Market Positioning as of FY-23 figures
Poste Italiane is a platform company, which through its unrivalled physical and digital presence, offers integrated services and customer-oriented solutions within the areas of mail and logistics, as well as financial, insurance and digital payments services.
With more than 160-year history, approximately 13 thousand post offices, 119 thousand employees, total financial assets of 581 billion euros, and 35 million customers, with more than 23 million daily interactions the Group is a strategic pillar for the country in terms of size, reputation, reach, and customer loyalty, making a major contribution to Italy's economic, social, and productive landscape.
It is the market leader in mail with 93% market share in mail business (r. #1). In parcel and logistics business the market share is 13%.
In the Insurance sector, Poste Italiane is the market leader with 18% market share in life insurance (r. #2) and 13% market share in the overall insurance market (r. #2).
In the cards and payments sector, with 30M cards issued and 27M active cards (27% market share) and 12M digital wallets, Poste Italiane is the market leader in Italy.
Corporate Divisions
Poste Italiane is the leading postal service provider in Italy, appointed by the Ministero dello Sviluppo Economico to provide the Universal Postal Service - a public utility service aimed at guaranteeing to all citizens throughout the country access to postal services.
Through a proprietary multichannel logistics distribution platform, through its Joint Delivery Model Poste Italiane complemented the traditional mail delivery business with parcels delivery in order to exploit the rapid increase in e-commerce, immediately positioning itself as the leader in this market.
MARKET CONTEXT & POSTE ITALIANE POSITIONING
The postal services market is going through a phase of radical change, primarily linked to the digital and logistics transformation, which has influenced the volume of letters and parcels. The secular decline in traditional mail, replaced with digital forms of communication is accompanied by a significant increase in parcels volume.
The parcel sector, after its exponential increase in the pandemic years, experienced a period of uncertainty in 2023 that did not, however, affect the value of the market. E-Commerce confirmed as the key driver of growth in the parcels segment, mainly for low-value items.
| Parcel Volume (#m) | ||||
| CAGR 12-23 | CAGR 19-23 | DELTA 12-23 | DELTA 19-23 | |
| Poste Italiane | 15% | 15% | 383% | 73% |
| Austrian Post | 17% | 11% | 467% | 53% |
| Bpost | 18% | 20% | 491% | 108% |
| Deutsche Post | 6% | 5% | 81% | 24% |
| Post NL | 10% | 5% | 186% | 21% |
| Royal Mail | 4% | 3% | 52% | 11% |
| CTT Correios | 14% | 28% | 337% | 165% |
| Postnord | 7% | 9% | 117% | 40% |
| Average | 11% | 12% | 264% | 62% |
Below you can find comparisons with European postal operators on mail volumes operating data
| Mail Volume (#m) | ||||
| CAGR 12-23 | CAGR 19-23 | DELTA 12-23 | DELTA 19-23 | |
| Poste Italiane | (5%) | (4%) | (44%) | (16%) |
| Austrian Post | (5%) | (7%) | (42%) | (24%) |
| Bpost | (6%) | (8%) | (51%) | (28%) |
| Deutsche Post | (4%) | (4%) | (36%) | (15%) |
| Post NL | (6%) | 0% | (49%) | 0% |
| Royal Mail | (6%) | (9%) | (51%) | (31%) |
| CTT Correios | (7%) | (9%) | (56%) | (32%) |
| Postnord | (9%) | (11%) | (65%) | (37%) |
| Average | (6%) | (6%) | (49%) | (23%) |
BancoPosta is one of Italy’s biggest financial service providers, constantly expanding its range of services.
By law, it does not engage in direct lending activity. Its main activities include the management of the banking book, consisting of public and private customer deposits and relative lending activities; promotion and management of the postal savings instruments issued by Cassa Depositi e Prestiti; promotion and distribution of financial products issued by third parties or other group divisions, such as units of open-ended mutual funds established by BancoPosta Fondi SGR, asset administration products, Poste Vita and Poste Assicura insurance policies, third-party financing products and credit cards.
