoring of security incidents and fraud, and procedures for the storage, monitoring, traceability and limitation of access to sensitive payment data; (iv) updated and integrated the content of the information that Italian institutions provide to the Bank of Italy if they intend to operate abroad; (v) introduced detailed provisions to regulate the provision of the new payment services provided by the PSD2, i.e. the payment order initiation service (PIS) and the account information service (vi) aligned the Supervisory Provisions with the new rules on the protection of customer funds provided by the TUB (Consolidated Law on Banking).
In addition, with reference to the anti-money laundering area, the Bank of Italy published: � on 27 March 2019, the new “Provisions regarding internal organisation, procedures and controls to prevent the use of intermediaries for the purposes of money laundering and the financing of terrorism”. The measure, which implements the provisions regarding organisation, procedures and internal controls contained in Legislative Decree no. 231/2007, as amended by the Anti-Money Laundering Directive, is applicable from 1 June 2019, with certain exceptions in force since 1 January 2020, including: (i) the requirement for corporate bodies to define and approve a sound policy that specifies the choices the party concerned has made regarding the organisational structure, procedures and internal controls, adequate verification and data storage); (ii) the requirement for the parent company to set up a common database); and (iii) the requirement to carry out a self-assessment of money laundering risks.
� On 30 July 2019, the new “Customer due diligence provisions for combating money laundering and financing of terrorism”. This measure also implements the provisions contained in Legislative Decree no. 231/2007, as amended by the AntiMoney Laundering Directive, as well as the Joint Guidelines of the European Supervisory Authorities (ESAs) issued on 26 June 2017 on simplified and strengthened measures of adequate customer due diligence and on the factors that must be taken into account when assessing the risks of money laundering and financing of terrorism associated with individual ongoing relationships and occasional transactions. The new regulatory requirements have been in force since 1 January 2020. In relation to customers acquired before the entry into force of the Provisions for which the regulations in force under Legislative Decree no. 90/2017 established forms of exemption from the obligations of adequate due diligence, the Bank of Italy expects that any missing data and identification documents will be collected during the first useful contact, and in any case no later than 30 June 2020.
of which number of e-commerce transactions (m)* 250 202 48 23.9%
Number of digital - consumer transactions (m) 57.1 47.9 9.2 19.1%
Monetics: prepaid cards (top-ups, payments, withdrawals, fees, issuance), debit cards (Postamat interchange fees on card transactions); Acquiring services (fees on transactions, fees and services) related to the provision of POS (mobile, physical, virtual) for the acceptance of card payments (debit, credit, prepaid).
Revenue from Collections and Payments amounted to €85.7 million, up slightly from €84.9 million in 2018, mainly due to the improved performance of transfers from Postepay Evolution and international fund transfers.
Total costs, including amortisation, depreciation and impairments, amounted to €797.8 million, an increase of 6.6% compared with 2018 due to business growth. In particular, variable traffic costs related to fixed-mobile telecommunications services and those related to card operations23 increased from €193.6 million in 2018 to €229.9 million in 2019.
The costs incurred on the services provided by Poste Italiane’s other segments to the card payments and payment services business grew by 7.2% from €389.8 million in 2018 to €417.8 million in 2019, and mainly include distribution, information system management, back office, anti-money laundering activities, as well as postal services.
During the year, finance income of €99 million (€4 million in 2018) was realised, of which €61 million related to the revaluation of the investment in SIA SpA already held by FSIA Investimenti following the acquisition of sole control (step up acquisition); €27 million in income from the exercise of purchase options on 7.934% of the SIA shares held by UniCredit and Intesa SanPaolo; €11 million in the share of the investee company’s results net of amortisation of intangible assets identified during the purchase price allocation and €1 million in negative items recognised directly against equity.
In 2019, PostePay joined the temporary grouping of Poste Italiane and Postel, which, in implementation of the service entrusted to it pursuant to article 81, of Decree Law 112/2008 regarding the Carta Acquisti (Social Card), and in compliance with Decree Law 4/2019, issued and is managing the payment cards needed to benefit from the Citizens’ Income and the Citizens’ Pension. The process of issuing Cards to eligible beneficiaries began in April 2019 and at 31 December 2019, approximately 1,072 thousand cards are currently being managed.
In December 2019, the new Postepay 2.0 App was released which, in addition to aggregating in a single ecosystem a series of payment services, has completely new graphics and innovative services such as: automatic and recurring top-ups of Postepay, international fund transfer in partnership with Western Union, integration of mobility services previously managed in Postepay + App for the purchase of parking, fuel and tickets and contactless payment with Google Pay also for Postepay Standard cards as well as Evolution.
Collections and Payments With regards to collections, activities in 2019 were aimed at repositioning the collections offering both in terms of digitalisation and compliance with the Digital Italy Agency (AgID)24 standards for payments to Public Administration entities. In this regard, in December 2019, Postepay SpA joined the PagoPA system; its membership as a new-generation Payment Services Provider (PSP), i.e. a financial intermediary for payments made via the internet channel, with a view to PSD2 and alongside Poste, is aimed at intercepting all spontaneous payments to the PA via digital solutions.
Telecommunications With regard to telephony services, PosteMobile Casa has expanded its range of fixed-line telephony services with two new plans: PosteMobile Casa Facile to meet the needs of all customers who use their landline phone mainly to make calls to domestic landline numbers and want to limit their home phone charges and “PosteMobile Casa Internet”, launched at the end of September with the aim of expanding the addressable market and aimed at all customers who use the Internet from home.
24. AGID - Agency for Digital Italy is the technical agency of the Presidency of the Council of Ministers that has the task of ensuring the achievement of the objectives of the Italian Digital Agenda and contributing to the dissemination of the use of information and communication technologies, promoting innovation and economic growth.
Corporate bond spreads in the Eurozone have decreased. Overall, the spread on the bonds of non-financial investment grade companies in the Eurozone stood at around 80 bps at 31 December 2019, a decrease of around 20 bps compared to the end of 2018. The debt spreads of the financial sector also decreased, with the differential with respect to the risk-free rate falling by about 35 bps to about 80 bps.
Banking system On the basis of estimates provided by the Italian Banking Association (ABI)27, in December 2019, customer deposits of the total number of banks in Italy, represented by deposits to resident customers and bonds, rose by 4.8% annually to approximately €1,814 billion (+€87 billion compared to the beginning of the year).
Asset Management The latest quarterly Assogestioni data available28 show at 31 December 2019, total assets amounting to approximately €2,306 billion, compared to €2,018 billion at the end of December 2018 (+14.3%). With regard to Portfolio Management (Retail and Institutional), assets totalled approximately €1,171 billion, up compared to the end of December 2018 (€1,004 billion, +16.7%). On the other hand, with regard to collective asset management (open-end and closed-end mutual funds), customer assets rose from €1,015 billion at the end of December 2018 to approximately €1,135 billion at the end of December 2019 (+11.9%). With regard to open-ended mutual funds alone, assets amounted to approximately €1,071 billion, compared to approximately €955 billion at the end of December 2018 (+12.1% essentially attributable to performance). In terms of inflows, the asset management industry recorded a total positive balance of €76.7 billion in 2019, compared with 9.7 billion last year, also partly as a result of Poste Italiane Group operations.
The “Final Report on EBA Draft Guidelines on outsourcing arrangements” was published on 25 February 2019. This aims to standardise the guidelines for outsourcing arrangements, which intermediaries must comply with by 31 December 2021. These Guidelines have already been applied in the “Regulation governing BancoPosta RFC’s contracting out and outsourcing process”, annexed to “BancoPosta’s Organisational and Operational Regulation”, approved by the Board of Directors at the meeting of 31 January 2019.
On 11 April 2019, the CONSOB announced that it intends to comply with the ESMA Guidelines in force since 30 April 2019 regarding “Guidelines on internalised settlement reporting under article 9 of the Central Securities Depository Regulation (CSDR)”. EU Regulation 909/2014 (the CSDR) is the first European regulation governing the activities of central securities depositories (CSDs) and, among other things, defines settlement internalisers as entities (for example, banks) that execute transfer orders on their own account or on behalf of customers without using a system managed by a central counterparty. In order to monitor these transfers, which are also carried out by Poste Italiane, settlement internalisers must report specific aggregated data on internalised transactions to the CONSOB on a quarterly basis. The first report was submitted on 24 July 2019 and concerned internalized transactions in the second quarter of 2019. In this regard, Poste Italiane has, as permitted by the CONSOB, chosen to delegate the filing of such reports to an external provider.
On 23 September 2019, CONSOB published a consultation document amending the Intermediaries Regulation (Resolution no. 20307) in order to implement the Insurance Distribution Directive (IDD) which, in force in Italian law since 1 October 2018, introduced the rules of conduct applicable to the distribution of insurance investment products or IBIP (Insurance Based Investment Products), which will come into force on 1 April 2020.
In addition, on the same date, IVASS published for consultation the draft Regulation containing provisions on Product Oversight Governance (POG) whose entry into force is set for 31 March 2020. These provisions require companies and intermediaries that manufacture and distribute insurance products to adopt specific processes for the design, review, monitoring, verification and distribution of each new insurance product, before it is distributed to customers, or of an existing insurance product, before the adoption of a significant change. On 5 December 2019, a new Bank of Italy Regulation was published which, together with the CONSOB Intermediaries Regulation, completes the regulatory package for the implementation of the “MiFID2/MiFIR” with a view to allocating responsibilities between the Bank of Italy and CONSOB as defined by the Consolidated Law on Finance (TUF) and replaces, for the areas of competence, the “Joint Bank of Italy and CONSOB Regulation” however without introducing substantial amendments.
Current accounts (average deposits for the period in €bn) 61.9 58.7 3.2 5.4%
Distribution of third-party products: Placement and distribution of products issued by third-party partners (financing, mortgages, loans, credit cards, etc.)
Interest income: Income from investment of liquidity revenue via postal current account deposits.
Revenue from collection and payment services also made a positive contribution, up 4.9% from €965 million in 2018 to €1,013 million in 2019, primarily due to higher income related to transitional current accounts within BancoPosta RFC, which offset the decline in volumes on slips.
