Poste Italiane

Earnings Release • May 10, 2018

POSTE ITALIANE 1Q 2018 FINANCIAL RESULTS

Rome, May 10, 2018

EXECUTIVE SUMMARY

BUSINESS REVIEW

CLOSING REMARKS

APPENDIX

Net profit at 485m, +38% YoY

Deliver 2022 key initiatives already under way

Increased focus on commercial distribution across our network

Cost control under way delivering base in line with five year target

	1Q 2017	1Q 2018	Var.	Var. %
REVENUE	2,833	2,884	+51	+1.8%
EBIT EBIT Margin %	526 18.6%	703 24.4%	+177 +5.8pp	+33.7%
EBIT Net of Capital Gains	129	325
NET PROFIT EPS (€/share)	351 0.27	485 0.37	+134 +0.10	+38.2%

REVENUES INCREASING Group revenues up, mix in line with Deliver 2022 projections

OPERATING PROFITABILITY SUPPORTED BY COST CONTROL

EBIT up, mainly supported by Mail, Parcel & Distribution

DELIVER 2022 – PROGRESS UPDATE

All business units focusing on Deliver 2022 implementation

MAIL, PARCEL AND DISTRIBUTION KEY INITIATIVES

Deliver 2022 execution update

• Execution started April 16th
• 71 delivery centres implemented the new model (around 300 to be reorganized in 2018)
• More than 500 municipalities already reorganized
• Efficiency and flexibility improved in line with targets
• Execution on track with plan, no significant issues

Reduced labour cost - Increased flexibility - Improved service level

	Large Metro areas (8% of pop., 600 daily items/ km2)		Urban areas (68% of pop., 80 daily items/ km2)	Rural/ regulated areas (24% of pop., 10 daily items/ km2)
•	Daily morning delivery (standard mail)	•	Alternate day morning • delivery (standard mail)	Alternate day delivery
•	Daily additional afternoon delivery (parcels and registered)	•	Daily additional afternoon delivery (parcels and registered)
•	delivery Weekend	•	delivery Weekend

JOINT DELIVERY MODEL REDUCED NUMBER OF REGIONS

Rationalization of territorial areas

Branch optimization to reduce overlap in medium and large cities

No changes to small cities1 coverage

1 Cities with < 5,000 inhabitants

FOCUS ON DISTRIBUTION AGREEMENT WITH INTESA SANPAOLO

New agreement signed, as part of Deliver 2022 execution

1. Proximity bank 100% owned by ISP; 2. Asset Manager 100% owned by ISP

EXECUTIVE SUMMARY

BUSINESS REVIEW

CLOSING REMARKS

APPENDIX

MAIL, PARCEL & DISTRIBUTION ONGOING REFOCUS

Segment revenues slightly down, EBIT up thanks to lower costs

€ m unless otherwise stated

• Reduced decrease of Mail revenues to -2% YoY
• Parcel revenues up YoY, gradual improvement expected going forward
• Operating profitability strongly progressing, underpinned by lower costs

• Parcel Revenues +4% YoY including international packets accounted in Mail business

• Includes Philately, Patenti Via Poste, Poste Motori, Mistral Airlines and other revenues; 2. Includes income received from Other Segments in return for use of the distribution network and Corporate Services; 3. Excludes net capital gains on investment portfolio for 321 €/m in 1Q 2017 and 306 €/m in 1Q 2018

MAIL, PARCEL & DISTRIBUTION ONGOING REFOCUS

Gradual shift from mail to parcels, with mix effects on prices

KEY HIGHLIGHTS

• Mail volumes decrease mainly related to lower margins products (e.g. direct marketing), while average prices increase thanks to positive volume mix
• Parcel volumes up 11.3% including e-commerce international packets accounted in Mail; mail volumes -3.4% excluding international packets

• Parcel volumes boosted by positive trends of e-commerce, average prices down reflecting the changing volume mix from C2C/B2B to B2C

• Includes: Multichannel services, Editorial services and Postel volumes

• Includes: International parcels and partnership with other logistic operators

FINANCIAL SERVICES IMPROVING IN LINE WITH PLAN

Revenues and operating profitability up benefitting from new postal saving agreement

€ m unless otherwise stated

KEY HIGHLIGHTS

• Highly resilient interest income
• Robust growth of postal saving revenues (+27% YoY)
• Loan & mortgage distribution revenues up, considering both the change in accounting rules and the MCC-BdM disposal

