Poste Italiane

Investor Presentation • Mar 15, 2017

15 March 2017

Investor Relations

(€m)

Key Numbers

	FY 2015	FY 2016	Var %
Revenues	30,739	33,112	+8%
EBIT	880	1,041	+18%
Net Profit	552	622	+13%
EPS (€)	0.42	0.48	+13%
DPS (€)	0.34	0.39	+15%

FY 2016: FIGURES HIGHLIGHTS

TOTAL ASSETS UNDER MANAGEMENT/ADMINISTRATION

FOCUS ON FINANCIAL SERVICES (1/3) REVENUES EVOLUTION

(€m)

1. Current accounts/Active Portfolio Management includes interests income, realized capital gain and income from financial assets at FVTPL (Fair Value through profit or loss)

2. Transaction banking includes: payment slips, F24, money transfers, pension cheques and other revenues from current accounts. Net of intercompany values

3. Payment Card Fees includes a one-off capital gain of €121 million related to the acquisition and merger of Visa Europe Ltd with the US-registered company, Visa Incorporated

FOCUS ON FINANCIAL SERVICES (2/3) REVENUES BREAKDOWN

	FY 2016 €m FY 16 vs FY 15 (var.%)	Rationale
Return on Current Account Deposits	1,983 +0.5%	Increase mainly due to higher capital gains compensated by lower interest income
Fees from Postal Savings Collection	1,577 -2.0%	Lower fees related to lower recognized commercial costs
		Lower revenues from delegated services partially offset
Fees from Transaction Banking	1,048 -0.9%	by higher revenues from payments slips and tax return forms
Distribution Fees	327 20.2%	Increase mainly due to a better performance on personal loans
Distribution Fees
Payment Card Fees Payment Card Fees	359 +49.0%	Includes a one-off capital gain from VISA Europe and higher revenues from Postepay Evolution offset by lower fees from debt/prepaid cards

5,294 Total Revenues +2.7%
----------------------------------

FOCUS ON FINANCIAL SERVICES (3/3)

ACTIVE PORTFOLIO MANAGEMENT

(€m)

AVERAGE DEPOSITS1 ACTIVE PORTFOLIO MANAGEMENT2

Avg deposits from Retail and Corporate customers Entirely invested in Italian Government bonds

1. Including current accounts, time deposits and repurchase agreements

2. Including interest income and realized capital gains

3. Average yield calculated as interest income and realized capital gains on total financial assets

BANCOPOSTA REGULATORY FRAMEWORK AND CAPITAL POSITION

FOCUS ON INSURANCE & ASSET MANAGEMENT

GROUP GWP AND TECHNICAL RESERVES EVOLUTION

1. Including non-life technical reserves and net of re-insurance reserves

STRONG SOLVENCY II UNDER OUR APPROVED STANDARD MODEL POSTE VITA

FOCUS ON MAIL & PARCELS VOLUMES AND MARKET REVENUES EVOLUTION

TOTAL GROUP OPERATING COSTS EVOLUTION

Group Operating Costs

COST STRUCTURE AT CONSOLIDATED LEVEL FOCUS ON LABOUR COSTS

FROM GROUP EBIT TO NET INCOME

GROUP CAPITAL EXPENDITURES

Capex evolution (€m) Capex Breakdown by Division (%)

INDUSTRIAL NET FINANCIAL POSITION

PLAN EXECUTION (1/3) DELIVERING RESULTS

	FY 2014	FY 2015	FY 2016	CAGR (2016 vs 2014)
Revenues (€m)	28,512	30,739	33,112	7.8%
EBIT (€m)	691	880	1,041	22.7%
Net Profit (€m)	212	552	622	71.3%
Capex (€m)	437	488	451	1.6%
Clients' Assets (€bn)	462	476	493	3.3%
DPS (€)	0.19	0.34	0.39	43.3%

