Poste Italiane — Interim / Quarterly Report 2017

Nov 9, 2017

9 November 2017

Investor Relations

OPENING REMARKS: KEY NUMBERS

: SEGMENTS HIGHLIGHTS 9M 2017

1. Net of intersegment revenues

2. Including other segments (Poste Mobile)

TOTAL COLLECTED ASSETS

FOCUS ON FINANCIAL SERVICES REVENUES OVERVIEW

FOCUS ON FINANCIAL SERVICES CURRENT ACCOUNTS

• 1. Including current accounts, time deposits and repurchase agreements
• 1. Average yield calculated as interest income and realized capital gains on total average financial assets

FOCUS ON FINANCIAL SERVICES POSTAL SAVINGS

(€m)

AVERAGE POSTAL FEES FROM POSTAL SAVINGS COLLECTION

	9M 2016	9M 2017	Var.	Var. %
Fees (€m)	1,174	1,172	-2	-0.2%

Enlarged product offering: 3 year Postal Saving Bonds re-launched on 29 May 2017

TRANSACTION BANKING - VOLUMES

g n ri ui q c A & s d r a C
y e s, n er nt o sf M e m n & a y Tr a k P n a B

		9M 2016	9M 2017	Var.	Var. %
Pre-Paid cards
# of cards	(m)	15.9	17.4	+1.6	+9.9%
Transaction Value	(€m)	5,756	7,583	+1,827	+31.7%
Debit Cards
# of cards	(m)	7.0	7.1	+0.1	+1.3%
Transaction Value	(€m)	8,246	8,829	+582	+7.1%
Credit Cards
# of cards	(m)	0.46	0.49	+0.03	+6.5%
Transaction Value	(€m)	761	820	+59	+7.2%
Acquiring
# POS	(m)	0.09	0.10	+0.02	+18.6%
Transaction Value	(€m)	8,700	9,100	+400	+4.6%
Payment Slips
# of payments	(m)	299.6	288.5	-11.1	-3.7%
Bank & Money Transfer

TRANSACTION BANKING - REVENUES

TRANSACTION BANKING DIGITALIZATION PROGRESS

BANCOPOSTA REGULATORY FRAMEWORK AND CAPITAL POSITION

1. 10.50% Min. CET1 ratio required to distribute earnings (transitionally reduced to 9.25% in 2017)

2. ROE defined as net earnings/CET 1 capital (excluding valuation reserves)

FOCUS ON INSURANCE & ASSET MANAGEMENT KEY METRICS

9M 2016 9M 2017 Var. Var. % LIFE 806 952 +146 +18.1% Subscription fees 317 317 +1 +0.2% Management fees 489 635 +146 +29.8% PRIVATE PENSION PLANS 95 48 -47 -49.9% Subscription fees 15 17 +2 +12.8% Management fees 25 30 +6 +23.5% P&C 43 54 +11 +25.3% Technical Margin 43 54 +11 +25.3% ASSET MANAGEMENT 43 65 +22 +50.0% Subscription fees 3 10 +7 +202.6% Management fees 40 54 +15 +36.8% TOTAL COSTS -551 -563 -11 +2.1% EBIT Insurance & AM Services 436 556 +120 +27.5% 1 Other Incomes2 55 0 -55 -100.0%

1. Life includes Class I, III, IV and V

(€m)

1. Extraordinary income determined by applying IFRS accounting principles, as opposed to the separate managed accounts that apply Italian accounting principles

FOCUS ON INSURANCE & ASSET MANAGEMENT

GROUP GROSS WRITTEN PREMIUM

FOCUS ON INSURANCE & ASSET MANAGEMENT

LIFE PREMIUMS NET INFLOWS

(€bn)

Solid net inflows despite a year with a large number of maturities of Class III policies

FOCUS ON INSURANCE & ASSET MANAGEMENT

TECHNICAL RESERVES EVOLUTION

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

2. 1. Class I Avg. portfolio rating: BBB
3. 1. The figure only includes DPL (Deferred Policy Holder Liabilities)

FOCUS ON INSURANCE & ASSET MANAGEMENT ASSET MANAGEMENT

AVERAGE NUMBER OF PRODUCTS HELD BY RETAIL CUSTOMERS

Stable growth of the retail customers cross-selling KPI

Investor Relations 17

FOCUS ON MAIL & PARCELS TOTAL REVENUES & OPERATING PROFIT

FOCUS ON MAIL & PARCELS VOLUMES AND MARKET PRICE

100 103 9M 2016 9M 2017

B2C volumes increase the only reason for lower average price Defending mail revenues: volumes decline partially compensated by prices increase

AVERAGE PRICE INDEX – MAIL AVERAGE PRICE INDEX – PARCELS

100	94
9M 2016	9M 2017

Successful Strategy in Parcels: outperforming market growth.