• Continuous growth in Asset under Management with less reliance on upfront fees

• Includes revenues from electronic money services, fees for collection and payment services; 2. Includes also revenues from custody accounts, credit cards, MCC-BdM (25 €/m in 1Q 2017) and other revenues from distribution of third parties products; 3. Gross capital gains netted by minus 24 €/m in 1Q 2018. Reported total segment revenues in 1Q 2018 equal to 1,519 €/m

GROUP TOTAL FINANCIAL ASSETS CONTINUED INCREASE

Strong net inflows driven by life insurance, deposits and mutual funds

€ bn unless otherwise stated

KEY HIGHLIGHTS

• Total financial assets increased by 17bn YoY thanks to all products
• Strong positive net inflows of 4.4bn in 1Q 2018:
• Postal savings negative net inflows significantly improving to -2.6bn, thanks to new commercial initiatives, while maintaining positive inflows for all other products
• Insurance products 3.1bn of which 0.2bn unit linked and multiasset Class III
• Deposits 3.7bn

• Mutual funds 0.1bn

• Deposits do not include Repo and Poste Italiane liquidity

STRONG WEALTH MANAGEMENT PLATFORM

Increasing TFA from affluent & private customers

€ bn unless otherwise stated

1. Private: TFA>500 €/K; Affluent: TFA between 75 €/K and 500 €/K or selected prospects with TFA <75 €/K; Lower Mass: monoproduct clients with less than 2.5 €/K, excluding current account holders; Mass: remaining retail clients;

2. Includes TFA from non retail Clients and non-Client-driven TFA

POSTAL SAVINGS IMPROVING, IN LINE WITH PLAN

Successful new products based on new remuneration scheme

€ m unless otherwise stated

1. Average postal savings reported according to the remuneration scheme agreed with CDP, which excludes interests accrued year-to-date and based on a maturity of postal saving books adjusted for an estimate of potential early redemptions;

2. Yearly target agreed with CDP until 2020

CURRENT ACCOUNTS AVERAGE VOLUMES AT A SOUND 57.8BN

Strong deposits growth stabilizing interest income despite lower yields

€ m unless otherwise stated

1. Including current accounts, time deposits and repurchase agreements; 2. Entirely invested in floating rate deposits c/o MEF; 3. Average yield calculated as interest income and realized capital gains on average total financial assets;

2. Figures refers to last trading day of the quarter

ASSET MANAGEMENT AND LOAN & MORTGAGE DISTRIBUTION

Ongoing set up of new capabilities

€ m unless otherwise stated

1. Includes also revenues from custody accounts, credit cards and other revenues from distribution of third parties products, for a total of 5 €/m; 2. Adjusted revenues refers to the restatement of 1Q 2017 revenues according to the accounting principle IFRS 15 (adopted from 1Q 2018) and netted from MCC-BdM revenues for 25 €/m; 3. Include net inflows from unit linked and multiasset Class III insurance products

GROWTH IN PAYMENTS, MOBILE & DIGITAL

Improving trends across all business lines

€ m unless otherwise stated

KEY HIGHLIGHTS

• Strong growth in card payments, up 20% YoY, supported by increased stock of PostePay and higher transactions
• Other payments1 up 3% YoY thanks to mix effect

• Telecom revenues up 4% YoY, supported by increasing new products sales

• Includes payment slips 'bollettino', tax payments slips and money transfer

GROWTH IN PAYMENTS, MOBILE & DIGITAL

Positive trends of commercial KPIs across all business lines

1. An innovative electronic tool associated to a single customer, which is enabled through a mobile app to authorize payment transactions

POSTE ITALIANE DIGITAL PROPERTIES

Robust growth in digital use

REGISTERED ONLINE USERS STOCK

1. Source: App stores (iOS and Android); 2. Electronic identification refers to number of ID outstanding; 3. Digital system to monitor parcels' delivery

GROWTH IN CONSUMER FINANCIAL TRANSACTIONS

GROWTH IN TRACK&TRACE SEARCHES3

INSURANCE SERVICES RESILIENT OPERATING RESULTS

EBIT & net income on track with 2018 targets

€ m unless otherwise stated

KEY HIGHLIGHTS

• Resilient revenues despite lower gross written premiums, with P&C and private pension plan mitigating lower contributions from life insurance
• EBIT & net profit on track with 2018 targets