Three years of solid growth in revenues, earnings and dividends

PLAN EXECUTION (2/3) DELIVERING GROUP'S ASSETS OPTIMIZATION

RATIONALIZATIONS OF 10 LEGAL ENTITIES INSIDE THE GROUP

Simplified Group structure

Focus on acquisitions towards strategic priorities

PLAN EXECUTION (3/3) OUR CHALLENGES GOING FORWARD

APPENDIX

€m	FY 2015	FY 2016	Var.%
Revenue from sales and services	8,809	8,743	(0.8%)
Insurance premium revenue	18,197	19,884	9.3%
Other income from financial and insurance activities	3,657	4,421	20.9%
Other operating income	75	64	(14.7%)
Sales	30,739	33,112	7.7%
Personnel costs	(6,151)	(6,241)	1.5%
Other operating expenses	(3,444)	(3,292)	(4.4%)
Net change in technical provisions for insurance business and other claims expenses	(19,683)	(21,958)	11.6%
Depreciation & amortization	(581)	(581)	n.m.
EBIT	880	1,041	18.3%
Net interest income / (Expense)	53	15	(71.4%)
Profit before tax	933	1,056	13.2%
Tax	(381)	(434)	13.9%
Net income	552	622	12.7%

€m	FY 2015	FY 2016	Var.%
Cash & Equivalents	3,142	3,902	24.2%
BancoPosta related Cash	3,161	2,494	(21.1%)
Receivables & Inventory	2,158	2,073	(3.9%)
Financial Assets	160,090	174,362	8.9%
Tangible and Intangible Assets	2,796	2,649	(5.3%)
Other	4,489	5,005	11.5%
Non-current assets and groups of assets held for sale	0	2,720	n.m.
Total Assets	175,836	193,205	9.9%
Trade Payables	1,453	1,506	3.6%
Financial liabilities	57,478	60,921	6.0%
Technical Reserves	100,314	113,678	13.3%
Other	6,933	6,906	(0.4%)
Liabilities related to assets held for sale	0	2,060	n.m.
Total Liabilities	166,178	185,071	11.4%
Shareholders capital	1,306	1,306	-
Reserves	8,352	6,828	(18.2%)
Totale Equity	9,658	8,134	(15.8%)
Total Liabilities & Equity	175,836	193,205	9.9%

GROUP CASH FLOW STATEMENT FY 2016

€m	FY 2015	FY 2016	Var.%
Net income	552	622	12.7%
Depreciation and amortization	581	581	-
Net provisions for risks and charges	454	563	24.0%
(Use of Provisions for risks and charges)	(392)	(448)	14.3%
Net change in employee termination benefits and pension plans	(65)	(81)	24.6%
(Gains) / Losses on disposals	0	3	n.m.
Other	(31)	74	n.m.
FFO	1,099	1,314	19.6%
Change in w orking capital	2,162	40	(98.1%)
Cash flow from operations	3,261	1,354	(58.5%)
Capital expenditures	(488)	(451)	(7.6%)
Net change in subsidiaries and associates	(211)	(1)	(99.5%)
Disposals	5	5	-
Cash flow from investments	(694)	(447)	(35.6%)
Dividend paid	(250)	(444)	77.6%
Cancellation of MEF receivables (CE 16/07/08)	535	0	n.m.
Cash Flow from financial assets and liabilities	(1,414)	387	n.m.
Cash flow from financing	(1,129)	(57)	(95.0%)
Net change in cash	1,438	850	(40.9%)
Net change in cash related to assets held for sale	0	(90)	n.m.
Total Net change in cash	1,438	760	(47.1%)

€m	FY 2015	FY 2016	Var.%
Working Capital
Trade receivables	2,346	2,172	(7.4%)
Inventories	134	137	2.2%
Other receivables and assets	3,200	3,671	14.7%
Current tax receivables	72	15	(79.2%)
Trade payables	(1,453)	(1,506)	3.6%
Other liabilities	(2,945)	(3,218)	9.3%
Current tax liabilities	(53)	(88)	66.0%
Working Capital	1,301	1,183	(9.1%)
Deferred tax asset	623	799	28.3%
Deferred tax liabilities	(1,177)	(746)	(36.6%)
Working Capital and deferred taxes	747	1,236	65.5%
Working capital related to net asset held for sale	0	96	n.m.
Net deferred taxes related to net asset held for sale	0	11	n.m.
Working capital and deferred taxes related to net asset held for sale	0	107	n.m.
Working Capital and deferred taxes including net asset held for sale	747	1,343	79.8%