1. Net of Unaddressed Mail Volumes

TOTAL GROUP OPERATING COSTS EVOLUTION

(€m)

Strong discipline in cost management

TOTAL GROUP OPERATING COSTS FOCUS ON LABOUR COSTS

FROM GROUP EBIT TO NET INCOME 9M 2017

(€m) Alitalia Write off EBIT Net Financial Income (Loss) Taxes Net income 1,176 (69) (383) 724 34,6% Tax rate

Net Income penalized by an extraordinary write-off

GROUP CAPITAL EXPENDITURES

CAPEX EVOLUTION (€m)

CAPEX BREAKDOWN BY CATEGORY (%)

Investor Relations 23

INDUSTRIAL NET FINANCIAL POSITION

CLOSING REMARKS

OUR FOCUS NOW

APPENDIX

€m	9M 2016	9M 2017	Var.	Var.%
Revenue from sales and services	6,406	6,279	(127)	(2.0%)
Insurance premium revenue	15,388	16,389	1,001	6.5%
Other income from financial and insurance activities	3,887	3,538	(349)	(9.0%)
Other operating income	47	47	(0)	(0.5%)
Sales	25,729	26,254	525	2.0%
Personnel costs	(4,333)	(4,241)	92	(2.1%)
Other operating expenses	(2,312)	(2,507)	(196)	8.5%
Net change in technical provisions for insurance business and other claims expenses	(17,449)	(17,916)	(467)	2.7%
Depreciation & amortization	(439)	(413)	27	(6.1%)
EBIT	1,196	1,176	(19)	(1.6%)
Net interest income / (Expense)	21	(70)	(91)	(428.6%)
Profit before tax	1,217	1,107	(110)	(9.1%)
Tax	(410)	(383)	27	(6.6%)
Net income	807	724	(83)	(10.3%)

€m	FY 2016	9M 2017	Var.	Var.%
Cash & Equivalents	3,902	5,227	1,325	34.0%
BancoPosta related Cash	2,494	3,148	654	26.2%
Receivables & Inventory	2,073	2,059	(14)	(0.7%)
Financial Assets	174,362	182,546	8,184	4.7%
Tangible and Intangible Assets	2,649	2,518	(131)	(4.9%)
Other	5,005	5,704	699	14.0%
Non-current assets and groups of assets held for sale	2,720	55	(2,665)	(98.0%)
Total Assets	193,205	201,257	8,052	4.2%
Trade Payables	1,506	1,323	(183)	(12.2%)
Financial liabilities	60,921	64,925	4,004	6.6%
Technical Reserves	113,678	120,613	6,935	6.1%
Other	6,906	6,640	(266)	(3.9%)
Liabilities related to assets held for sale	2,060	18	(2,042)	(99.1%)
Total Liabilities	185,071	193,519	8,448	4.6%
Shareholders capital	1,306	1,306	0	-
Reserves	6,828	6,432	(396)	(5.8%)
Totale Equity	8,134	7,738	(396)	(4.9%)
Total Liabilities & Equity	193,205	201,257	8,052	4.2%

€m	9M 2016	9M 2017	Var.	Var.%
Net income	807	724	(83)	(10.3%)
Depreciation and amortization	439	413	(26)	(5.9%)
Net provisions for risks and charges	150	313	163	108.7%
(Use of Provisions for risks and charges)	(383)	(471)	(88)	23.0%
Net change in employee termination benefits and pension plans	(65)	(84)	(19)	29.2%
(Gains) / Losses on disposals	1	(2)	(3)	n.m.
Other	38	43	5	13.2%
FFO	987	936	(51)	(5.2%)
Change in w orking capital	(115)	(340)	(225)	n.m.
Effect related to net assets held for sale	0	7	7	n.m.
Cash flow from operations	872	603	(269)	(30.8%)
Capital expenditures	(252)	(283)	(31)	12.3%
Net change in subsidiaries and associates	0	(284)	(284)	n.m.
Disposals	7	3	(4)	(57.1%)
BDM-MCC Disposal	0	612	612	n.m.
Cash flow from investments	(245)	48	293	n.m.
Dividend paid	(444)	(509)	(65)	14.6%
Cash Flow from financial assets and liabilities	(952)	1,183	2,135	n.m.
Cash flow from financing	(1,396)	674	2,070	n.m.
Net change in cash	(769)	1,325	2,094	n.m.

