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Poste Italiane

Earnings Release Aug 2, 2016

4431_10-q_2016-08-02_5a9dee66-10b9-47f6-962a-e60f709718ab.pdf

Earnings Release

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Informazione
Regolamentata n.
1130-42-2016
Data/Ora Ricezione
02 Agosto 2016
17:38:31
MTA
Societa' : POSTE ITALIANE
Identificativo
Informazione
Regolamentata
: 77835
Nome utilizzatore : POSTEN03 - Fabio Ciammaglichella
Tipologia : IRAG 02
Data/Ora Ricezione : 02 Agosto 2016 17:38:31
Data/Ora Inizio
Diffusione presunta
: 02 Agosto 2016 17:53:32
Oggetto : year results Poste Italiane: BoD approves 2016 half
Testo del comunicato

Vedi allegato.

BOARD CO D OF DIREC ONTINUE CTORS AP GROWTH PPROVES H H OF REVE HALF‐YEA NUES AN AR RESULT D MARGIN TS 2016, NS

  • Total 2015) consolida ated reve enue: € 17 7.7 billion n, +10.9% % (€ 16.0 billion at t 30 June
  • Conso 2015), olidated o , € 722 mi operating illion, +13 profit: € 8 3% net of t 843 millio the Visa c on, + 32.1 capital gai 1% (€ 638 n million a t 30 June ee,
  • Conso € 451 olidated n million, + net profit: 4% net o : € 565 m of the Visa million, 29 a capital g .9% (€ 43 gain 35 million at 30 Ju ne 2015),
  • Total billion Assets un n at 31 De nder Mana ecember 2 agement/ 2015) /Administ ration: € 4 488.1 billi ion, +2.6% % (€ 475.9 91
  • Net in Decem ndustrial mber 2015 financial 5) position: : € 276 m million su urplus (€ 307 milli ion at 31

Rome, 2 Au Luisa Todi compliance ugust 2016 ni, reviewe e with inter The Boar ed and app rnational ac rd of Directo roved toda ccounting st ors of Poste ay the half‐ tandards (IA e Italiane S. year repor AS/IFRS). p.A. ("Poste t at 30 Jun e Italiane"), ne 2016, dr , chaired by rawn up in

--------------------------------------
First Half 2016 First Half 2015 Change
Total revenue 17.682 15,950 $+10.9%$
Operating profit 843 638 $+32.1%$
Net profit 565 435 $+29.9%$

Consolidat ted financia al highlights s (EUR/milli ion):

30.06.2016 31.12.2015 Change
Asset under Management/Administration 488.125 475.939 2.6%
Net industrial financial position 276 307 $-10.1%$

Mr. France follows: esco Caio, C Chief Execu utive Officer r and Gene eral Manage er, commen nted on the e results as

"Poste Ital recurring e best possib investmen consumer achieved s iane has re effect deriv ble evidenc ts, innovat services. In ignificant re egistered a ing from th e of the suc ion and ch n each of th esults in line noticeable he sale of th ccessful app ange that he company e with our s growth in r he Visa Eur plication of is strongly y segments strategic de revenues an ope holding the strateg oriented to s, during th evelopment nd margins, g. These ha gic plan, thr owards imp e first half priorities. , even net o alf‐year resu rough a pro proving the of the year of the non‐ ults are the ogramme of e quality of r, we have yseffef

In financia Postepay E l services: c Evolution h current acc has continu ount depos ed to impr sits have gr rove with a rown by +6. almost a m .5%; househ illion new hold lendin cards in th g by +49%; he first half 2016; and, in digital innovation, the new Postepay app has been downloaded by more than 3.5 million customers.

In the segment of insurance and asset management: the life insurance business has registered an income of 10.5 billion, and new non‐life products have been launched, which registered a growth rate of 59%.

In the traditional mail and parcel segment: the decline in revenue has slowed down, also due to a continuing growth in the parcel business, which has exceeded 13.9% in volumes, while we started implementing the new delivery model in accordance with AGCOM's resolution.

On this solid ground, we will continue to pursue our plans in the second half of 2016, the year for which our dividend policy has been confirmed. As in previous years, in the fourth quarter provisions will be allocated for transformation costs".

* * *

In addition to the standard financial measures defined by IFRS, Poste Italiane also utilises certain alternative performance measures, with a view of providing a clearer assessment of the business performance and financial position. The meaning and contents of such measures are described in the annex, in line with the ESMA/2015/1415 Guidelines of 5 October 2015.