€m	FY 2015	FY 2016	Var.%
Trade receivables	1,415	174	(87.7%)
Inventories	5	(3)	n.m.
Other receivables and assets	286	(471)	n.m.
Current tax receivables	587	57	(90.3%)
Trade payables	31	53	71.0%
Other liabilities	287	273	(4.9%)
Current tax liabilities	29	35	20.7%
Deferred tax assets	79	(176)	n.m.
Deferred tax liabilities	130	(431)	n.m.
Working capital and deferred taxes related to net asset held for sale	0	(107)	n.m.
Total Change in Working capital and deferred taxes including net asset held for sale	2,849	(596)	n.m.
Financial Income on discounted receivables	16	7	(56.3%)
Net w rite-dow ns and loss on receivables	42	(22)	n.m.
Deferred tax on fair value changes and TFR actuarial income	(210)	645	n.m.
Cancellation of MEF receivables (CE 16/07/08)	(535)	6	n.m.
Adjustments (non monetary items and shareholders' transactions)	(687)	636	n.m.
Change in Working Capital and deferred taxes as per cash flow statement	2,162	40	(98.1%)

€m

Property, plant and equipment	2,062	Totale Equity	2,758
Investment property	56
Intangible assets	430	Provisions for risks and charges	254
Investments*	1,877	Employee termination benefits and pension plans	1,324
Financial assets	1,102	Financial liabilities	1,246
Trade receivables	4	Deffered tax liabilities	25
Deferred tax assets	422	Other liabilities	68
Other receivables and assets	139
Total Non-current assets	6,092	Total Non-current liabilities	2,917
Inventories	133	Provisions for risks and charges	775
Trade receivables	1,878	Trade payables	1,374
Current tax assets	12	Current tax liabilities	73
Other receivables and assets	368	Other liabilities	1,575
Financial assets	134	Financial liabilities	701
Cash and cash equivalents	1,556
Total Current assets	4,081	Total Current liabilities	4,498
Total Assets	10,173	Totale Equity and Liabilities	10,173

Assets Equity adn Liabilities

Totale Equity	2,758
Provisions for risks and charges	254
Employee termination benefits and pension plans	1,324
Financial liabilities	1,246
Deffered tax liabilities	25
Other liabilities	68

l Total Non-current liabilities	2,917
Provisions for risks and charges	775
Trade payables	1,374
Current tax liabilities	73
Other liabilities	1,575
Financial liabilities	701

Total Current liabilities	4,498
Totale Equity and Liabilities	10.173

* It includes investments accounted for at cost in financial and insurance sectors

MAIL & PARCELS AND OTHER SERVICES NET DEBT BREAKDOWN FY 2016

€m	FY 2015**	FY 2016	Var.%
Cash and Cash Equivalents	1,331	1,577	18.5%
Current Financial Assets	169	63	(62.7%)
Short term debt	(515)	(2)	(99.6%)
Current part of long term debt	(16)	(14)	(12.5%)
Other current financial liabilities	(20)	(22)	10.0%
Current Financial Position	(551)	(38)	(93.1%)
Current Net Financial Position	949	1,602	68.8%
Long term debt	(400)	(400)	-
Bonds	(797)	(798)	0.1%
Other non current financial liabilities	(57)	(50)	(12.3%)
Non Current Financial Position	(1,254)	(1,248)	(0.5%)
Net Financial Position	(305)	354	n.m.
Non current financial assets	553	651	17.7%
Net Financial Position - Mail & Parcel and Other Sercvices	248	1,005	n.m.
Intersegment financial receivables	674	522	(22.6%)
Intersegment financial payables	(615)	(634)	3.1%
Net Financial Position (net of intersegments) *	307	893	n.m.

* Including a Net Financial Position of Other Services (€ 48m in 2016 and € 38m in 2015)

**Poste Tributi previously included in Mail & Parcel sector has been reclassified to Financial services

€m	FY 2015	FY 2016	Var.%
Total revenue	5,646	5,837	3.4%
o/w Market revenue	5,155	5,294	2.7%
o/w Intercompany revenue	491	543	10.7%
Personnel costs	(124)	(126)	2.0%
Other operating expenses	(4,614)	(4,896)	6.1%
EBITDA	908	815	(10.3%)
EBITDA margin	16.1%	14.0%
Depreciation and amortisation	(2)	(1)	(21.0%)
EBIT	907	813	(10.4%)
EBIT margin	16.1%	13.9%