The year 2019 saw postal savings net deposits of -€3.5 billion, an increase of more than €1.3 billion on the previous year due to the positive contribution of interest-bearing postal certificates (BFP). In fact, thanks to a range of products always in line with the market context and the issue of dedicated certificates, which have found a largely positive response from savers, BFP Net Deposits were positive by €0.5 billion (+€2.5 billion compared to 2018). Thanks to the result of Net Deposits above expectations and the capitalisation of interest on BFP, the average total balance for the year increased by approximately €2.8 billion (+0.9%) compared to the previous year.
In light of the results illustrated, the Financial Services sector generated EBIT of €874 million in 2019, an increase of 1.7% compared with the previous year (€859 million). Taking into account Financial Management and Taxes, 2019 closed with a Net Profit of €640 million, up 3.7% (+€23 million) compared to €617 million in 2018.
With reference to BancoPosta RFC, following the positive development in revenue volumes and the change in the market scenario, the Leverage Ratio fell during the year to 3.0% at 31 December 2019, taking into account the increase in capital of part of the year’s profits. The CET 1 ratio at 31 December 2019 was 18.3% compared to 18.4% at the end of 2018, confirming BancoPosta’s capital strength.
In 2019, financial management, in line with the provisions of the Deliver 2022 Plan, continued to implement the policy regarding the stabilisation of overall revenue and the investment of private customer current account deposits. The first months of 2019 were characterised by a market with particularly high yields, due to the spread that fluctuated between 260 bps at the beginning of 2019 and almost 290 bps at the end of May. Under these conditions, operations focused mainly on purchases of securities. In addition to the investments of the new private current account deposits, all maturing securities were renewed early and the 2019 investment requirements were completed.
In the second part of 2019, on the other hand, in a context of gradual decline in interest rates and a reduction in Italy’s credit spread, the programme for the realisation of the 2019 gains was completed and the operations for the realisation of the 2020 gains were started, achieving, in this context, a large part of the above.
Lastly, during the year, the Boards of Directors of CDP and Poste Italiane approved a committed line of credit for BancoPosta for a maximum of €5 billion, with a view to possible diversification of BancoPosta’s sources of funding.
Also in line with the Deliver 2022 Plan, commercial initiatives continued in 2019 to focus on enhancing the offering of postal savings products, and developing the distribution of financial, consumer credit and corporate loan products and services.
Current accounts In the area of private current accounts, on 21 October 2019, the new BancoPosta option account was launched, which makes it possible to move from a single account logic to a differentiated offer by option, based on customer needs in line with the Group’s positioning objectives. The new offer includes the possibility to choose between different account options (Start, for those who have basic transactional needs; Medium, for those who need frequent money transfers; Plus, for those who need to pay by credit card and Start Giovani, for customers under 30 years of age).
In the last quarter of 2019, Poste Italiane and the MEF began work on the renewal of the Agreement regulating Treasury services and the remuneration of other payment and collection services for state Public Administrations.
At the date of preparation of this Report, the Company does not believe it necessary to revisit its approach to disputes regarding Interest-bearing Postal Certificates and, as a result, the criteria to estimate the related provisions for risks and charges. Any changes to estimates may take place only following alterations to the procedures currently used. The amount set aside, determined on the basis of the historical series of operating losses, represents the best estimate of the charge required to settle the probable liabilities. Any changes to the aforesaid estimate may only be made after the Authority has agreed to changes to the practices currently adopted, taking into account the decisions that will be made by both the Financial Banking Arbitrator (ABF) and the Ordinary Judicial Authority (AGO).
CONSOB On 12 February 2019, the CONSOB requested clarification regarding the measures adopted to ensure compliance with the rules of conduct for dealing with customers with reference to: i) the provision of advice on insurance investment products; ii) obligations regarding Product Governance and the incentive scheme for network personnel in relation to the distribution of insurance investment products. The above information was provided in a specific response submitted to the regulator on 15 February 2019.
On 23 May 2019, the CONSOB requested additional information on the closed-end real estate Fund, Obelisco, which matured on 31 December 2018, and any initiatives to be adopted by Poste Italiane in order to protect investors, similar to the action taken with regard to the closed-end real estate funds, IRS and Europa Immobiliare 1. The Company responded on 16 June 2019.
On 29 October 2019, CONSOB requested information on the correct fulfilment of transaction reporting obligations. The relevant reply was sent by the Company on 13 December 2019.
Autorità Garante della Concorrenza e del Mercato (AGCM) On 9 March 2015, the Authority notified Poste Italiane SpA of an investigation of BancoPosta RFC for the alleged violation of articles 20, 21 and 22 of the Consumer Code, regarding the Libretto Smart product. On 21 December 2015, the AGCM notified Poste Italiane of its final ruling in which it deemed the Company’s conduct unfair and imposed a fine of €0.54 million, limited to a tenth of the maximum applicable amount taking into account the mitigating circumstance that Poste Italiane had adopted initiatives aimed at allowing customers to benefit from the bonus rate. Poste Italiane lodged an appeal against this ruling before the Lazio Regional Administrative Court, which has adjourned the case until a hearing on the merits to be set.
On 8 October 2018, the AGCM notified Poste Italiane of the launch of investigation PS11215 – pursuant to art. 27, paragraph 3 of Legislative Decree 206/05 (the Consumer Code) and art. 6 of the Regulation for Investigations – with an accompanying request for information pursuant to art. 12, paragraph 1 of the above Regulation. The investigation is in response to complaints filed on 24 July 2018 by “Altroconsumo” and on 8 August 2018 by “Centro Tutela Consumatori e Utenti” (two consumers’ associations). The Authority is primarily looking into an advertising campaign called “Buoni e libretti – Buono a sapersi”, promoting Interest-bearing Postal Certificates and Postal Savings Books via TV and press adverts. The investigation relates to the alleged violation of articles 21 and 22, paragraph 1 and 4 letter a) of the Consumer Code, as the effect of taxation was, in the Authority’s view, not clearly indicated. On 29 October 2018, Poste Italiane replied to the request for information and, following the hearing held at the AGCM on 28 November 2018, sent the Authority the form for the presentation of commitments - pursuant to art. 27 paragraph 7 of the Consumer Code, art. 8 paragraph 7 of Legislative Decree 145/2007 and art. 9 of the aforementioned Regulation on investigation procedures - subsequently supplemented on 11 January 2019. On 1 April 2019, the Authority notified Poste Italiane that the investigation was closed and that it had accepted the commitments, which are now obligatory, without imposing a fine.
Single premiums continued to be the preferred form of payment for policyholders, representing 94% of total premiums written and 64% of policies by number.
With regard, finally, to the distribution channel, around 66% of new business was obtained through banks and Post Offices until December 2019, with premium revenue of about €60 billion, up slightly (+3.6%) compared with the same period of 2018.
Premiums by class** Premiums YTD % change Q3 2019 vs Q3 2018
Measure IVASS no. 92 of 19 November 2019 The measure in question contains the amendments to IVASS Regulation no. 43 of 12 February 2019 implementing the provisions of the Decree of the Ministry of Economy and Finance of 15 July 2019, determined by the optional extension to 2019 of the provisions on the temporary suspension of losses in non-durable securities, already provided for by the previous Ministerial Decree (Decree Law no. 119 of 23 October 2018). The Poste Vita Group has decided not to make use of this option for 2019.
Total revenue is up from €1,472 million in 2018 to €1,670 million (+13.4%), essentially due to the performance of the Life business, which contributed €1,511 million, whilst the P&C business contributed €148 million, net of Poste Welfare and Services revenue and other revenue.
Life net revenue increased by 13.1% (+€175 million compared to 2018) mainly supported by the financial margin (+€120 million compared to the previous year), which benefited from the increase in average assets under management, and lower allocations on Other technical provisions of €34 million, due to the higher profitability of new products for which no further allocations are required and the improved profitability of protection products (+€12 million).
Gross revenue of the Life business amounted to €17.7 billion, up 7% compared to 2018, with a significant shift in favour of Multi-class products (+€5.3 billion compared to the previous year), resulting in an increase in Class III revenue (about +€1,200 million), whose impact on total gross revenue increased from 4.5% in 2018 to 10.9% in 2019.
The P&C business recorded gross premium revenue of €240 million, up 28% on the figure for 2018 (+€53 million), with growth across all lines of business: Welfare (+€41 million or +160%), property and personal protection (+€9 million or +8%) and payment protection (+€3 million or +8%).
The Life business generated net premium revenue of €3.9 billion, down compared with 2018 as a result of an increase in policy expirations (+€2.9 billion compared to the previous year).
Life business technical provisions amounted to €140.1 billion and increased by €15.1 billion compared to 31 December 2018 mainly due to higher mathematical provisions (+€5.6 billion) supported by positive net revenue (+€3.9 billion) and the performance of Deferred Policyholder Liabilities (+€9.6 billion), which includes changes in the fair value of financial instruments used to hedge policies issued; technical provisions for P&C business, net of the portion ceded to reinsurance, amounted to €180 million at the end of the period (€207 million gross of the portion ceded to reinsurance), up 21% from the figure recorded at the end of 2018 (€149 million; €183 million gross of the portion ceded to reinsurance).
Total costs of €664 million are up €58 million compared with the figure for 2018. The increase is primarily due to the performance of inter-segment costs, essentially linked to fees paid for distribution, collection and maintenance services related to the growth in business.
The Insurance Group’s Solvency Ratio at 31 December 2019 stood at 276%, up from 211% at December 2018 (+65 p.p.) mainly due to the evolution of the market scenario (positive effect on the Own Funds and Solvency Capital Requirement, respectively for €841 million and €231 million) and the increase in the Own Funds following IVASS’s authorisation to use the Ancillary Own Funds in the calculation of the Available Capital.
In the P&C segment, 2019 saw the refinement of the product range through the restyling of the “Accidents” and “Senior Accidents” offer and the launch of the new “Poste Salute” product.