* * *

In the first half of 2016, the Group's total revenue, inclusive of insurance premiums, registered a 10.9% growth compared with the same period in the previous year, rising to € 17.7 billion. The positive performance of the Insurance Services and Asset Management business, with revenues equal to €12.9 billion, 14.5% up compared with the same period of the previous year, and the steady performance of the financial services generating revenues for €2.8 billion, have more than offset the expected decline in revenues from Postal and Business Services (‐2.5% to €1,884 million), mainly driven by a reduction in mail volumes (‐10.3%). The express delivery, logistics and parcel business shows a 7.1% growth in revenues versus the same period of the previous year, generating €314 million.

The operating profit, equal to €843 million, registered a 32.1% increase versus the same period in the previous year (€ 638 million). Such increase was due to the growth in revenues combined with a slight reduction in operating costs. As already in the year 2015, the half‐year result further benefited from the timing of accrual of the capital gains related to the active management of BancoPosta's securities portfolio. Moreover, in the month of June, as part of the global transaction for the acquisition of Visa Europe Ltd by Visa Incorporated, the Holding Company executed the sale of its equity holding in that company, with a non‐recurring income of €121 million.

The net profit is € 565 million, also showing an increase versus €435 million in the same period of the previous year.

The Group net financial position registered a €7.04 billion surplus versus €8.66 billion at 31 December 2015, mainly due to a €1,398 million decrease in the fair value of financial instruments. The cash flow of non‐financial operations was positive by € 342 million, after financing greater tax credits for the prepayment of withholding and substitute taxes on the capital gains of life insurances, and contributed to net industrial investments to the amount of €146 million and distributed dividends for €444 million.

The net industrial financial position shows a surplus of € 276 million. The € 31 million moderate contraction from 31 December 2015 was primarily due to the payment of bonuses and incentives to employees with reference to the previous fiscal year, and greater trade receivables towards BancoPosta RFC (segregated assets) in consideration of distribution services provided to the latter.

Capital expenditure ,before disposals, amounts to € 151 million for the period, and were primarily related to the computerisation of telecommunication networks and the modernization and upgrade of properties . In 2016, among other things, a process of modernisation and digitalisation of post offices was pursued with the roll‐out of wi‐fi connectivity in 1,558 post offices and the installation of the "new queue management" system in 1,272 offices, in view of further improving the quality of customer services, as well as the opening of 19 multilingual offices across the national territory to facilitate access to the Group's services for "new Italians".

During the first half of 2016, the client assets under management/administration rose by 2.6% from € 475.9 billion at 31 December 2015 to € 488.1 billion. This value was mainly driven by a growth in technical provisions in the life insurance business and by BancoPosta's current account deposits in the presence of essentially stable postal savings.

As part of the efficiency effort and requalification of human resources included in the Business Plan, during the first half of 2016, about 730 new resources were introduced (including 220 conversions from part‐time to full‐time), while the total average headcount of the Group fell by about 1,700 units compared with 31 December 2015. In addition, 3,900 employees have already signed up to the pre‐retirement plan, including 2,500 who will be leaving during the second half of 2016. Finally, more than 1.4 million hours of training were provided to the Group's personnel.

Information on the main operating segments is reported below.

FINANCIAL SERVICES

  • External revenues of € 2.8 billion, up 6.2%
  • Operating profit up 6.4% to € 485 million
  • BancoPosta's average deposits total € 48.1 billion, up 6.5% on 31 December 2015
  • 2.5 million Postepay Evolution cards in circulation at 30 June 2016

Total revenues of €3.1 billion are higher than in the corresponding period of the previous year due to non‐recurring proceeds generated by the disposal of the stake in Visa Europe Ltd, revenues from the active management of the securities portfolio held by BancoPosta and fees received for the distribution of loan products.

In addition, the number of Postepay Evolution cards – the personal rechargeable prepaid card with IBAN code – issued since the initial launch (July 2014) has exceeded 2.6 million, with 822,000 cards issued in the first half of 2016.

Poste Italiane, through BancoPosta, has continued to strengthen its services for Italian households by expanding the range of consumer loans and mortgages, with different solutions in terms of length, amount and repayment flexibility.

BancoPosta's average deposits (including long‐term repos) amounted to € 48.1 billion, registering a 6.5% increase versus € 45.2 billion at 31 December 2015.