MARKET CONTEXT & POSTE ITALIANE POSITIONING
In 2023, the equity market began strong in January due to less aggressive central bank policies, but this momentum waned in February as central banks took a tougher stance on inflation. March saw increased tensions in the European banking sector, notably with the collapse of Silicon Valley Bank, the bankruptcy of Signature Bank, and Credit Suisse's crisis. Despite these issues, a strong response from monetary authorities and higher investor risk appetite led to solid stock market performance.
The credit market experienced a tightening of spreads early in the year, which reversed in March due to the banking crisis, leading to widened spreads, especially in the banking sector. Over the summer, corporate markets in Europe and the US faced rising rates and wider spreads, particularly in the High Yield segment. However, from October onwards, the market saw a period of lowering rates, resulting in strong performances, with the Investment Grade index rising by 7.4% in Europe.
Italian government bonds (BTP) started the year with high rates and spreads but saw a narrowing trend early on, with the 10-year BTP yield falling to 3.75% by mid-January and the BTP-Bund spread narrowing to 170 bps. This trend continued into the second quarter but reversed in the third quarter due to central bank actions. By year-end, the 10-year BTP yield declined to 3.7%, and the BTP-Bund spread narrowed to 165 bps, supported by expectations of less restrictive monetary policies in 2024 and positive ratings on Italian debt.
At the end of December 2023, customer deposits in Italian banks, including current accounts, certificates of deposit, and repurchase agreements from resident customers, as well as bonds, decreased by 1.5% annually to approximately €2,028 billion, a decline of €31 billion compared to the previous year. This decrease was driven by a significant reduction of €71 billion (-3.8% year-on-year) in deposits from resident customers, partially offset by a €40 billion increase (+19.1% year-on-year) in bond deposits.
The average cost of bank funding, which includes returns on deposits, bonds, and repos from households and non-financial companies, rose to around 1.16% in December 2023, up from 0.61% at the end of 2022.
Bank loans to Italian residents, including the private sector and general government (net of repos with central counterparties), amounted to approximately €1,670 billion in December 2023, a year-on-year decrease of 3.9%. Loans to households and non-financial companies totalled €1,296 billion, reflecting a 2.2% annual decline. This reduction in loan volumes aligns with a slowdown in economic growth, which has dampened the demand for loans, resulting in a 2.2% year-on-year decrease in loans to businesses and households.
In this context, Poste Italiane's market share, thanks to its territorial presence, rose to 39% (+0.9 p.p. vs FY-22). This is true across all types of municipalities, particularly in small municipalities with less than 15,000 inhabitants.
Looking at market asset management (+5.8% vs FY-22), there was a growth in portfolio management (+4.3% vs FY-22), Collective asset management (+7.1% vs FY-22), and open-ended investment funds alone (+6.9% vs FY-22). Within the open-end fund segment, Poste Italiane's market share was 13% in 2023.
In the assets under administration segment, Poste Italiane has a market share of 27% in 2023.
Poste Italiane operates in the insurance business through Poste Vita, a leading life insurance company in Italy. Poste Vita additionally offers investment and savings products, promoted through the Group’s distribution platform.
Through Poste Assicura, a subsidiary of Poste Vita, Poste Italiane offers several products in the casualty insurance space.
Recently Poste Italiane launched initiatives aimed at meeting the new needs expressed by customers in the areas of protection, welfare and healthcare by offering increasingly modular health and prevention products.
MARKET CONTEXT & POSTE ITALIANE POSITIONING
In 2023, the market was influenced by ongoing uncertainties from the war in Ukraine, the Israeli-Palestinian conflict, and persistently high levels of inflation and interest rates, although these rates slowed compared to the beginning of the year.
The life insurance segment experienced negative net inflows of -€22.8 billion, a significant drop of about €40 billion compared to the positive €16 billion in 2022. This decline was due to a 3.2% drop in premiums, mainly affecting Class III life products, and a 45% increase in outflows, largely from higher lapses in Class I life policies, driven by savers seeking higher returns amid rising rates. The lapse rate increased to 10.63% from 6.71% in 2022.
New individual life insurance policies totalled approximately €74.2 billion at the end of 2023, a 3.3% decrease from 2022. Including EU company premiums, the total was €82.5 billion, down 5.2% from the previous year.