Net cash position of the Mail, Parcels and Distribution SBU 815 (1,131) +1,946 -172%
The Poste Italiane Group’s non-current assets amounted to €4,578 million at 31 December 2019, an increase of €1,543 million compared with the end of 2018. This primarily reflects first-time adoption, from 1 January 2019, of the new accounting standard, IFRS 16, resulting in the recognition of right-of-use assets of €1,254 million (which take into account €1,374 million of Assets, €102 million of acquisitions for new contracts and €222 million of amortisation). Investments of €734 million also contributed to the formation of non-current assets, partly offset by amortisation of €552 million.
The development of the potential of the partnership with Amazon is in line with Poste Italiane’s strategy of expanding the logistics segment in connection with online purchases. This is also connected with expansion of the PuntoPoste network for collecting online purchases and sending returns. To date, this consists of over 6 thousand alternative collection points, mainly tobacconists and lockers, which are in addition to Post Offices.
With reference to the technological infrastructure, the transformation programme undertaken foresees an important evolution of applications, with the aim of simplifying the integration of Poste Italiane with the digital ecosystem and in this sense, the activities aimed at creating a single CRM for integrated customer management in all phases of sales and after-sales on the various channels have continued. The introduction of Robotic Process Automation technologies and the dematerialisation and digitisation of operating processes, modernisation of the technological infrastructure and consolidation of the Group’s seven Data Centres also continued. In this regard, the design of the unique Disaster Recovery environment of Poste Italiane on the Turin Data Center and the Rome Campus, consisting of the two Data Centers “Congressi” and “Europa”, to which the Disaster Recovery of some Group companies have migrated in order to maximise synergies and ensure an evolution consistent with the strategies of Poste Italiane, has been completed.
In the Financial Services Strategic Business Unit, total investment amounted to €64 million and regarded initiatives designed to expand the Wealth Management offering (Postal Savings, Life products and Funds) and those aimed at simplifying processes in compliance with sector regulations and improvement of the customer experience from a multi-channel perspective. In particular, in the Postal Savings segment, the main interventions concerned the expansion of 24-hour operations by customers and the integration of the online product sales process.
Investments in the Payments, Mobile and Digital Strategic Business Unit amounted to €56 million; as part of the Digital Transformation programme, the Postepay App has been enriched with new features and the Postepay Evolution and Postepay Evolution Business cards have been enabled for online payments through a service that allows users to store their cards, ensuring a higher level of security as only the token information, unique for each merchant, and not the card data is stored.
Finally, in line with the regulatory roadmap, on 12 September, the new Strong Customer Authentication solution was released on all digital channels (app and web), offering customers a more aware and secure user experience when authenticating and authorising payment transactions.
In the Insurance Services Strategic Business Unit, work continued on operational and infrastructural improvements to key business support systems for €23 million. In the Life business, investments were made in portfolio management systems, while in P&C, a new calculation platform was implemented, the latter preparatory to the Supervisory Authority’s authorisation to use USPs (Unique Selling Proposition). The process of insourcing and revamping customer care using the Group’s TPA (Third-Party Administration) also continued.
The flexible benefit telematic platform has been implemented to support the VIVI WELFARE initiative to allow employees, on a voluntary basis, to opt to use the remaining portions of their bonuses to cover the cost of goods and services with a social impact (e.g. the cost of schooling and children’s education, care services for the aged and dependent family members, health and wellbeing, leisure and entertainment, education and training, local public transport, supplementary pensions and supplementary health benefits).
With regard to financial instruments held by the Financial Services SBU, the overall fair value fluctuation during the period was positive by approximately €5.7 billion and was recognised in a specific equity reserve of €1.7 billion for the portion not hedged by fair value hedges, and through profit or loss for €4 billion for the portion hedged, which speculatively increased the negative balance of fair value hedging derivatives. At 31 December 2019, the balance of these instruments was negative by €5.4 billion (€1.6 billion at 31 December 2018). In addition, as part of these hedging transactions, the Parent Company has increased its Receivables for Guarantee Deposits by approximately €4 billion for amounts paid to counterparties with which Asset Swap transactions are in place.
Analysis of the net debt/(funds) of the Mail, Parcels and Distribution Strategic Business Unit in accordance with ESMA guidelines
The Mail, Parcels and Distribution Strategic Business Unit has seen a decline of €1,946 million from net cash of €1,131 million at 31 December 2018 to net debt of €815 million at 31 December 2019. The change during the period is mainly affected by the application of the new accounting standard IFRS 16 from 1 January 2019. Lease liabilities at 31 December 2019 of the Strategic Business Unit amounted to €1,251 million.
After adjusting for this change, net debt/(funds) is down from €1,131 million at 31 December 2018 to €436 million at 31 December 2019.
Poste Italiane SpA’s net profit for the year ended 31 December 2019 is €661 million (€584 million in 2018).
Trade receivables and Other receivables and assets 4,845 4,415 430 9.7%
Poste Italiane SpA’s net invested capital amounts to €3,719 million at 31 December 2019 (€2,321 million at 31 December 2018).
Non-current assets amounted to €5,815 million, an increase of €1,287 million compared with the end of 2018, mainly due to the application from 1 January 2019 of the new IFRS 16 accounting standard, which led to the recognition of right-of-use assets for €1,119 million (which include €1,230 million of assets, €79 million of acquisitions for new contracts and €189 million of amortisation for right-of-use assets). Investments of €643 million also contributed to the formation of non-current assets, partly offset by amortisation, depreciation and impairments of €485 million.
Further movements also concerned the payment to SDA Express Courier SpA of €25 million to cover losses incurred through 30 September 2019 and the recapitalisation approved by the Extraordinary General Meeting of 27 November 2019; the impairment of the investment in SDA for a total of €32 million based on the impairment test carried out; the capital contribution to FSIA Investimenti Srl for a total of €15 million made on 4 October 2019.
Net working capital at 31 December 2019 amounted to €133 million, an increase of €238 million compared with the end of 2018. This is primarily due to a reduction in payables for early retirement incentives and settlement of the debt due to the subsidiary, PostePay SpA, arising from the transfer of the monetics and payment services business unit to the latter on 1 October 2018.
The balance of Provisions for risks and charges amounted to €1,130 million (€1,431 million at the end of December 2018) and mainly includes provisions for early retirement incentives of €419 million (€444 million at 31 December 2018); this reflects the estimate of liabilities that Poste Italiane will incur, under the current arrangements agreed with the unions, as a result of a
Equity amounted to € 6,328 million and increased by €869 million in relation to changes in the fair value reserve (€1,044 million ), which reflect the fluctuations (positive and/or negative) in the valuation of investments classified as FVTOCI as well as the net profit for the year of €661 million. These increases in Equity were partially offset by a dividend distribution of €574 million from 2018 profits and interim payment of a portion of the regular dividend scheduled for 2019. The interim dividend of €200 million was distributed on 20 November 2019 (unit dividend of €0.154).
In March 2019, reporting directly to the Head of BancoPosta, the “Governance Outsourcing and Business Support” function was set up, within which the structure of Governance Outsourcing was organised in June 2019.
In 2019, Operating Committees were also set up on the functions assigned and those outsourced with BancoPosta Fondi SGR Group companies, which provides the Financial Management service for BancoPosta RFC and PostePay, which manages products for BancoPosta such as slips, car tax returns, RAVs, transfers, money orders, direct debit receipts, eurogiro, postamat, booklet cards and payment platform with the aim of strengthening the methods of monitoring and dialogue.
In compliance with the regulations for the sector, BancoPosta is responsible for coordination of the Group company, BancoPosta Fondi SGR.
* (CET 1 Capital includes the initial equity reserve and non-distributable profit reserves (Tier 1 capital), taking into account the transitional regime (Regulation 2017/2395 EU).
Gains (losses) on sale of financial assets or liabilities 339 379 (40) -10.6%
The interest margin amounted to €1,566 million, an improvement of 2.6% (+€39 million). This mainly reflects returns on investment linked to the volume of funds raised through postal current account deposits and repurchase agreements and collateralisation of derivatives, and the return earned on interest-bearing deposits at the MEF, which as a whole generated interest income of €1,640 million, up 5.4% on the €1,556 million of the previous year (+€84 million).
Interest expense, on the other hand, is attributable to current account transactions, repurchase agreements and collateralisation of derivative transactions and amounted to €74 million, up €45 million compared with the previous year (€29 million) as a result of increased transactions in repurchase agreements and interest paid to Postepay.
Net fee and commission income amounted to €3,459 million, down 7% (-€262 million) compared to 2018, mainly due to the increase in fee and commission expense, which amounted to €335 million (€140 million in 2018) and are related to the costs for the service contract signed with Postepay with effect from 1 October 2018. With regard to fee and commission income, while postal savings performance was substantially in line with the previous year, there were increases related to insurance, financing and asset management products, as well as payment services. On the other hand, revenue from collections and payments fell as a result of the decline in volumes of slips.
Net provisions for risks and charges totalled €16 million, down €56 million (78%) compared to the previous year. This change is related to the fact that, in 2018, specific provisions were made for the placement of real estate funds.
Income tax expense totalled €234 million, which generated profit for the year of €611 million, or 2% more than in the previous year (€597 million).
BancoPosta RFC’s workforce Average number in full-time equivalent terms 2019 2018
Financial assets measured at fair value through other comprehensive income 36,799 32,040 4,759 14.9%
Cash and cash equivalents amounted to €4,314 million (€3,328 million at 31 December 2018, +€986 million) and includes cash at Post Office counters and companies that provide cash transportation services, totalling €3,500 million, and cash deposited with the Bank of Italy to settle interbank transactions, totalling €814 million.
Financial assets measured at amortised cost amounted to €40,950 million (€33,743 million at 31 December 2018, +€7,207 million) and relate to investments in Italian government securities and those guaranteed by the Italian government, totalling €25,064 million (€22,872 million at 31 December 2018, +€2,192 million) and sundry receivables of €15,886 million (€10,871 million at 31 December 2018, +€5,015 million).
With reference to financial assets relating to investments in Italian government securities and Italian government guaranteed securities, the increase in the amount takes into account, also in this case, mainly the positive change in fair value relating to securities hedged with fair value hedge derivatives, as well as further transactions in securities during the year.