€m	FY 2016	9M 2017	Var.	Var.%
Working Capital
Trade receivables	2,172	2,205	33	1.5%
Inventories	137	136	(1)	(0.7%)
Other receivables and assets	3,671	3,876	205	5.6%
Current tax receivables	15	193	178	n.m.
Trade payables	(1,506)	(1,323)	183	(12.2%)
Other liabilities	(3,218)	(3,206)	12	(0.4%)
Current tax liabilities	(88)	(323)	(235)	n.m.
Working Capital	1,183	1,558	375	31.7%
Deferred tax asset	799	775	(24)	(3.0%)
Deferred tax liabilities	(746)	(526)	220	(29.5%)
Working Capital and deferred taxes	1,236	1,807	571	46.2%

€m	9M 2016	9M 2017	Var.	Var.%
Trade receivables	20	(33)	(53)	n.m.
Inventories	(3)	1	4	n.m.
Other receivables and assets	(389)	(205)	184	(47.3%)
Current tax receivables	(108)	(178)	(70)	64.8%
Trade payables	(121)	(183)	(62)	51.2%
Other liabilities	125	(12)	(137)	n.m.
Current tax liabilities	301	235	(66)	(21.9%)
Deferred tax assets	(27)	24	51	n.m.
Deferred tax liabilities	(250)	(220)	30	(12.0%)
Total Change in Working capital and deferred taxes	(452)	(571)	(119)	26.3%
Financial Income on discounted receivables	5	7	2	40.0%
Net w rite-dow ns and loss on receivables	(23)	(31)	(8)	n.m.
Deferred tax on fair value changes and TFR actuarial income	355	255	(100)	(28.2%)
Adjustments (non monetary items and shareholders' transactions)	337	231	(106)	(31.5%)
Change in Working Capital and deferred taxes as per cash flow statement	(115)	(340)	(225)	n.m.

€m

Total Assets	10,336	Totale Equity and Liabilities	10,336
Total Current assets	4,795	Total Current liabilities	5,843
Cash and cash equivalents	1,822
Financial assets	295	Financial liabilities	2,310
Other receivables and assets	482	Other liabilities	1,571
Current tax assets	173	Current tax liabilities	132
Trade receivables	1,889	Trade payables	1,212
Inventories	134	Provisions for risks and charges	618
Total Non-current assets	5,541	Total Non-current liabilities	1,831
Other receivables and assets	130
Deferred tax assets	365	Other liabilities	67
Trade receivables	5	Defered tax liabilities	26
Financial assets	840	Financial liabilities	288
Investments*	1,782	Employee termination benefits and pension plans	1,218
Intangible assets	411	Provisions for risks and charges	232
Investment property	53
Property, plant and equipment	1,955	Totale Equity	2,662

Assets Equity and Liabilities

Totale Equity	2,662
Provisions for risks and charges	232
Employee termination benefits and pension plans	1,218
Financial liabilities	288
Defered tax liabilities	26
Other liabilities	6

Total Non-current liabilities	1,831
Provisions for risks and charges	618
Trade payables	1,212
Current tax liabilities	132
Other liabilities	1,571
Financial liabilities	2,310

Total Current liabilities	15.843
Totale Equity and Liabilities	10.336

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

MAIL & PARCELS AND OTHER SERVICES NET DEBT BREAKDOWN 9M 2017

€m	FY 2016	9M 2017	Var.	Var.%
Cash and Cash Equivalents	(1,577)	(1,833)	(256)	16.2%
Current Financial Assets	(63)	(277)	(214)	n.m.
Short term debt	2	200	198	n.m.
Current part of long term debt	14	757	743	n.m.
Other current financial liabilities	22	74	52	n.m.
Current Financial Position	38	1,031	993	n.m.
Current Net Financial Position	(1,602)	(1,079)	523	(32.6%)
Long term debt	400	200	(200)	(50.0%)
Bonds	798	49	(749)	(93.9%)
Other non current financial liabilities	50	40	(10)	(20.0%)
Non Current Financial Position	1,248	289	(959)	(76.8%)
Net Financial Position	(354)	(790)	(436)	n.m.
Non current financial assets	(651)	(590)	61	(9.4%)
Net Financial Position - Mail & Parcel and Other Services	(1,005)	(1,380)	(375)	37.3%
Intersegment financial receivables	(522)	(269)	253	(48.5%)
Intersegment financial payables	634	1,232	598	94.3%
Net Financial Position (net of intersegments) *	(893)	(417)	476	(53.3%)