- Class I premiums, making up 76% of the total, amounted to €56.3 billion, up 11.9% from the previous year.
- Class III products (unit-linked) totalled €14.8 billion, a 37.5% decrease from 2022.
- Capitalisation products, though minor, were €0.8 billion, down 27.6% from 2022.
- Long-term health policies (Class IV) saw limited volumes of €111 million, up 30.6% from 2022.
- Pension fund contributions were €2.2 billion, up 39.8% from 2022.
- Single premiums were the dominant payment form, comprising 95.2% of total premiums and 60.6% of policies by number.
Distribution channels showed varied performances:
- Banks and post offices brokered 64.7% of new business, with premium revenue of €48 billion, a 1.3% decrease from 2022.
- The agency channel saw new business volumes reach €15.7 billion, up 1.1% from the previous year, representing 21.1% of total brokered business.
- Qualified financial consultants handled €9.5 billion, down 15% from 2022, making up 12.8% of total brokered premiums.
- The broker and distance sales channel declined 29.6% from 2022, with premiums of €1 billion, or 1.4% of the total brokered.
Poste Vita leads the Italian life insurance market by size and prestige. It is the number two insurance group in the overall market (life and casualty insurance) in Italy.
In this context, life premiums for Poste Italiane grew 4% YoY, posting a market share of 18%.
The P&C insurance market in Italy saw total direct premiums of €31.2 billion by the end of Q3-23, a 7.5% increase from the same period in 2022, driven by growth in both the Non-Motor (+8%) and Motor (+7%) sectors.
The Non-Motor sector saw contributions from various classes: Health insurance (+13.3%), Personal injuries (+4.3%), General TPL (+7.3%), Other damage to property (+7.7%), and Fire and natural elements (+9.1%), with Credit and Legal Assistance classes also growing by 14.4% and 7.6%, respectively.
Within this segments, Poste Italiane ranks in the top 15 insurance companies in Italy with total premiums posting a growth of 2% in 2022.
Poste Italiane goal is to consolidate leadership in the payment system market by steering the shift from traditional payment methods (such as postal payment slips) to next-generation digital options, in particular the development of PostePay.
Poste Italiane played a pioneering role in the electronic money market in Italy. Postepay was launched in 2003 and by the end of 2017 had 17.7 million users, becoming the prepaid card of choice for Italians today. Postepay Evolution, the personal prepaid and reloadable card with an IBAN now stands at 10 million cards now in use. Long at the forefront of the digital payments sector, the Postepay App unlocks access to numerous features, including real-time fund transfers and a new payment method for online purchases.
In particular, thanks to Postepay Connect, the offer that combines the card Postepay Evolution and the PosteMobile SIM, all customers can therefore manage payment and telephone services quickly and intuitively thanks to the App.
Poste Italiane operates also in fixed line & mobile phone service businesses through Payments and Mobile division and in 2023 it has entered in the energy market.
MARKET CONTEXT & POSTE ITALIANE POSITIONING
The Italian digital payments market is historically less evolved than that of other European countries (in Italy the number of digital transactions per capita is well below the European average). With the pandemic crisis, new payment habits have been consolidated and this trend seems to be reversing.
In September 2023, the Italian payment cards market saw domestic transactions surpass €322 billion, a 17.8% increase from September 2022, driven by inflation. Transactions grew by 23.2% to 7.2 billion, with notable growth in debit cards (+22%) and credit cards (+36%). The number of active cards rose slightly to 93.8 million. The mobile telephony market showed a slight increase in Human-to-Human SIMs, with MVNOs gaining market share. The energy market experienced a price rebalancing due to mild winter temperatures and diversified gas supplies, leading to lower gas and electricity prices by the end of 2023.
In this context, Payments & Mobile revenues for the full year grew a remarkable 28%, reaching over 1.4 billion in 2023. Card payments revenues continue to grow double-digit by 23% in 2023 to 717 million.
Overall, at the end of 2023, Poste Italiane's market share in the Italian cards transactions’ market is 19% (64% in the prepaid card market).