Financial assets represented by sundry receivables primarily include: (i) amounts deposited with the MEF of €7,558 million (€7,233 million at 31 December 2018); (ii) guarantee deposits of €5,660 million (€1,652 million at 31 December 2018, + €4,008 million); (iii) repurchase agreements of €1,158 million (€251 million at 31 December 2018, +€907 million); (iv) trade receivables of €844 million (€875 million at 31 December 2018); (v) receivables relating to the balance of amounts resulting from the processing of payments to and from third parties via Poste Italiane for €650 million (€843 million at 31 December 2018, -€193 million).
Hedging derivatives amounted to €73 million, down from €368 million at 31 December 2018.
Financial liabilities held for trading, amounting to €15 million, represent the fair value of the forward contract for the sale of Visa Incorporated ordinary shares entered into in 2019.
Other liabilities amounted to €2,953 million and, similarly to other assets, mainly include items of a tax nature by way of substitute tax, items in progress and payables to Poste Italiane for services regulated by executive regulations.
The provisions for employee termination benefits, in line with 2018, amounts to approximately €3 million and reflects the effects of the reorganisation and centralisation of operating activities in Poste Italiane during 2018.
BancoPosta’s control environment is evidenced by: � the Group Code of Ethics; � the Organisational Model pursuant to Legislative Decree 231/2001 and the related corporate procedures; � the organisational structure of BancoPosta, as reflected in organisational charts, service orders, organisational notices and procedures determining the roles and responsibilities of the various functions; � General Regulation governing the process of assignment and outsourcing of BancoPosta RFC, which respectively regulates the assignment of RFC operations to Poste Italiane functions in terms of decision-making processes, the minimum content of operating guidelines, levels of services, information flows and control procedures, and the process of outsourcing BancoPosta functions to third parties of the Poste Italiane organisation, identifying the related operational phases and the roles and responsibilities of the various bodies and functions involved in the process; � the guidelines in the Internal Control and Risk Management System (also SCIGR), describing the roles and duties of BancoPosta RFC’s control Functions, and the procedures for coordinating and ensuring the exchange of information between these Functions and Poste Italiane’s control Functions and the flow of information to corporate bodies; � the system used for delegating powers to function heads in accordance with their responsibilities.
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 and Internal Auditing. The risk assessment techniques, methods, controls and periodic audit findings are shared amongst the above control functions to promote synergies and take advantage of the specific expertise available. It is also planned that BancoPosta, also in the context of controls, will make use of the other functions of Poste Italiane, in line with the Regulation governing BancoPosta RFC’s contracting out and outsourcing process mentioned above.
In compliance with the regulatory requirements contained in the Supervisory Standards of the Bank of Italy and CONSOB to which BancoPosta is subject, in early 2020 BancoPosta’s Internal Auditing function prepared its 2019 Annual Report, the purpose of which is to provide information to the various corporate bodies on the completeness, adequacy, functionality and reliability of the overall system of controls, with specific regard to processes, procedures, information systems and mechanisms applied in the oversight of BancoPosta’s activities. The Report was prepared on the basis of the findings of the audit activities carried out by the function and set out in the Audit Plan for 2019. The report contains information on the outcomes of the audit of the services contracted out by BancoPosta to Poste Italiane Functions under operating guidelines and the activities outsourced to providers external to the Company.
Internal Auditing has also drawn up the Annual (2020) and Multi-year (2020-2022) Audit Plan, based on a risk assessment process designed to ensure adequate coverage of BancoPosta’s Business Process Model, including risks, changing aspects of the business, regulatory issues and BancoPosta RFC’s organisational structures. This Plan has been presented to the Board of Statutory Auditors and submitted for the attention of the Board of Directors.
With reference to BancoPosta RFC, following the positive development in revenue volumes and the change in the market scenario, the financial leverage ratio fell during the year to 3% at 31 December 2019, taking into account the increase in capital of part of the year’s profits.
The CET 1 ratio at December 2019 stood at 18.3% compared to 18.4% at the end of 2018, confirming its capital solidity and recording a decline mainly related to the fall in interest rates, which led to an increase in collateral paid to counterparties in hedging derivative transactions.
Regarding the interest rate risk on the banking book in 2019, in terms of economic value, BancoPosta RFC was exposed to falling rates. The entity of the exposure, measured using an internal model, remained below 10% of supervisory capital, thus well within the risk appetite framework for the year.
Lastly, with regard to operating risks, in 2019, Poste Italiane completed its initiatives to protect customers, which had a negative performance on the real estate funds subscribed in the period 2002-2005, and closely monitored disputes with customers relating to the return on certain series of BFP placed in the past, adjusting prudential provisions to risk provisions.
BancoPosta RFC events after 31 December 2019 Events after the end of the reporting period to which the 2019 Annual Report refers are described in other sections of this document. Further information is provided in Poste Italiane Financial Statements for the year ended 31 December 2019.
Outlook for BancoPosta RFC In 2020, BancoPosta RFC will continue to implement the strategic objectives described in the Poste Italiane’s Deliver 2022 Plan, in order to take advantage of the opportunities resulting from the recent regulatory changes brought about by MiFID II and IDD, by leveraging the customer base, the distribution network and the brand.
As regards the active financial instrument portfolio management strategy, the bond buying programme for the year 2020 is expected primarily in the early months of the year, in relation to forecasts with respect to new liquidity, as well as taking into account the concentration of portfolio maturities in the first part of 2020.
Intersegment transactions Intersegment transactions between BancoPosta and Poste Italiane functions outside the ring-fence are set out in Poste Italiane Financial Statements for the year ended 31 December 2019 (BancoPosta RFC’s Separate Report, Part A of the notes).
• Number of tenders conducted on the basis of social criteria +12%
Certify the main Group companies in accordance with ISO 37001 standard
By 2022 % of the Group's qualified suppliers subject to sustainability audits
Ethics and transparency constitute the highest values of Poste Italiane’s corporate identity. These fundamental principles guide the way in which the Company implements its business activities, which is, by its nature, is based on trust, as well as the management of relations with all its stakeholders. 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.
With a view to inclusion and in line with the transparent approach and increasing accountability, during 2019, the Company organised specific meetings between top management and colleagues in the relevant territorial areas up to the fourth levels of the organisation with the aim of developing open and continuous dialogue on the main corporate issues. The initiative, which involved a total of around 5,000 colleagues in the 6 stages in the cities of Milan, Venice, Bologna, Rome, Naples and Palermo, represented a moment of participation and cohesion that allowed Poste personnel to be equally involved in the path that the Company is taking, also in relation to the changes in governance and the sharing of the strengthening of control structures, and projects that affect all employees.
In 2019, in order to promote the principles and values set out in the company’s Code of Ethics, Poste Italiane organised a number of compliance-related training initiatives, focusing on specific regulatory issues such as safety in the workplace, regulatory compliance, the 231 organisational model, quality, anti-corruption etc., which involved the corporate population transversally.
With the aim of ensuring the consolidation of an integrated and widespread ethical business culture at all organisational levels and to testify, from an accountability point of view, Poste Italiane’s commitment to internal and external stakeholders, to implement the values and models of conduct that guide the company’s mission, the Company has created a series of publications dedicated to corporate Sustainability Policies. The content of the publications has been organised with the aim of highlighting: the general ethical principles, the company ’s values and policies, the duties of individuals and the ethical reflections in working practices, the rules and codes of conduct defined for the application of the values and compliance requirements and the control tools to monitor the effective implementation of the policies.
In the context of its internal control and risk management system, in November 2019, Poste Italiane updated the Guideline aimed at regulating the system for the reporting, by personnel and third parties, of acts or facts relating to breaches of internal and/or external regulations, as well as illegal or fraudulent conduct that may directly or indirectly cause economic, financial or image damage to the Company.
The main updates of the Guideline concern the composition of the Whistleblowing Committee, as the body responsible for receiving, examining and evaluating reports. In particular, the role of Chair will be assigned to an external professional with high standards of professionalism, honourableness and independence and the permanent presence within the Committee of the Group Risk Management structure/ Oversight 231, in order to ensure constant assessment of the relevance of the reports received. In addition, the head of CA/GRM/Oversight 231 informs the head of the Corruption Prevention Compliance Function about reports of potential corrupt events, with evidence of the related decisions taken by the Whistleblowing Committee.
Poste Italiane’s internal system for reporting violations is further strengthened by the provisions of the Organisational, Management and Control Model, also following its updating, with reference to the reporting of violations pursuant to Legislative Decree 231/2001. In particular, the new Model also provides that, in the management of reports received through the dedicated portal, the confidentiality of the identity of the reporter is guaranteed through the use of secure protocols.
Poste Italiane confirms ISO 37001 certification and extends it to Group Companies
As part of the process of Integrity and transparency, characterised by the achievement of ISO 37001 certification in 2018 by Poste Italiane SpA - the first Italian company in the finance and communications sector to obtain the Anti-Bribery and Corruption Certification - the company confirmed the certification also for 2019 (275 sites certified, 25 sites audited with a positive opinion on certification, 14,000 employees impacted). In addition, in line with the objectives set out in the ESG Strategic Plan, the certification was extended to the other Poste Vita and Postepay Group companies.
The Group invests in training and information activities for its staff to guarantee dissemination of a culture of Integrity and transparency throughout the value chain. In order to ensure that its employees are aware of anti-corruption issues, Poste Italiane provides ongoing compulsory e-learning and classroom training programme for all staff on anti-corruption principles and, in particular, on reporting mechanisms and any significant changes to anti-corruption legislation and/or the adopted regulatory system. In addition, the Group’s general and specific anti-corruption principles are communicated to stakeholders also through dissemination of the Code of Ethics. In line with its Human Rights Policy, Poste Italiane’s objective is to increase its training offering on integrity by providing in-house workshops to the entire workforce on specific issues.
Poste Italiane guarantees equal opportunities to all suppliers, and the opportunity to compete in contract awarding procedures. Suppliers involved are required to comply with the EU and Italian legislation on competition, refraining from anti-competitive or unethical conduct that is contrary to the rules that safeguard competition. The Poste Italiane Group requires its suppliers - including any subcontractors, and their partners - to formally accept the guiding ethical and social principles and obligations regarding conduct set out in the Code of Ethics, the Poste Italiane Group’s Integrated Policy and the Human Rights Protection Policy, which, as of January 2019, became an integral part of the contractual relationship.