* Including a Net Financial Position of Other Services (€ -58m for the first 9 months of 2017 and € -48m in 2016)

€m	9M 2016	9M 2017	Var.	Var.%
Total revenue	4,520	4,420	(101)	(2.2%)
o/w Market revenue	4,107	3,981	(126)	(3.1%)
o/w Intercompany revenue	413	439	26	6.2%
Personnel costs	(92)	(86)	(6)	(4.8%)
Other operating expenses	(3,725)	(3,728)	3	0.1%
EBITDA	705	606	(99)	(14.1%)
EBITDA margin	15.6%	13.7%	-1.9%
Depreciation and amortisation	(0.9)	(0.6)	(0.3)	n.m.
EBIT	704	605	(99)	(14.1%)
EBIT margin	15.6%	13.7%

€m	9M 2016	9M 2017	Var.	Var.%
Total revenue	18,725	19,458	733	3.9%
o/w Market revenue	18,724	19,458	733	3.9%
o/w Intercompany revenue	0	0	0	20.7%
Personnel costs	(29)	(30)	1	2.8%
Other operating expenses	(18,250)	(18,859)	609	3.3%
EBITDA	446	569	124	27.7%
EBITDA margin	2.4%	2.9%	0.5%
Depreciation and amortisation	(10)	(13)	3	31.1%
EBIT	436	556	120	27.5%
EBIT margin	2.3%	2.9%

€m	9M 2016	9M 2017	Var.	Var.%
Total revenue	6,257	6,106	(151)	(2.4%)
o/w Market revenue	2,728	2,660	(68)	(2.5%)
o/w Intercompany revenue	3,529	3,446	(83)	(2.4%)
Personnel costs	(4,200)	(4,113)	(87)	(2.1%)
Other operating expenses	(1,617)	(1,617)	(0)	0.0%
EBITDA	439	376	(63)	(14.3%)
EBITDA margin	7.0%	6.2%	-0.9%
Depreciation and amortisation	(404)	(382)	(22)	(5.4%)
EBIT	35	(6)	(41)	n.m.
EBIT margin	0.6%	-0.1%

€m	9M2016	9M2017	Var.%
P&L
Total revenue	207	172	(17.1%)
o/w Market revenue	169	154	(8.5%)
o/w Intercompany revenue	38	17	(55.2%)
Personnel costs	(14)	(12)	(15.2%)
Other operating expenses	(149)	(123)	(17.7%)
EBITDA	44	37	(15.8%)
EBITDA margin	21.4%	21.8%
Depreciation and amortisation	(24)	(17)	(29.6%)
EBIT	21	21	0.0%
EBIT margin	10.0%	12.1%
Non-operating income/(expenses)	(1)	(1)	(34.0%)
Profit before taxes	20	20	1.5%
Taxes	(7)	(6)	(19.8%)
Profit after taxes	13	14	13.7%

€m	9M2016	9M2017	Var.%
Cash flow statement
FFO	34.9	31.0	(11.2%)
Cash flow from investments	21.2	(20.2)	(195.5%)
Net change in cash	(6.7)	(11.0)	(63.6%)
1 Other key data
Average number of users (sim cards -#k)	3,632	3,658	0.7%
ARPU (€) 1	4.8	4.3	(9.3%)

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

(€m)

	Mail & Parcels Including Network	Financial Services	Insurance and Asset Management	Poste Italiane Group2
Market Revenues	2,660	3,981	19,458	26,253
Intersegment Revenues	3,446	439	-	-
Totale Revenues	6,106	4,420	19,458	26,253
Personnel Costs	(4,113)	(87)	(30)	(4,241)
Other operating costs1	(1,954)	(311)	(530)	(2,920)
Net change in Technical Provisions	-	-	(17,916)	(17,916)
Intersegment Costs	(46)	(3,417)	(426)	-
Operating Costs	(6,112)	(3,815)	(18,902)	(25,077)
Operating Profit (Loss)	(6)	605	556	1.176

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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