INSURANCE GROSS WRITTEN PREMIUMS CHANGING MIX

Strong focus on unit linked, pension plan and P&C, while maintaining leadership in segregated fund products

€ m unless otherwise stated

1. Includes Life Protection

SOLID GROWTH IN INSURANCE TECHNICAL RESERVES

Technical reserves increasing driven by positive net inflows on segregated fund products

€ m unless otherwise stated

1. Including non-life technical reserves and net of re-insurance reserves; 2. Includes Life Protection; 3. Figures refers to last trading day of the quarter

POSTEVITA GROUP: REGULATORY REQUIREMENTS

Solvency ratio up to 284% driven by higher own funds

GROUP COSTS DOWN THANKS TO ONGOING EFFICIENCY MEASURES

All ordinary items of costs down confirming the focus on cost discipline

€ m unless otherwise stated

1. Includes: Other expenses from financial activities, Capitalised costs and expenses, Other minor Operating Costs

2. Adjusted other operating costs are calculated excluding in 1Q 2017: 10 €/m from BdM-MCC costs, 7 €/m due to a reclassification of non operating cost under the new IAS18 and 6 €/m for real estate funds provisions

KEY HIGHLIGHTS

• HR costs down 3.4%, weight on revenues down to 50%
• Non HR operating costs down 9.2%, weight on revenues down to 26%
• Excluding non recurring items impacting 1Q 2017, non HR operating costs are down 7% YoY

HR COSTS POSITIVE TREND SUPPORTED BY LOWER FTE

Confirmed track record to manage reduction of headcounts

KEY HIGHLIGHTS

• Average FTE down by 2,200, including +3,000 fixed-term contract and 800 hirings
• Labor cost/FTE down thanks to one day less paid national holiday, one-off release and deconsolidation of BdM-MCC

• Labor cost/FTE broadly in line with 2018 targets of Deliver 2022

• Including about 300 average FTE related to BdM-MCC deconsolidation during 2017

MAIL, PARCEL & DISTRIBUTION NET FINANCIAL POSITION

Seasonal trend affecting net financial position

EXECUTIVE SUMMARY

BUSINESS REVIEW

CLOSING REMARKS

APPENDIX

Net profit increasing thanks to improved operating results

Commercial focus to sustain profitability

Cost discipline measures under way

Deliver 2022 on track, all business units focusing on the Plan

EXECUTIVE SUMMARY

BUSINESS REVIEW

CLOSING REMARKS

APPENDIX

BANCOPOSTA: AN ASSET GATHERER, WITH A LOW RISK BALANCE SHEET

Solid capital ratios including the already announced capital increase1

€ m unless otherwise stated

1. Capital increase of 210 €/m to be approved by the AGM on 29 May as already announced

2. 10.50% Min. CET1 ratio required to distribute earnings (transitionally reduced to 9.25% in 2017 and 9.875% in 2018)

€ m unless otherwise stated

1. Includes Life Protection

Net inflows from mutual funds, unit linked and multiasset Class III insurance products

€m	1Q 2017	1Q 2018	Var.	Var.%
Total revenues	2,833	2,884	51	2%
of which:
Mail, Parcel and Distribution	914	898	(16)	-2%
Payments, Mobile and Digital	130	143	13	10%
Financial Services	1,462	1,519	57	4%
Insurance Services	327	324	(3)	-1%
Total costs	2,307	2,181	(126)	-5%
of which:
Total personnel expenses	1,480	1,430	(50)	-3%
of which personnel expenses	1,478	1,424	(54)	-4%
of which early retirement incentives	2	6	4	n.m.
Other operating costs	685	619	(66)	-10%
Depreciation, amortisation and impairments	142	132	(10)	-7%
EBIT	526	703	177	34%
EBIT Margin	19%	24%
Finance income/(costs) and profit/(loss) on investments accounted for using the equity method	6	8	2	33%
Profit before tax	532	711	179	34%
Income tax expense	181	226	45	25%
Profit for the year	351	485	134	38%

€m	1Q 2017	1Q 2018	Var.	Var.%
Segment revenue	914	898	(16)	-2%
Intersegment revenue	1,334	1,369	35	3%
Total revenues	2,248	2,267	19	1%
Personnel expenses	1,432	1,390	(42)	-3%
of which personnel expenses	1,431	1,385	(46)	-3%
of which early retirement incentives	1	5	4	n.m.
Other operating costs	534	477	(57)	-11%
Intersegment costs	15	15	0	n.m.
Total costs	1,981	1,882	(99)	-5%
EBITDA	267	385	118	44%
Depreciation, amortisation and impairments	132	122	(10)	-8%
EBIT	135	263	128	95%
EBIT MARGIN	6%	12%
Finance income/(costs)	(8)	(8)	0	n.m.
Profit/(Loss) before tax	127	255	128	n.m.
Income tax expense	47	81	34	n.m.
Profit for the year	80	174	94	n.m.