The procedures, together with the Internal Regulations for the Award of Works, Service and Supply Contract Procedures (approved in November 2017 and modified in July 2019) and the Public Contracts Code, if applicable, constitute the main governance and regulatory oversight of Poste Italiane’s contract awards.
In 2019, the process of centralising Group companies’ procurement activities within a corporate function continued in order to make them subject to the same procedures/ verifications as those already provided for procurement by the Parent Company. In addition, the centralisation of procurement activities carried out in the territory was completed, which made it possible to overcome the 9 territorial divisions and consolidate the central structure of purchasing requirements by product area.
In recent years, the Parent Company’s procurement has been marked by constant, large-scale use of competitive procedures that guarantee competitive advantages for the Company and ensure impartiality, transparency and equal collaboration opportunities for suppliers. Contract awarding procedures are also managed via the Procurement Portal (Poste-Procurement), the internet platform used for all procurement activities as well as for management of the Supplier Register. This IT system was set up to ensure efficient and integrated management of the entire procurement process, as well as to encourage and improve collaboration with suppliers, whilst meeting the requirements of confidentiality, authenticity, competitiveness, integrity and data sharing availability.
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.
Training and management regarding the Register is governed by the Supplier Register Regulations which regulate the Supplier Register Qualification System, as well as by the Qualification System Regulations which regulate the system and the qualification procedure for each specific product category. For each product category, the Supplier Register may be accessed at any time by submitting a request accompanied by the necessary documentation.
All suppliers seeking qualification for the Supplier Register are required to meet general requirements (moral and professional suitability), as well as specific business, financial, technical and organisational requirements. The definition of more stringent requirements represents a strengthening element of the governance of the procurement process. In addition, in its relations with suppliers of works, services and supplies, Poste Italiane operates on the basis of standard contractual clauses that are constantly updated in consideration of new regulatory provisions and special needs expressed by internal customers. The adoption of uniform contractual standards thereby provides a timely means of speeding up the process, keeping contracting timeframes to a minimum and, above all, ensuring adequate governance of the most significant matters. Finally, among the policies described in the Internal Regulation for the Award of Works, Service and Supply Contract Procedures, pursuant to Law no. 190/2012 as amended and supplemented entitled “Provisions regarding the prevention and repression of corruption and illegality in the Public Administration”, Poste Italiane periodically publishes on a completely voluntary basis, on the portal “Open and Transparent Contracts”, which is freely accessible by all citizens on its institutional website, information relating to both the assignment procedures identified by the reference legislation and according to the methods established therein, and in relation to exempt purchase procedures. Poste Italiane is the only company in Italy to provide such a high level of disclosure on its procurement process.
In 2019, with reference to the IT Services product category, a new Vendor Rating (VR) system with low operational impact was established, through the re-engineering of the processes for the detection and re-use of available information flows. The Vendor Rating Index (VRI) is a tool Poste Italiane has adopted for overall assessment of suppliers with regard to aspects relating to the levels of quality provided by the Company in the supply of goods and/or services. The VRI assessment is carried out at six-month intervals, with the overall results expressed on a scale from 0 to 100, and corresponding qualitative assessment brackets suppliers. The VR system is based on a structured methodology with three areas of interest: administrative, commercial and technical, for each of which the corresponding quality is assessed. The assessment is carried out by individual supply and by supplier. With the establishment of the new system, the Group has also defined and introduced specific KPIs for the centralised management of Supply Quality data on operational monitoring systems.
Number of percentage of tender conducted on the basis of environmental criteria + 15 percentage points compared to 2018.
Number of tenders carried out on the basis of social criteria + 12 percentage points compared to 2018
Total number of existing tenders Number of tenders conducted on the basis of social criteria
Poste Italiane has implemented an action plan to reduce the use of disposable plastic in the canteen of its headquarters in Rome. Since November 2019, several changes have been introduced in the daily routine aimed at eliminating some disposable plastic elements (eco-compostable teaspoons, reusable/washable polycarbonate glasses, regularly sanitised metal cutlery ) with the aim of incisively reducing plastic consumption and the resulting environmental impacts.
As evidence of Poste Italiane’s commitment to occupational health and safety, the Group has established and provided for possible termination of supply contracts for all product categories in the event of a breach of one or more aspects of the relevant safety documentation.
Clothing As regards clothing, in defining the assignment procedures utmost attention is paid to the green requirements of the equipment to be provided to delivery staff.
For footwear and Personal Protective Equipment, it is required that the products comply with the minimum environmental reference criteria, in accordance with the Ministerial Decrees.
• Centrality of people and of their needs • 98% of the company population involved in training activities • Culture of safety in the Company • 100% of employees covered by Collective bargaining agreements
By 2022 Hours of training provided 20 million > 5 million hours
Increase the quota of middle managers and white-collar 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)
By 2022 % of middle managers and % of employees involved in development plans 20% of middle managers and 25% of employees 22% employees (POP)
Increase the number of parental participation in soft skills enhancement programs developed on the occasion of care activities
The Group promotes the development of innovative professional skills in line with evolving market trends and the various business needs
In this regard, more than 5 million training hours were provided in 2019, of which 1.4 million dedicated to resources operating in the financial sector.
With regard to managerial training, the Poste Talks initiative was implemented in 2019. The initiative, which took place during seven workshops attended by top management and management, covered topics and projects of particular strategic importance for the Poste Italiane Group, with the aim of encouraging the sharing of knowledge and the analysis of organisational complexities and interdependencies connected with the achievement of corporate objectives.
In particular, in line with digital innovations, a new digital tool has been introduced from the second half of 2019 that allows the online filling in of perceived quality questionnaires and the management of surveys, Q&A sessions and live surveys of any training event.
In addition, in the last few months of 2019, an experimental study was launched to correlate training with the company ’s business performance indicators, with the aim of defining an additional level of evaluation of the effectiveness of training in accordance with the ROI Evaluation Process Model.
From the point of view of monitoring training actions and reporting to the compulsory training control functions, periodic monitoring activities are carried out and periodic information flows to company departments and internal and external controls are implemented in relation to the progress of the various regulatory areas covered by the training plans.
During 2019, the Development System was consolidated on the following 3 macro clusters that integrate an articulated set of processes, tools and methodologies: 1. Scouting: aimed at identifying potential and the most qualified staff.
2. Management planning: aimed at identifying development priorities with a view to succession and the reduction of managerial risk.
3. Development: aimed at supporting the individual growth of staff members and accelerating their professional development.
In particular, the following objectives were pursued during 2019: � improvement of engagement and motivation, through participation activities in a bottom-up logic; � people enhancement and promotion of professional development to create a pipeline of talents at various levels of seniority, through the knowledge of their experiences, skills, aptitudes, potential and motivation; � promotion of the evolution of the company culture and managerial aptitudes in parallel with the market and organisational transformation.
With reference to improving engagement and motivation according to a logic of bottom-up involvement, during 2019, the projects “Paths for innovation” and “Unleash your talent” were activated in particular.
“Libera il tuo talento” (Unleash your talent) is an initiative designed to allow all the staff of the Company to propose ideas on topics relevant to the business. The project is part of the wider framework of corporate initiatives aimed at promoting active participation and a culture of innovation. Poste Italiane brings talent into play, promoting the development of potential and a cooperative working climate, encouraging the development of innovative solutions through comparison and teamwork. The first focus of the initiative involved 600 employees who, through the sharing of experiences, skills, curiosity, inventiveness and vision, were called upon to discuss the issue of environmental sustainability in order to propose an original approach.
Consistent with previous years, the Management Review and Succession planning processes were implemented in 2019, respectively for the mapping of the management population and the identification of successors.
Specific initiatives have been implemented to support the evolution of the corporate culture and managerial attitudes in parallel with the market and organisational transformation. Among these, specific mentoring paths have been activated, aimed at promoting the exchange of mentorship relationships between managers and professionals belonging to various functions and geographical areas according to an accompanying process in which the Mentor supports the Mentee in the pursuit of professional goals, contributing to the dissemination of managerial best practices.
Individual Business Coaching is an additional tool to support managerial growth, complementary to Mentoring paths. An e-coaching programme was launched in an experimental way in 2019 using a digital platform that has made it possible to reach people widespread throughout the country.
Lastly, ContamINazione in Business Market and Public Administration was also launched, an awareness-raising project aimed at disseminating the knowledge acquired by employees in the course of their professional experience on current company issues. The aim of the initiative is to structure a circular and widespread exchange method, in which everyone can make their contribution by communicating and sharing experiences and activities. The initiative provides for periodic meetings open to colleagues who share their knowledge on topics of interest, proposed by an Editorial Committee, regarding the commercial field, knowledge of company and market processes and managerial skills.
The wellbeing of people has always been considered by Poste Italiane a key factor to safeguard and consolidate. In particular, the Company is engaged in interventions aimed at improving the condition of employees and their families with increasing attention to aspects related to work-life balance, motivation and issues of high social relevance.
Through an intergenerational vision, the Group’s welfare strategy aims to guarantee the central importance of people and their needs, engagement with local communities and social organisations, paying attention to families and social inclusion
By promoting the commitment to health and safety at work, support for active parenting, attention to the training of people and safeguarding their wellbeing, Poste Italiane has activated a value chain for the development of a business and inclusive culture capable of responding to the challenges and opportunities of the market and involving and listening to the local realities.
Poste Italiane’s commitment to ensuring a state of wellbeing in the working life of its employees on a daily basis has been positively perceived not only by the latter, but also externally; in fact, there are many awards at international level.
Work-life balance With the aim of reconciling the working and private lives of employees, Poste Italiane proposes various initiatives in the social field. A Company crèche service is provided at the Rome and Bologna offices, and, via an inter-company agreement, in Milan. Poste Italiane has provided for a contribution based on the type of working hours chosen and/or families’ income status, thereby offering reduced rates to access the service. The company crèche provides a flexible educational service in relation to work pace and able to combine professionalism and quality in respect of the values expressed by families. The educational project is characterised by attention to the values of eco-sustainability and interculturalism and by the educational alliance with families to promote a structured dialogue, also through innovative communication methods (e.g. seminars to support parenting).