€m	FY 2015	FY 2016	Var.%
Total revenue	21,459	23,773	10.8%
o/w Market revenue	21,459	23,772	10.8%
o/w Intercompany revenue	0	1	n.m.
Personnel costs	(32)	(39)	22.5%
Other operating expenses	(20,906)	(23,084)	10.4%
EBITDA	521	650	24.8%
EBITDA margin	2.4%	2.7%
Depreciation and amortisation	(11)	(14)	35.0%
EBIT	510	636	24.7%
EBIT margin	2.4%	2.7%

€m	FY 2015	FY 2016	Var.%
Total revenue	8,213	8,362	1.8%
o/w Market revenue	3,882	3,822	(1.5%)
o/w Intercompany revenue	4,331	4,540	4.8%
Personnel costs	(5,974)	(6,059)	(1.4%)
Other operating expenses	(2,277)	(2,204)	(3.2%)
EBITDA	(37)	99	365.4%
EBITDA margin	-0.5%	1.2%
Depreciation and amortisation	(530)	(536)	1.1%
EBIT	(568)	(436)	(23.2%)
EBIT margin	-6.9%	-5.2%

OTHER SERVICES POSTE MOBILE KEY FINANCIALS

€m	FY 2015	FY 2016	Var.%
P&L
Total revenue	334	268	(19.7%)
o/w Market revenue	242	224	(7.7%)
o/w Intercompany revenue	91	44	(51.7%)
Personnel costs	(22)	(17)	(21.6%)
Other operating expenses	(242)	(193)	(20.5%)
EBITDA	70	58	(16.7%)
EBITDA margin	20.9%	21.7%
Depreciation and amortisation	(39)	(30)	(22.9%)
EBIT	31	28	(8.9%)
EBIT margin	9.3%	10.6%
Non-operating income/(expenses)	(1)	(1)	10.9%
Profit before taxes	30	27	(9.5%)
Taxes	(11)	(9)	(17.9%)
Profit after taxes	19	18	(4.4%)

€m	FY 2015	FY 2016	Var.%
Cash flow statement
FFO	55.5	47.2	(15.0%)
Cash flow from investments	(28.8)	17.2	159.7%
Net change in cash	1.1	4.8	321.9%
Other key data
Average number of users (sim cards -#k)	3,471	3,643	4.9%
1 ARPU (€)	5.2	4.7	(9.3%)

1. calculated on total sim cards (active and non active sim cards)

INSURANCE AND ASSET MANAGEMENT EBIT 2015-2016 ROLLFORWARD

FINANCIAL SERVICES COST STRUCTURE AND PROFITABILITY AT DIVISIONAL LEVEL

1. Includes intersegment revenues

FOCUS ON INSURANCE AND ASSET MANAGEMENT REVENUES BREAKDOWN

INSURANCE AND ASSET MANAGEMENT COST STRUCTURE AND PROFITABILITY AT DIVISIONAL LEVEL

1. Includes intersegment revenues

FOCUS ON MAIL & PARCELS TOTAL REVENUES AND COST STRUCTURE

Depreciation & Amortization Intersegment Costs & Other Costs

SEGMENT FLOW DESCRIPTION FY 2016

(€m)

	Mail & Parcels Including Network	Financial Services	Insurance and Asset Management	Poste Italiane Group2
Market Revenues	3,822	5,294	23,772	33,112
Intersegment Revenues	4,540	543	1	0
Totale Revenues	8,362	5,837	23,773	33,112
Personnel Costs	(6,059)	(126)	(39)	(6,241)
Other operating costs1	(2,655)	(392)	(623)	(3,873)
Net change in Technical Provisions	0	0	(21,958)	(21,958)
Intersegment Costs	(85)	(4,506)	(517)	0
Operating Costs	8,798	(5,024)	(23,137)	32,071
Operating Profit (Loss)	(436)	813	636	1,041

1. Including external costs, and D&A

2. Including Other Services (Poste Mobile)

DISCLAIMER

This presentation contains certain forward-looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on Poste Italiane S.p.A.'s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Poste Italiane S.p.A. to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price and availability of fuel and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. Poste Italiane S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation. This presentation does not constitute a recommendation regarding the securities of the Company. This presentation does not contain an offer to sell or a solicitation of any offer to buy any securities issued by Poste Italiane S.p.A. or any of its subsidiaries. Pursuant to art. 154-BIS, par. 2, of the Unified Financial Act of February 24, 1998, the executive in charge of preparing the corporate accounting documents at Poste Italiane S.p.A., Luciano Loiodice, declares that the accounting information contained herein corresponds to document results, books and accounting records.

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