The increase in operating costs was largely related to the rising costs of the retail network which are paid by BancoPosta to the Postal and Business Services operating unit in a measure almost proportional to the revenues achieved.

The operating profit, equal to €485 million, registered a 6.4% increase versus the same period in the previous year (€ 456 million).

INSURANCE SERVICES AND ASSET MANAGEMENT

  • Insurance and asset management revenues up 14.5% to € 12.9 billion
  • Operating profit of € 270 million, up 8.9%

Total revenues, inclusive of other income from insurance operations, amounted to € 12.9 billion, registering a 14.5% increase on the same period of the previous year (€ 11.2 billion) mainly accounted for by an increase in insurance premiums. More specifically, Poste Vita, the leading Italian insurance provider with technical provisions amounting to € 109.3 billion (€ 100.2 billion at the end of December 2015) collected premiums for approximately € 10.5 billion (€ 9.4 billion in the first half of 2015), mainly through the sale of Class I products. The positive performance of the premium revenues from life products was physiologically offset by the increase in insurance technical provisions. A positive growth was also registered in non‐life and asset‐management products, although the revenue base is still marginal. Even though the segment's impact on revenue is still marginal, the registered increase testifies to growing customer interest in this offer, in line with medium‐term expectations reported in the plan.

The operating profit was € 270 million, up 8.9% compared to the same period in the previous year (€ 248 million), primarily due to the above‐described sales dynamics together with positive results in investment management.

POSTAL AND BUSINESS SERVICES

  • External revenues of € 1.9 billion, down 2.5% (€49 million).
  • Revenues from other operating segments equal to €2.4 billion, up 8.1% (€183 million)

Total revenues amount to € 4.3 billion (inclusive of € 2.4 billion in captive revenue, which grew during the period mainly due to distribution services provided to BancoPosta). The decline in external revenues is related to an expected fall in traditional mail volumes, which affected a number of products included in the Universal Postal Service. The increase in intersegment revenues, on the other hand, has to be related to the above described performance of the BancoPosta RFC revenues.

Actions are still ongoing to improve the quality of traditional postal services and the efficiency of the related operating processes.

The initial trial phase of the new Universal Service has been completed, as indicated in the AGCOM resolution 395/15 of 25 June 2015 envisaging the progressive introduction of alternate day delivery for up to 23% of the Italian population. The new regulatory framework will allow to best respond to changing customer needs.

The parcel service posted a growth in volumes by 14.0% compared to the same period of the previous year, for a total number of 46 million parcels handled in the first half of 2016, also due to the growing development of e‐commerce in Italy.

The operating profit amounts to €74 million (€ ‐89 million in the same period of the previous year).

It should be noted that, as in previous years, the transformation costs for further efficiency improvements envisaged in the Business Plan will be allocated in the fourth quarter 2016, only after taking formal commitments with the work councils.

RECENT EVENTS AND BUSINESS OUTLOOK

Key events during the period

On 27 April 2016, the partial demerger of the fixed line telecommunication business ("Rete Fissa TLC") of the subsidiary Poste Mobile S.p.A. in favour of Poste Italiane was executed. The transaction, effective since 1 May 2016 for accounting and tax purposes, was conducted in line with the Group's strategic plan, which envisions the business units as centres of excellence focusing on the development of service products within their specific competences, while at the same time pursuing an integrated management of the Group's infrastructures and digital systems, providing great benefits in terms of process streamlining and service quality.

On 21 June 2016, Poste Italiane SpA, as principal member of Visa Europe Ltd, transferred its shareholding in Visa Europe as part of the global transaction for the acquisition and merger of said company into the US based company Visa Incorporated. Said shareholding was assigned to Poste Italiane SpA at the time of the incorporation of Visa Europe Ltd, and was then booked at its nominal value of ten euros. The consideration received, for a total fair value of € 121 million, is comprised of: (i) € 88 million in cash, (ii) 32,059 "Series C Convertible Participating Preferred Stocks" of Visa Incorporated, and (iii) € 8 million to be paid by Visa Incorporated three years after the closing of the deal.