The Company provides teleworking service. This is aimed at people with objective care needs for themselves (e.g. pre- and post-natal periods; resumption of service after a long illness, injury or leave, disabled people) or their families (e.g. employees who need to care for elderly parents or children who are ill).
In 2019, the initiative “Camera con vista” (Room with a view) was launched, promoted by the Company and open to Poste Italiane employees who meet precise requirements, specifically, permanent contract and income from Single Certification not exceeding €25 thousand. The initiative provides for the allocation of accommodation in places of purely Italian tourist interest for free stays of one week at different times of the year. An important opportunity that stems from the recovery of service accommodation owned by the Company, redeveloped and used as holiday homes. Employees interested can apply through the dedicated functionality of the new NoidiPoste app that allows access to an online booking platform. Accommodations are assigned to the first candidates in order of reservation according to availability.
With the aim of promoting sport and fostering social relations within the Company, various initiatives have been promoted over the years in the sports sector. The great success achieved has led Poste to propose or introduce new activities with the aim of involving an increasing number of employees and strengthening the links between the Poste Group and the latter.
Since 2018, the Company has been providing its employees with a form of supplementary health care that can also be extended to their families. The Fund provides for two types of health coverage: the Basic package, with charges borne entirely by the Company, and the Plus package, which extends the Basic guarantees through an additional minimum contribution to be paid by the employee. For the healthcare services provided through the programme, it is possible to take advantage of a network of affiliated healthcare facilities and trusted doctors and structures. With the aim of ensuring complete healthcare coverage in the area, in line with the characteristics and needs of the company’s population, since 2018, the Fund has more than doubled its network of healthcare facilities and affiliated specialist doctors from around 23,000 to around 53,000. To date, more than 100 thousand employees have joined and as of 1 January 2020, all eligible employees will automatically join the Basic package, with contributions to be paid entirely by the Company.
The Company contributes to the financing of the FASI Healthcare Fund and other supplementary funds, so that services supplementary to the National Health Service may be recognised.
Culture and education The welfare plan has contributed to the enhancement of the intergenerational vision through the development of school and career guidance actions dedicated to employees’ children. In the field of culture and education, Poste Italiane, in collaboration with Intercultura, has provided numerous scholarships to the most performing children of Poste Italiane’s employees attending secondary school. The aim of the initiative is to promote the importance of international education and multiculturalism through educational experiences abroad in Europe and around the world. In order to involve the graduate and undergraduate children of employees, Poste Italiane has also planned Talent Days, orientation meetings with young people to help them approach future professions in a more conscious and targeted manner with respect to their personal inclinations and market prospects.
Over time, the Group has adopted internal regulations and policies for the main welfare initiatives, such as “Guidelines for the granting of subsidies to employees” and “Teleworking - Guidelines on social inclusion”. Moreover, in 2019, following the results of the risk assessment and gap analysis activities, the two reference 231 procedures in the welfare area were updated, with particular attention to the strengthening of measures for the protection and safeguard of minors.
Due to the consequent social impact of the main welfare initiatives, feedback is systematically provided to employees’ comments and reports on the company Intranet, as well as ad hoc satisfaction questionnaires on some of the main projects carried out in order to encourage monitoring actions and the planning of improvement actions.
In order to verify the level of adequacy of the company’s welfare plans and to intercept the emergence of new needs, the company takes part in inter-company networks and thematic working tables for the development of benchmarks and the exchange of good practices (e.g. also through collaboration with sector associations to which it adheres, such as Valore D, Fondazione ASPHI) and makes use of questionnaires and surveys, both internal and external, to detect employee satisfaction. In the planning and development phase of the welfare plan, Poste Italiane also promotes an increasingly intergenerational approach, associated, where possible, with targeted analyses relating to gender, age, professional characteristics and the family status of the people involved in the initiatives.
During 2019, various opportunities for dialogue with the labour unions enabled the signing of several agreements, the most significant of which are described below.
In addition, in line with the project to transform the Chief Operating Office function, the Parties signed two agreements on 26 September and 10 October 2019, which outline the aspects relating to the micro-organisational model of the Function and the operating procedures connected with work performance. In particular, the guidelines relating to the working hours of the territorial centres were shared at national level, which were subsequently laid down in specific territorial agreements.
� Ente Bilaterale per la Formazione e Riqualificazione Professionale (the Bilateral Agency for Staff Training and Retraining), through which the Parties jointly promote activities in the field of training and retraining, with regard to the provisions of the Consolidated Law on Occupational Health and Safety, and also with reference to any processes of reorganisation/restructuring /transformation of the Company, or the introduction of technological innovations.
� Organismi Paritetici per la Salute e la Sicurezza sui Luoghi di Lavoro (The 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.
Therefore, in accordance with corporate values, the Group is committed to: � ensuring continuous awareness and involvement regarding OHS by everyone working within the Group, especially the dissemination and strengthening of the safety culture at local operating centres (distribution centres and Post Offices) and the relative coordination structures; � reduce injuries, particularly in the logistics and delivery sector; � ensure the continuous improvement of Management Systems through the planning and implementation of initiatives in line with Group Policies, the constant monitoring of occupational health and safety performance and the periodic review for the definition of new objectives.
As regards health and safety, Poste Italiane aims to consolidate a safety culture in the Company, reduce injuries and promote continuous improvement of the management systems adopted
The ongoing monitoring and control of injuries favoured, also in 2019, the implementation of various initiatives on prevention and safety of the workforce and the workplace, specific field of professional activities. The following activities were carried out as a matter of priority in order to achieve the objectives set: continuous training, awareness-raising and staff involvement on OHS issues, plant and structural improvement of sites, continuous improvement and certification of Management Systems, constant risk assessment in relation to processes and workplaces, monitoring of the implementation process of the Improvement Plans for risk assessment and constant controls of compliance with the requirements of current legislation.
Further preventive activity relating to health and safety risks is the expansion of the company’s fleet with safer vehicles, such as three- and four-wheeled ones, used in delivery activities, and related training sessions on safe driving. Specific communication activities were also carried out to raise employees’ awareness of health and safety in the logistics sector, such as the “Basta Infortuni” (Stop Injuries) communication campaign and the “Noi per la Sicurezza” (Us for Safety) editions aimed at involving the directors of delivery centres in occupational health and safety.
Given the company’s focus on health and safety issues, which are particularly sensitive for the logistics and delivery sector, specific activities have been planned to consolidate the wealth of knowledge and skills regarding the matter and to raise awareness of the role it plays, including: � Consolidation of Lean Manufacturing principles in plants, based on a methodological approach that aims to minimise waste until it is eliminated. This objective is achieved through the introduction of new systems for automated load handling (AGV - Automated guided vehicles), the introduction of new types of sorting systems (TOP2K, XMS, Solysort, Easy Sorter) and equipment and the real estate review of the departments (microlayout). Interventions that allow a reduction in injuries and an improvement in terms of health and safety of the workforce. � Constant assessment and updating of Risk Assessment Documents (DVR), following the reorganisation underway, primarily in the delivery sector.
� Realisation of the training project aimed at about 1,600 resources for the prevention of injuries caused by dog attacks against letter carriers.
The Group takes all the necessary measures to reduce injuries, workplace injuries and occupational illnesses, promoting the psychophysical wellbeing of people through policies, prevention programmes, information and awareness campaigns. For these purposes, organisational responsibilities have been identified and specific policies have been adopted to ensure adequate supervision of all occupational health and safety aspects.
Poste Italiane has defined a multi-year plan for the adoption of health and safety certifications throughout the company. As at 2019, the Group Companies certified were: EGI, Poste Vita, PosteAssicura, SDA; Postel, Poste Air Cargo (formerly Mistral Air), PostePay and BancoPosta Fondi.
The adoption of a certified management system, 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, guarantees alignment between innovations and changes in work processes in terms of occupational health and safety objectives.
All Group Companies that have adopted management systems provide for periodic assessment and auditing, in order to ensure compliance with the requirements of the reference standards, and that they are correctly implemented and kept active. In addition to these systems for monitoring and reporting any anomalies, operational checks are carried out at delivery centres and Post Offices, aimed at assessing overall status in terms of infrastructure safety, plant engineering and work processes, as well as raising awareness among staff working at sites; and control measures are also aimed at analysing and assessing the occupational health and safety compliance status of the sites, with particular reference to aspects regarding plant and infrastructure.
Diversity and inclusion • Commitment to support equal opportunities • Subscription of the Women’s
• 46% of female incidence among middle and senior women managers in 2019
Adopt a specific strategy to ensure the strengthening of female representation in the coverage of middle management positions 2022 % of women in middle management positions
Aim for a greater exchange between the different generations through training and change management interventions that encourage knowledge of the related issues and the concrete implementation of the company policies on the subject 2022 % of the company workforce 60% New
Carry out training interventions that aim to foster relationships and collaboration between colleagues from different cultures and nationalities, and which support the development of cultural sensitivity also in the management of customers and partners 2022 % of the company workforce 60% New
Define listening and communication campaigns to develop corporate awareness and culture on the issues of Diversity and inclusion 2021 no. of integrated communication campaigns (internal/external) no. of surveys carried out on the intranet 3 New
Poste Italiane plays a role of primary importance for the country, involving in its activities a multiplicity of individuals, entities, institutions and businesses. For this reason, in addition to complying with international principles and guidelines, the Group is committed to assuming increasing responsibility for the protection of human rights, both in the interest of the people who work with the Company and those in the community in which it operates.
Poste Italiane has subscribed to the Women’s Empowerment Principles, the initiative promoted by UN Women and the Global Compact in support of gender equality worldwide as further confirmation of its commitment to supporting the achievement of the Sustainable Development Goals
Poste Italiane has adopted, in particular, a “Group Policy for the Protection of Human Rights” which reinforces as already stated in the Code of Ethics. The document commits 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 also 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.
Poste Italiane, in line with as already stated in the Group’s Code of Ethics and the Group policy for the protection of human rights, has adopted a specific Diversity and inclusion Policy. The objective is to have a clear approach in terms of mission, strategy and active practices in order to stimulate a collaborative, supportive working environment, open to contributions from all employees in order to increase the trust of people, customers and, in general, civil society, as well as to promote diversity in all its aspects in order to fully exploit the opportunities arising and generate value within the workplace while also obtaining a competitive advantage over business.
