The Italian government now aims to float a 40% stake in Poste Italiane in October after delaying the IPO by a year due to uncertain financial markets.
Rome hopes to raise up to €4 billion from the sell-off and plans to use the proceeds to help reduce the country’s massive public debts.
According to diverse international media reports, the IPO prospectus could be filed by August 10, paving the way for a flotation on the Milan Stock Exchange in the second half of October.
The Financial Times reported today that the bulk of the offering will be targeted at institutional investors, and had received a positive response from US- and UK-based investors. Poste Italiane officials held talks with potential investors in London last week.
CEO Francesco Caio, a former Vodafone executive who took charge in May 2014, presented a five-year strategy last December combining higher investments and revenue growth with cost savings as Poste Italiane’s core ‘IPO story’. Key aims include €3 billion worth of investments and revenue growth to €30 billion by 2019.
Under the strategy, Poste Italiane will continue to focus on its current business areas of postal services, logistics and financial services, expand its parcels business in order to grow its B2C market share to more than 30%, and will also develop activities such as mobile phones.
At present the group generates the bulk of its revenues and profits from financial and insurance services, while the original core business of mail and parcel services remains relatively small in international comparison.
In 2014, group revenues increased by 9.1% to €28.5 billion but the operating profit dropped to €691 million from €1.4 billion the previous year, and net profits declined to €212 million from just over €1 billion, largely due to technical changes in provisions for insurance premiums.
Postal & Business Services, covering mostly mail and parcel services, saw revenues drop by 8.5% to just over €4 billion, which represented just 14% of total group revenues, resulting from falling mail volumes. The unit slumped to an overall €504 million loss compared to the previous year’s €300 million profit.
One bright spot was express parcel subsidiary SDA which increased external revenues by 6% to €395 million and volumes by 12.8% to 61 million parcels. The business had stable B2B domestic volumes, rising B2C volumes and a 22% rise in international parcels, benefitting from cooperation with partners UPS and Eurodis, according to the group’s annual report. SDA reduced its operating loss to €21 million from €27 million in 2013.
Financial services revenues fell fractionally to €5.3 billion but profit increased 15% to €766 million. Insurance premiums soared by 16.5% to €18.8 billion and the unit contributed stable profits of €415 million. Together, financial and insurance services now represent about 85% of Poste Italiane’s total revenues and had combined profits of just under €1.2 billion.