Main events subsequent to 30 June 2016

On 20 July 2016, the 8th Standing Committee of the Italian Senate on Public Works expressed a favourable opinion with remarks on the Decree by the President of the Council of Ministers approved on 31 May 2016 on a preliminary basis, which defines the privatisation criteria and disposal procedure for a further share of the Ministry of the Economy and Finance's holding in Poste Italiane S.p.A., such as to retain a state participation of no less that 35% in the Company's share capital, also through Cassa Depositi e Prestiti. At the date of this Report, it is believed that the public sale offer aimed at the investor public in Italy and/or Italian and international institutional investors may take place in autumn this year.

We point out that, on 24 June 2016, the Extraordinary General Meeting of Cassa Depositi e Prestiti Spa approved an increase in the share capital reserved to MEF for an amount of € 2.9 billion inclusive of share premiums. The capital increase will be released by the assignment by MEF to CDP of a 35% holding in the share capital of Poste Italiane SpA, to be allocated to CDP's segregated assets, in relation to which the guidance and management function will continue to be exercised by MEF. The capital increase and the assignment of Poste Italiane will take place not later than 31 December 2016, on completion of the authorisation procedure required to transfer the holding.

Business outlook

With reference to traditional postal services, in the second half of 2016 the Group will continue the restructuring process for the segment, leveraging the new regulatory framework on the one hand, and, on the other, the greater efficiency achieved by implementing the new delivery model, in agreement with trade unions. The Group will also continue in its efforts to optimise and streamline its offering portfolios, both for the retail and the business targets, also in view of preserving its leadership in the postal service market and further improving its competitive position in the express delivery and parcel markets, where there will be continued attention for B2C, a growing segment driven by e‐commerce.

BancoPosta RFC will also continue to pursue its strategic objectives, with particular attention to fully exploiting its existing customer base, by the targeted offering of products and services designed to meet customer needs, to consolidate relationships and increase deposits; strengthening its position in the e‐payment system segment and in collection and payment services, helping to drive the digitalisation of the Public Administration; growing in the consumer credit market and repositioning in the "digital" market as part of Poste Italiane's wider multichannel strategy. In addition, the strategy of actively managing the securities portfolio, with the aim to stabilise overall returns in terms of interest income and capital gains, will continue.

As regards Savings products, the Group will continue to pursue growth in Class I products with the purpose to capitalise on PosteVita leadership position, and to strengthen the asset management business by a further expansion of its offer range. In accordance with strategic priorities, the Insurance segment aims at renewing its current products and developing solutions designed to respond to a growing need for person and asset protection policies and complementary pensions, making its offer simpler and more accessible and improving its position in the welfare market (social security, health and social care). In order to support this process, particular attention will be paid to the strengthening and upgrading of IT systems for the development of digital solutions aimed at constantly improving service accessibility.

* * *

A conference call will be held at 6 p.m. today, 2 August 2016, in order to present the results for the first half of 2016 to financial analysts and institutional investors, Journalists will be able to listen to the call. Supporting material will be made available in the "Investors" section of the website www.posteitaliane.it as the conference call begins.

Tables showing the results of the individual business units (before intersegment eliminations) are provided below, together with the period accounts (consolidated statement of financial position, consolidated statement of profit/loss for the period, consolidated statement of comprehensive income, consolidated statement of changes in equity and condensed consolidated statement of cash flows).

A brief description of the "alternative performance indicator" used is also provided.

The manager responsible for financial reporting, Luciano Loiodice, pursuant to art. 154 bis, paragraph 2 of the Consolidated Law on Finance, declares that the accounting information contained in this release is consistent with the underlying documents, accounting books and records.

* * *

Condensed financial information on the operating segments.

In compliance with the provisions of IFRS 8 – Operating Segments, an operating segment is a component of an entity: a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity) and b) whose operating results are reviewed regularly by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Following is the key financial information on the operating segments of the Poste Italiane Group.

FINANCIAL SERVICES

Results (EUR/million):

First Half 2016 First Half 2015 Change
External revenue 2,830 2,664 6.2%
Intersegment revenue 280 254 10.0 %
Total revenue 3,110 2,918 6.6%
Operating profit 485 456 6.4%

INSURANCE SERVICES

Results (EUR/million):

First Half 2016 First Half 2015 Change
External revenue 12,854 11,230 14.5%
Intersegment revenue
Total revenue 12,854 11,230 14.5%
Operating profit 270 248 8.9%

POSTAL AND BUSINESS SERVICES

Results (EUR/million):

First Half 2016 First Half 2015 Change
External revenue 1,884 1,933 ‐2.5%
Intersegment revenue 2,440 2,257 8.1%
Total revenue 4,324 4,190 3.2%
Operating profit 74 ‐ 89 n.s.