Diversity is a value that must be protected and encouraged with concrete and pervasive actions in all organisational and management processes, based on the principles of respect for the value of people, the enhancement of the uniqueness of the individual and access to the same opportunities for professional growth.
In particular, the Policy defines the 4 aspects of diversity for Poste Italiane: NFS
Diversity and inclusion programmes will be monitored through indicators developed annually in accordance with the evolutionary guidelines of the corporate sustainability plan. To this end, a cross-functional task force made up of representatives of all the company departments involved will be set up to appreciate scenarios, objectives and evaluation metrics to be made visible and transparent in public company documents, both within and outside the organisational context, through the main internal and external communication channels.
The Policy is communicated to all employees, including through targeted and specific training sessions depending on the areas of operations, roles and responsibilities, and will be assessed for the purposes of updating at least annually in light of the evidence emerging from assessments and monitoring of national and international trends.
Poste Italiane strengthens its commitment for the protection of human rights
Moreover, 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.
In addition to receiving indemnified leave for women victims of gender-based violence - a path of protection established by art. 24 of Legislative Decree 80 of 15 June 2015 - provided for in the collective labour contract, Poste Italiane has initiated specific activities aimed at understanding and spreading knowledge among its employees on this issue. 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.
In addition, as evidence of the commitment of Poste Italiane for women victims of violence, there is ample philatelic production that aims to raise awareness on the issue of gender violence. On the occasion of the last International Day for the Elimination of Violence against Women, on 25 November, four new cancellations (in Verona, Alessandria, Palermo and Catania) celebrated from north to south the anniversary of the UN.
As evidence of the primary importance the Group attributes to the issue of diversity, 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 - 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 2019 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.
The Group intends to promote the dissemination of an inclusive business culture aimed at ensuring respect for equal opportunities, considering the value of each person regardless of gender, reducing situations of individual fragility and enhancing diversity of thought, considered a fundamental resource for the development and growth of the Company.
In its Code of Ethics, the Group pays great attention to the fair management and growth of the intellectual potential of its human resources, in line with the criteria of merit and performance achieved, ensuring equal treatment and condemning any form of discrimination. In this regard, people are selected on the basis of their professionalism and skills with respect to the Company’s needs, regardless of their personal characteristics - age, gender, sexual orientation, disability, ethnic origin, nationality, political opinions and religious beliefs - in accordance with the principle of impartiality.
The development and enhancement of people’s distinctive skills, in all their forms and expressions and at different levels across the organisation account for the key strategic engine supporting the growth of the Group’s business.
The enhancement of diversity is an enabling factor for the involvement and engagement of people to achieve corporate objectives. In addition, increasing awareness in the management of diversity creates a competitive advantage for the Company and shared social value.
of middle and senior women managers in 2019 of the Parent Company’s BoD
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, as well as managers whose staff members are involved in the initiative.
Voluntary registration is envisaged for the MAAM digital programme and the MAAM manager platform, which provides for direct communication between managers and staff on maternity leave, in order to facilitate an effective return to work. More than 500 mothers and fathers participated in the programme in 2019. The initiative is supported by an online community that allows mothers and fathers to discuss parenting and the MAAM path in a protected and stimulating environment by integrating the various experiences through a relational system of over 5,500 participants from various companies, facilitating the process of learning, training and skills development. Finally, in order to enhance consolidated skills, useful for an effective return to or activity at work, the Multiply programme allows a voluntary exchange between the manager and the employee for the enhancement of skills. MAAM is therefore designed to help share a cultural model at all levels which is geared towards the inclusion of women in the workplace, and encouraging active parenting for both parents.
Poste Italiane reserves pink parking to facilitate access to the workplace for expectant mothers
Developing women’s leadership In collaboration with the Association Valore D, 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 2019, the Company launched - on an experimental basis - the Inspirin-Girls programme, promoted by Valore D, through which company role models share their experiences to middle school boys and girls. The aim is to act on a cultural and social innovation level in favour of the younger generations to promote reference models free from gender stereotypes in imagining their own future and to build a concrete bridge between schools and the business world.
The attention posed to age management Poste Italiane continued to participate in “Innov’age in the Postal Sector”, a project financed by the European Community in which the Group participates together with other postal operators. The project aims to contribute to a better understanding of age management in the postal sector at European level. In addition, the project aims to develop a training programme to support leaders in the management of heterogeneous teams in generational terms and to provide the tools for the enhancement of diversity that increasingly characterises the operational realities of companies. With reference to the latter objective, in 2019, Poste Italiane participated in the testing phase of the training prototype developed, which will be realised in all the countries that are part of the project.
A letter for the commitment of a lifetime in the Company
More than fifty thousand colleagues with 25 to 45 years of company seniority have been sent a letter of thanks signed by the CEO for the work done and the commitment to the Company.
A symbolic gesture but strongly indicative of the attention paid by Poste Italiane to the commitment of its colleagues in so many years of work within such a large company with such an important history also for the life of the country.
Supporting vulnerability The “PosteHelp” Project is aimed at offering a network of services and support interventions in favour of colleagues suffering from serious pathologies which is articulated in: corporate volunteering to support basic needs, coaching sessions by in-house professionals, and guidance and support activities to identify more accredited treatment centres for specific diseases nationwide. The testing phase of the project launched in the pilot regions of Lombardy, Lazio, Campania and Sicily was completed in 2019. This first phase has made it possible to outline a revision of the project structure to be extended at national level, which will also be supported by targeted caring organisation interventions, in order to have a more pervasive impact in terms of cultural awareness, listening and helping relationships in support of vulnerability.
Caring Solution is the listening initiative promoted in 2019 by the Group designed for staff returning to work after a period of absence and in support of any fragility that may have emerged, aimed at improving the working environment and strengthening the sense of belonging. The project aims to understand with personalised logic, situations of difficulties, by diagnosing the problem, carrying out interviews and defining ad hoc intervention plans on specific cases.
Number of regions involved in the testing phase of the Poste Help project in support of vulnerability
Increase the Group's support for sociocultural initiatives that benefit the community
By 2019 % of investments in the community to promote sociocultural initiatives
Provide basic services, including in Small Municipalities without a Post Office
Increase the number of Post Offices in Small Municipalities with free Wi-Fi customers
By 2022 % of ISO 22222 certified financial advisors 100% Time program started
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. The Company’s inclusive approach is reflected in constant listening activities and dialogue with citizens, authorities and third sector associations, at local and national level, in a continuous process of reconciling relative and legitimate interests.
This approach, which is reflected in the creation of shared value for the Company and its stakeholders, represents an opportunity for Poste Italiane to combine competitiveness with the creation of long-term social value.
Poste Italiane has also adopted a specific Guideline that governs corporate processes relating to sponsorship and donation initiatives. The Guideline governs the corporate processes relating to the means of implementing sponsorship activities and donations to partners, bodies, associations and local authorities operating in local areas. Such contributions, as also specified in the Integrated Policy of the Group, may not be used to conceal acts of corruption. Indeed, before making contributions, the Company conducts a due diligence process based on the relevance of the initiatives, the reputation of the potential partner, their alignment with corporate objectives and their expected benefits. After making contributions, the Company constantly assesses the compliance of supported initiatives with contractual provisions and the due performance of activities, and also carries out specific checks on the proper fulfilment of contractual obligations. The Sponsorship and Donations Committee, chaired by an external professional with high standards of professionalism, integrity and independence, will be involved in the evaluation of sponsorship requests and donations.
The significant increase in the initiatives implemented compared to 2018 was made possible by the increase in investments made by the Company during the year. In line with the inclusive approach adopted by the Company, the interventions carried out in 2019 were characterised by a strongly informative and inclusive approach with a view to promoting accessibility by all beneficiaries, as evidenced, for example, by the increase in free activities provided by the Company in the territory and the numerous initiatives promoted in the most remote areas.
With a view to transparency and increasing accountability also towards its employees, in May 2019, the Company created a special section on the company Intranet dedicated to the initiatives promoted.
The commitment of Poste Italiane in favour of the communities of Small Municipalities In order to have a positive impact on the social fabric, favour the economic growth of the country and, at the same time, strengthen the strategic presence of the Company in the territory, at the end of 2018, the Group, as part of the “10 Commitments in favour of the communities in Small Municipalities” programme, established, in collaboration with the main institutions and local administrators, specific interventions in favour of local realities with less than 5,000 inhabitants.
In addition to keeping its promise not to close any Post Office, Poste Italiane held more than 900 meetings with local administrators, coordinated by the new office set up in Rome with the task of keeping the dialogue between Poste Italiane and the communities in the area open and constant; 759 ATM Postamat were installed; home services were activated, as well as those at affiliated realities in Municipalities without a Post Office; 5,692 WI-FI spots connected in Post Offices; 710 architectural barriers removed in 681 Municipalities; 219 Post Offices upgraded in 211 tourist centres; 6,211 new post boxes and 4,011 video surveillance systems installed; more than 100 treasury services activated; 13 buildings donated to Municipalities for activities of collective interest and 22 murals created to improve the urban décor of suburban Post Offices. In addition, during 2019, in about 4,000 Small Municipalities, Poste Italiane launched the “Etichetta la Casetta” project, which aims to make citizens aware of the need to affix labels with their name and surname on houses and on the condominium intercom. This initiative is part of a wider project to improve the quality of delivery, which also includes interventions on toponymy through the involvement of Municipalities, mayors and citizens.
As confirmation of the principles of Integrity and transparency, during the year, Poste Italiane reported on a bi-weekly basis on the progress of its initiatives, in a specific section of its website, thus ensuring constant dialogue with its stakeholders.
ATM Postamat in Morterone, the smallest Municipality in Italy where 30 people live community support initiatives compared
Free payment and POS services for Municipalities In order to meet the needs of Local Administrations, deriving also from the evolution of payment instruments, Poste Italiane intends to provide Municipalities with at least two POS on loan for free use with free acceptance fees for all Poste Italiane cards.
