Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Poste Italiane SpA (PITAF, Financial) reported record nine-month revenues of 9.2 billion euros, up 5% year-on-year, demonstrating strong financial performance.
- Net profits increased by 19% on an underlying basis, reaching 1.6 billion euros, showcasing effective cost management and profitability.
- The company upgraded its full-year 2024 adjusted EBIT guidance to 2.8 billion euros, with a net profit guidance of 2 billion euros, indicating confidence in future performance.
- Parcel volumes grew robustly by 24% in both the quarter and the nine months, reflecting strong market position and customer trust.
- The interim dividend increased by 39% from last year, amounting to 33 cents per share, highlighting the company's commitment to rewarding shareholders.
Negative Points
- Mail volumes declined by 7% in the quarter, indicating ongoing challenges in the traditional mail segment.
- Non-HR costs increased by 7% to 3.2 billion euros in the nine months, driven by higher business volumes and inflationary impacts.
- The lapse rate in the life insurance business remains high at around 7%, which could impact future profitability.
- The reduction in average parcel tariffs due to a mix effect could pressure margins despite volume growth.
- There is uncertainty regarding the potential placement by the main shareholder, which could affect market perceptions and stock performance.
Q & A Highlights
Q: The NII has remained stable in the third quarter. What can we expect going forward, considering the refixing of hedges in September at different rates? Also, can you provide an outlook for 2025 in terms of macro trends, challenges, and opportunities?
A: (Matteo Del Fante, CEO) We are guiding investors to a minimum net profit of EUR 2 billion for 2024. For 2025, we are optimistic due to strong commercial trends. The NII is expected to remain resilient, as we have embedded assumptions of lower interest rates in our 2025 plans. We are managing inflationary pressures effectively, and our cost base is mainly driven by volumes.
Q: Mail and parcel trends seem better than expected. Can you provide some color on average pricing and volume trends? Also, any comments on the potential placement by your main shareholder?
A: (Matteo Del Fante, CEO) We have no visibility on the placement. Regarding mail and parcel, the business has performed better than expected, leading to a guidance upgrade. We've seen volume stickiness in recorded mail and integrated services, with systematic price increases contributing to our performance.
Q: What are your expectations for the life business, considering the current lapse rates and profitability of new business?
A: (Camillo Greco, CFO) We are in a better position than three months ago, with positive net inflows in the third quarter. We expect another quarter of positive net inflows. Profitability remains in line with our plans, despite some promotions.
Q: Can you update us on the rollout of the Polis project and its impact on traffic and cross-selling potential?
A: (Matteo Del Fante, CEO) We have over 3,000 offices active, serving 23,000 clients for passport renewals. While cross-selling data is not our focus, the project is more about providing a public service. We expect it to be close to break-even in the future.
Q: With the decrease in interest rates, how do you see your financial services and insurance operations benefiting in the next couple of years?
A: (Matteo Del Fante, CEO) We agree that the rate environment will benefit our operations. Our insurance and postal savings are well-positioned, and our financial services unit has a positive outlook in a stable to declining interest rate environment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