* * *

ALTERNATIVE PERFORMANCE MEASURES

We are reporting below the meaning and content of the "alternative performance measures", which are not defined by IAS/IFRS but have been used in this release in view of providing a clearer assessment of the Group's operating performance and financial position.

GROUP NET FINANCIAL POSITION: the sum of financial liabilities, insurance technical provisions, financial assets, reinsurers' share of technical provisions, BancoPosta cash and deposits and cash and cash equivalents.

NET INDUSTRIAL FINANCIAL POSITION: the sum of the net financial position of the Postal and Business Services segment and of the net financial position of the Other Services segment, before adjusting for intersegment transactions.

Breakdown of Net Financial Position (EUR/million)

Postal and
Business
Services
Financial
Services
Insurance
Services and
Asset
Management
Other
Services
Eliminations Consolidated
Balance at 30 June 2016
Financial liabilities (1,808) (61,735) (1,206) (4) 1,638 (63,115)
Technical provisions for insurance (109,397) (109,397)
business
Financial assets 1,460 62,603 112,351 32 (1,257) 175,189
Technical provisions attributable to 65 65
reinsurers
Cash and deposits attributable to 2,556 2,556
BancoPosta
Cash and cash equivalents 584 838 690 12 (381) 1,743
Net financial position 236 4,262 2,503 40 7,041
Net industrial financial position 236 40 276
Balance at 31 December 2015
Financial liabilities (2,442) (55,418) (1,218) (4) 1,604 (57,478)
Technical provisions for insurance (100,314) (100,314)
business
Financial assets 1,396 57,574 102,409 26 (1,315) 160,090
Technical provisions attributable to 58 58
reinsurers
Cash and deposits attributable to 3,161 3,161
BancoPosta
Cash and cash equivalents 1,315 485 1,615 16 (289) 3,142
Net financial position 269 5,802 2,550 38 8,659
Net industrial financial position 269 38 307

* * *

For further information:

Poste Italiane S.p.A. – Press Office Pierpaolo Cito Head of Press Office Tel. +39 0659589008 Mob. +39 3351823403 Mail [email protected]

Poste Italiane S.p.A. – Investor Relations Luca Torchia Head of Investor Relations Tel. +39 0659589421 Mob. +39 3346402438 Mail [email protected]

FINANCIAL STATEMENTS OF POSTE ITALIANE GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS at 30 June 2016 of which,
related party
transactions
at 31 December
2015
of which, related
party
transactions
Non-current assets
Property, plant and equipment 2,087 - 2,190 -
Investment property 58 - 61 -
Intangible assets 498 - 545 -
Investments accounted for using the equity method 212 212 214 214
Financial assets 153,712 4,059 139,310 3,988
Trade receivables 76 - 54 -
Deferred tax assets 728 - 623 -
Other receivables and assets 2,558 1 2,303 1
Technical provisions attributable to reinsurers 65 58
Total 159,994 145,358
Current assets
Inventories 137 - 134 -
Trade receivables 2,224 758 2,292 904
Current tax assets 175 - 72 -
Other receivables and assets 1,034 4 897 2
Financial assets 21,477 7,066 20,780 7,274
Cash and deposits attributable to BancoPosta 2,556 - 3,161 -
Cash and cash equivalents 1,743 773 3,142 391
Total 29,346 30,478

TOTAL ASSETS 189,340 175,836

LIABILITIES AND EQUITY at 30 June 2016 of which,
related party
transactions
at 31 December
2015
of which, related
party
transactions
Equity
Share capital 1,306 - 1,306 -
Reserves 3,014 - 4,047 -
Retained earnings 4,338 - 4,305 -
Equity attributable to owners of the Parent 8,658 9,658
Equity attributable to non-controlling interests - - - -
Total 8,658 9,658
Non-current liabilities
Technical provisions for insurance business 109,397 - 100,314 -
Provisions for risks and charges 603 52 634 50
Employee termination benefits and pension plans 1,457 - 1,361 -
Financial liabilities 8,727 85 7,598 77
Deferred tax liabilities 912 - 1,177 -
Other liabilities 886 - 920 -
Total 121,982 112,004
Current liabilities
Provisions for risks and charges 767 10 763 11
Trade payables 1,293 187 1,453 174
Current tax liabilities 281 - 53 -
Other liabilities 1,971 77 2,025 91
Financial liabilities 54,388 28 49,880 3
Total 58,700 54,174
TOTAL EQUITY AND LIABILITIES 189,340 175,836