Punto Poste Da Te for Small Municipalities In all Municipalities without a Post Office or with only one office open every other day, Poste undertakes, at the request of the Municipality, to install Punto Poste Da Te in the premises available, in a space accessible to employees and the public. The Punto Poste Da Te locker allows the collection and shipment of parcels, the sending of e-commerce returns, the payment of postal bills, Postepay top-ups, SIM top-ups and, in the future, the collection of signature mail.
Information services for citizens The Company is committed to providing local government with a multi-channel communication service with its community. The service offers the Municipality the opportunity to manage in complete autonomy, via SMS and/or e-mail, or through traditional mail, communications of public interest to citizens, such as warnings about closed roads, extraordinary events or tourist or cultural events.
Philately programmes Poste Italiane provides for the realization of events to enhance the territory during which local communities are presented the themes of philately and writing related to traditions and cultural heritage. This will involve 20 of the smallest Municipalities of each Region, up to a total of 400 Municipalities in 2020. At the end of each event, there will be a dedicated philatelic cancellation.
The Company has also pledged to offer its support on the occasion of the celebrations for the seven hundredth anniversary of the death of Dante Alighieri, becoming the first major national reality to engage in this initiative. The commitment is substantiated through the implementation of initiatives in 70 Small Municipalities, which in different ways are linked to the artistic events and the life of Alighieri, among those who have requested support to implement specific initiatives, have works, are mentioned in the events of the Divine Comedy, or are linked to the adventurous life of the poet.
“Valori ritrovati” (Rediscovered values): a project of circular economy On the basis of the Memorandum of Understanding signed with Caritas Italiana in 2018 and renewed in September 2019 for a further 5 years term, the “Valori ritrovati” initiative continues, which aims to allocate the contents of parcels not collected, or not delivered - “anonymous” or “abandoned” parcels - to the neediest families through the distribution channels of the “Solidarity Supermarkets”, the supermarket chain that provides free basic necessities to needy families. Taking advantage of the re-use of goods, with a view to circular economy, “Valori Ritrovati” is an example of a concrete and effective solution that preserves value rather than destroying it. The collaboration with one of the main charities strengthens the Company’s presence as a promotor of local development via social inclusion and solidarity initiatives. In addition to the social value, the project has a strong inclusive footprint as it enables needy families to receive goods (for example, clothing, toys, small electrical household appliances, household utensils) that they would not normally have been able to buy. In support of the initiative, in 2019, the network of Poste Italiane volunteers participated in the implementation of distribution, storage and administrative activities relating to management of the parcels. The initiative is currently operating in the Caritas offices in Rome, Perugia, Pescara and Montesilvano with the aim of extending to additional Solidarity Supermarkets. In addition, the proceeds from the sale of goods not suitable or necessary for the support of the beneficiaries of the Solidarity Supermarkets, has already allowed the activation of three paths of professional integration in Rome.
Il Volontariato d’Impresa (Corporate volunteering) As part of the “Volontariato d’impresa” (Corporate volunteering ) project, Poste Italiane has designed the model of how volunteering works in the Company, with regard to the accreditation phase of the organisations proposing voluntary activities, the presentation and validation of projects, the recruitment and engagement of volunteers and communication both internally and externally. The project, launched in 2016, today has more than 1,000 employees and represents for Poste Italiane a strategic activity useful to create networks of solidarity and inclusion in the territory and a system of structured dialogue with Third Sector Organisations and representatives of local communities. For Poste Italiane, the strengthening and development of the community of volunteers is a priority, an activity carried out through the provision of dedicated training activities.
In order to optimise the management methods of volunteer programmes and promote local initiatives for the design of shared services of social value, during 2019, the “Piattaforma Informatica Volontariato d’Impresa” (Corporate Volunteer Information Technology Platform) project was launched, aimed at the development, implementation and operational management of a dedicated web platform. In particular, the platform is designed to allow Third Sector players to propose specific initiatives, volunteers to apply and publish content with a view to sharing, as well as facilitate the production of project reports.
From the collaboration between Poste Italiane and Sky Arte, 8 films were created to share the story of the P.A.I.N.T. project: the Street Artists, the Post Offices, the common people and the construction techniques that gave life to the murals.
Poste Italiane awarded for initiatives to support the digital development of Small
Social engagement Poste Italiane is sensitive to social initiatives and the need of its employees to take an active part in social change. According to the principle of social engagement, the Company has joined the 2019 National Food Collection Day organised by the Banco Alimentare Onlus (not-for-profit Food Bank), which enables people to donate part of their shopping expenditure to those in need. Poste Italiane has made about 160 Company vehicles available for the transport of donated food items. Employees participated both as drivers and exclusively as volunteers at supermarkets.
With this in mind, during 2019, dialogue activities with the main central institutions were carried out through continuous and transparent involvement and a propositive and proactive approach while representing the interests of the Company and the community.
The legislative activity involves the monitoring of regulatory scenarios and the position of the institutional stakeholders of reference, the preparation, together with the relevant departments, of position papers and proposals on relevant issues from the point of view of discussion regarding the Company’s needs with those of the stakeholders of reference and their interests.
The natural synergy between the Group’s mission and the authorities makes it possible to establish strategic agreements and partnerships in the interests of the community, which allow for implementation of investment and initiatives typically aimed at identifying bids relating to innovative integrated services, promotion of the postal network’s nationwide presence that facilitates prompt sharing of planning schemes, and preparation of local teams focused on specific issues32.
Among the main local institutions and regulatory and supervisory bodies with which the Company interacts there are: the Italian Communications Authority (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.
Over 1,500 Meetings with local institutions in 2019 as part of the Small Municipalities project
In this regard, the Group’s objective is to influence the socio-economic support of communities and provide a more informed purchasing experience, while at the same time promoting the creation of economic value for the Company and the restoration of social value for local areas, in line with its corporate mission and Poste Italiane Group policy on community initiatives
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.
Financial inclusion initiatives within Post Offices 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.
With this in mind, in line with its diversity inclusion and enhancement policies, the Company has developed a trial initiative aimed at hiring deaf people who are fluent in sign language, to work at special counters for deaf customers in Post Offices in large cities. As well as offering real employment and the opportunity to develop professional skills, the project aims to provide deaf citizens with a local, accessible and personalised service based on their needs.
Initiatives for foreign citizens With a view to extending its range of services to foreign citizens and at the same time promoting the socio-economic inclusion of foreign communities in Italy, Poste Italiane has set up multi-ethnic Post Offices nationwide. Post offices dedicated to foreign citizens - multi-ethnic or mono-ethnic depending on local requirements - are located in areas with a high concentration of foreign citizens or in busy areas, such as near railway stations. In addition, an ad hoc display was created to support operators with all the advertising and communication material translated into the various languages of the target customer segments identified.
Over 7,000 ATM equipped with voice guidance in 2019 + 1,751 compared to
The financial inclusion of senior citizens, young people and minors During 2019, there was the inauguration of the Silver Economy Programme designed for senior citizens, with the aim of managing all the Group’s actions dedicated to this important segment of the population in a single synergistic framework. The programme provides for several lines of action: � involvement of start-ups 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 letter carriers and Post Offices; � financial and computer literacy events at Post Offices; � development of new dedicated offerings; � dedicated business initiatives.
The course is divided into three thematic modules: � saving: teaches how to manage financial, energy and natural resources etc. responsibly in order to generate economic and social progress; � sharing: stresses the importance of entrusting savings to financial institutions so that, when pooled and invested, they result in economic benefits for the community and become a means to promote the country’s development; � quality of life: broadly encompasses savings goals, highlighting the fact that responsible behaviour is a priority for the entire planet and involves the global community.
Learning path divided in three modules: � saving � sharing � quality of life
• Transformation of customer service • Customer protection and satisfaction • Data protection and adequate
By 2022 Hours of training provided to the sales network 6.5 million 1.4 million
Poste Italiane is oriented towards constant improvement in the quality of products and services offered to its customers, in an attempt to fully meet their expectations. In an increasingly mobile, social and multi-channel world, users’ needs and behaviour are changing and it is therefore necessary to consolidate relations between the Company and its customers.
In this regard, the Code of Ethics lays down that Group companies must base their relations with customers on competence, professionalism, courtesy, transparency, fairness and impartiality. These values and principles guide the essential rules of the conduct with customers, ensuring fruitful and lasting relationships, providing comprehensive and accurate information on products and services, with a view to enabling informed choices and avoid creating inaccurate expectations.
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, the Company has maintained, in continuity with the previous year, the “Poste Italiane Group Customer experience” indicator - which monitors the quality perceived by customers for the most important products, services and channels of the Poste Italiane Group - for the CEO, the Internal Auditing function and all staff functions.
This process of change has provided a training path that allows all the professional figures involved to understand the transformation scenario, acquire knowledge and use of new dedicated tools and contribute to the implementation of the new service model.
During 2019, work continued on the development of the Corporate Reliability process, with particular focus on the postal-logistics process. Specifically, the operating model, process phases and operational tools (including data analytics systems and artificial intelligence) of the Corporate Reliability function have been defined.
As part of the Deliver 2022 Plan, the customer service transformation plan continues.
Particular attention is reserved to quality 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.
In order to achieve the maximum effectiveness and efficiency of processes, activities and resources, Poste Italiane has decided to adopt an Integrated Management System that brings together the most significant aspects of all the management systems currently in place, in order to align business processes and make the widespread distribution of business procedures increasingly flexible. Specifically, Poste Italiane SpA has implemented an effective Quality Management System, in compliance with the UNI EN ISO 9001:2015 standard, with which it undertakes to carry out its activities through the adoption of the following principles: � maintaining adequate service quality, in particular by ensuring efficiency and continuity of service in accordance with the specific requirements; � maintaining the adequacy of the services offered to customers; � respecting time and optimising the cost/quality ratio of products and services.
The Quality Management System aims at ensuring that the products and services provided meet customer expectations and applicable mandatory requirements, as well as enabling continuous improvement of performance to enhance the Company’s competitive standard in the market. Indeed, the System is a fundamental tool for defining the rules and limits applicable to quality control at all levels. Any anomalies are duly recorded and reported thanks to specific audits and periodic checks.