€m	1Q 2017	1Q 2018	Var.	Var.%
Segment revenue	1,462	1,519	57	4%
Intersegment revenue	258	261	3	1%
Total revenues	1,720	1,780	60	3%
Personnel expenses	31	22	(9)	-29%
of which personnel expenses	30	21	(9)	-30%
of which early retirement incentives	1	1	0	n.m.
Other operating costs	90	81	(9)	-10%
Depreciation, amortisation and impairments	0	0	0	n.m.
Intersegment costs	1,408	1,438	30	2%
Total costs	1,529	1,541	12	1%
EBIT	191	239	48	25%
EBIT MARGIN	11%	13%
Finance income/(costs)	2	3	1	50%
Profit/(Loss) before tax	193	242	49	25%
Income tax expense	58	69	11	19%
Profit for the year	135	173	38	28%

€m	1Q 2017	1Q 2018	Var.	Var.%
Segment revenue	130	143	13	10%
Intersegment revenue	86	82	(4)	-5%
Total revenues	216	225	9	4%
Personnel expenses	8	8	0	n.m.
of which personnel expenses	8	8	0	n.m.
of which early retirement incentives	0	0	0	n.m.
Other operating costs	39	40	1	3%
Intersegment costs	108	114	6	6%
Total costs	155	162	7	5%
EBITDA	61	63	2	3%
Depreciation, amortisation and impairments	6	6	0	n.m.
EBIT	55	57	2	4%
EBIT MARGIN	25%	25%
Finance income/(costs)	0	1	1	n.m.
Profit/(Loss) before tax	55	58	3	5%
Income tax expense	16	15	(1)	-6%
Profit for the year	39	43	4	10%

€m	1Q 2017	1Q 2018	Var.	Var.%
Segment revenue	327	324	(3)	-1%
Intersegment revenue	0	0	0	n.m.
Total revenues	327	324	(3)	-1%
Personnel expenses	9	10	1	11%
of which personnel expenses	9	10	1	11%
of which early retirement incentives	0	0	0	n.m.
Other operating costs	22	21	(1)	-5%
Depreciation, amortisation and impairments	4	4	0	n.m.
Intersegment costs	147	145	(2)	-1%
Total costs	182	180	(2)	-1%
EBIT	145	144	(1)	-1%
EBIT MARGIN	44%	44%
Finance income/(costs)	12	12	0	n.m.
Profit/(Loss) before tax	157	156	(1)	-1%
Income tax expense	60	61	1	n.m.
Profit for the year	97	95	(2)	-2%

OPERATIONAL KPI's		1Q 2017	1Q 2018	∆% YoY
MAIL PARCELS & DISTRIBUTION	Mail Volumes (#m) Parcels delivered by mailmen(#m) Parcel Volumes (#m) B2C Revenues (€m)	838 6.4 27.6 53.6	813 10.1 29.1 63.5	-3.0% +57.8% +5.4% 18.5%
PAYMENTS, MOBILE & DIGITAL	Postepay cards of which Postepay Evolution cards (#m) Total payment cards transactions (#bn) of which eCommerce transactions (#m) PosteMobile new products (#m) Digital e-Wallets (#m)	16.4 3.7 0.21 39.7 0.289 0.9	18.4 5.1 0.27 49.7 0.291 2.0	+12.6% +38.2% +24.8% +25.4% +0.9% +117.7%
FINANCIAL SERVICES	Total Financial Assets - TFAs (€/bn) Product Sales (# mln) Fees per client¹ (€) Unrealized gains (€m)	497 1.9 54 953	514 2.2 57 2,789	+3.3% +15.8% +5.6%
INSURANCE SERVICES	Gross Written Premiums (€m) GWP – Life (€m) GWP - Private Pension Plan (€m) GWP - P&C (€m)	5,935 5,637 258 40	5,336 5,015 272 48	-10.1% -11.0% +5.5% 21.3%

1. Segment revenue financial + insurance, excluding interest income, per client, excluding lower mass segment

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.