CONSOLIDATED STATEMENT OF PROFIT/LOSS FOR THE PERIOD

(€m) (€m)
For the six months
ended 30 June
2016
of which,
related party
transactions
For the six
months ended 30
June 2015
of which,
related party
transactions
Revenue from sales and services
Insurance premium revenue
4,316
10,551
1,122
-
4,390
9,474
1,199
-
Other income from financial and insurance
activities
2,781 43 2,055 31
of which, non-recurring income
Other operating income
121
34
1 -
31
3
Total revenue 17,682 15,950
Cost of goods and services 1,215 77 1,239 79
Net change in technical provisions for insurance
business and other claims expenses
11,944 - 10,385 -
Other expenses from financial and insurance
activities
309 - 305 -
Personnel expenses 2,985 20 2,983 20
Depreciation, amortisation and impairments 299 - 289 -
Capitalised costs and expenses (8) - (12) -
Other operating costs 95 6 123 (4)
Operating profit/(loss) 843 638
Finance costs 48 - 61 -
Finance income 57 - 88 2
Profit/(Loss) on investments accounted for using
the equity method
6 - - -
Profit/(Loss) before tax 858 665
Income tax expense 293 - 230 -
of which, non-recurring costs/(income) - (17)
PROFIT FOR THE PERIOD 565 435
of which, attributable to owners of the Parent 565 435
of which, attributable to non-controlling interests - -
Earnings per share 0.432 0.333
Diluted earnings per share 0.432 0.333

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(€m) (€m)
For the six
months ended
30 June 2016
For the year
ended 31
December
2015
For the six
months ended
30 June 2015
Profit/(Loss) for the period 565 552 435
Items to be reclassified in the Statement of profit or loss for the period
Available-for-sale financial assets
Increase/(decrease) in fair value during the period (942) 1,591 (222)
Transfers to profit or loss (482) (467) (350)
Cash flow hedges
Increase/(decrease) in fair value during the period 47 13 (39)
Transfers to profit or loss (21) (71) (39)
Taxation of items recognised directly in, or transferred from, equity to be reclassified in
the Statement of profit or loss for the period
364 (179) 212
Share of after-tax comprehensive income/(loss) of investees accounted for using equity
method
- - -
Items not to be reclassified in the Statement of profit or loss for the period
Actuarial gains/(losses) on provisions for employee termination benefits and pension
plans
(126) 81 85
Taxation of items recognised directly in, or transferred from, equity not to be
reclassified in the Statement of profit or loss for the period
38 (30) (27)
Share of after-tax comprehensive income/(loss) of investees accounted for using equity
method
- -
Total other components of comprehensive income (1,122) 938 (380)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (557) 1,490 55
of which, attributable to owners of the Parent (557) 1,490 55
of which, attributable to non-controlling interests - - -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity
Reserves
Share capital Legal reserve BancoPosta RFC reserve Fair value
reserve
Cash flow
hedge reserve
Reserve for
investees
accounted for
using equity
method
Retained
earnings /
(Accumulated
losses)
Total equity
attributable to
owners of the
Parent
Equity
attributable to
non
controlling
interests
Total equity
Balance at 1 January 2015 1,306 299 1,000 1,813 48 - 3,952 8,418 - 8,418
Total comprehensive income for the period - - - (385) (53) - 493 55 - 55
Attribution of profit to reserves - - - - - - - - - -
Dividends paid - - - - - - (250) (250) - (250)
Changes due to share-based payments - - - - - - - - - -
Other changes - - - - - - - - - -
Change in scope of consolidation - - - - - - - - - -
Other shareholder transactions - - - - - - - - - -
Balance at 30 June 2015 1,306 299 1,000 1,428 (5) -
4,195
8,223 - 8,223
Total comprehensive income for the period - - - 1,311 14 - 110 1,435 - 1,435
Attribution of profit to reserves - - - - - - - - - -
Dividends paid - - - - - - - - - -
Changes due to share-based payments - - - - - - 1 1 - 1
Other changes - - - - - - - - - -
Change in scope of consolidation - - - - - - - - - -
Other shareholder transactions - - - - - - (1) (1) - (1)
Balance at 31 December 2015 1,306 299 1,000 2,739 9 -
4,305
9,658 - 9,658
Total comprehensive income for the period - - - (1,052) 18 - 477 (557) - (557)
Attribution of profit to reserves - - - - - - - - - -
Dividends paid - - - - - - (444) (444) - (444)
Changes due to share-based payments - - - - - - - - - -
Other changes - - - - - 1 - 1 - 1
Change in scope of consolidation - - - - - - - - - -
Other shareholder transactions - - - - - - - - - -
Balance at 30 June 2016 1,306 299 1,000 1,687 27 1
4,338
8,658 - 8,658

(€m)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(€m)
For the six months
ended 30 June
For the six months
ended 30 June
2016 2015
Unrestricted net cash and cash equivalents at beginning of period 1,783 747
Cash subject to investment restrictions 1 511
Cash attributable to technical provisions for insurance business 1,324 415
Amounts that cannot be drawn on due to court rulings 18 16
Current account overdrafts
Cash received on delivery (restricted)
5
11
8
7
Cash and cash equivalents at beginning of period 3,142 1,704
Cash and cash equivalents at beginning of period 3,142 1,704
Profit/(loss) for the period 565 435
Depreciation, amortisation and impairments 299 289
Losses and impairments/(recoveries) on receivables 18 -
(Gains)/Losses on disposals 1 -
Impairment of available for sale investments - -
(Increase)/decrease in inventories (3) (1)
(Increase)/decrease in receivables and Other assets (397) (149)
Increase/(decrease) in Payables and Other liabilities (63) (54)
Movement in provisions for risks and charges (27) 99
Movement in provisions for employee termination benefits and pension plans (30) (24)
Differences in accrued finance costs and income (cash correction) (29) (28)
Other changes 8 (15)
Net cash flow generated by/(used in) non-financial operating activities [a] 342 552
Increase/(decrease) in liabilities attributable to financial activities 4,321 621
Net cash generated by/(used for) held for trading financial assets attributable to financial activities - -
Net cash generated by/(used for) available for sale financial assets attributable to financial activities (2,751) (669)
Net cash generated by/(used for) held to maturity financial assets attributable to financial activities 103 806
(Increase)/decrease in cash and deposits attributable to BancoPosta 605 305
(Increase)/decrease in other assets attributable to financial activities (1,054) (1,217)
(Income)/expenses from financial activities (999) (852)
Cash generated by/(used for) assets and liabilities attributable to financial activities [b] 225 (1,006)
Net cash generated by/(used for) financial assets at fair value through profit or loss attributable to insurance activities
Increase/(decrease) in net technical provisions for insurance business
(2,348)
7,662
(3,752)
6,630
Net cash generated by/(used for) available for sale financial assets attributable to insurance activities (4,592) (1,512)
(increase)/decrease in other assets attributable to insurance activities (5) (122)
(Gains)/losses on financial assets/liabilities measured at fair value (710) 65
(Income)/expenses from insurance activities (866) (1,067)
Cash generated by/(used for) assets and liabilities attributable to insurance activities [c] (859) 242
Net cash flow from/(for) operating activities [d]=[a+b+c] (292) (212)
- of which, related party transactions 320 (804)
Investing activities
Property, plant and equipment, investment property and intangible assets (151) (137)
Investments - (210)
Other financial assets (106) -
Disposals
Property, plant and equipment, investment property and intangible assets and assets held for sale 5 2
Investments - -
Other financial assets 100 3
Change in scope of consolidation - -
Net cash flow from/(for) investing activities [e] (152) (342)
- of which, related party transactions (9) (212)
Proceeds from/(Repayments of) borrowings (513) (164)
(Increase)/decrease in loans and receivables 2 114
Dividends paid (444) (250)
Receivable authorised by 2015 Stability Law in implementation of Sentence of the European Court - 535
Net cash flow from/(for)financing activities and shareholder transactions [f] (955) 235
- of which, related party transactions (286) 397
Net increase/(decrease) in cash [g]=[d+e+f] (1,399) (319)
Cash and cash equivalents at end of period 1,743 1,385
Cash and cash equivalents at end of period 1,743 1,385
Cash subject to investment restrictions (202) -
Cash attributable to technical provisions for insurance business (487) (999)
Amounts that cannot be drawn on due to court rulings (20) (17)
Current account overdrafts (6) (6)
Cash received on delivery (restricted) (10) (20)
Unrestricted net cash and cash equivalents at end of period 1,018 343

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