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Poste Italiane targets expansion in financial services, more than €1B in profits

Poste Italiane SpA unveiled a five-year strategic plan that includes achieving a compound annual growth rate of 13% in net profit to about €1.2 billion in 2022 from about €700 million in 2017.

The Italian postal service's four core areas of activity are mail and parcel, mobile and digital payments, financial services and insurance services.

Under the plan, the group said it aims to boost its operating profit by 10% annually to €1.8 billion in 2022, with improved contributions from all segments. Between 2018 and 2022, the group expects CapEx of €2.8 billion supporting digitalization and automation, while its net financial position is expected to increase to €1.7 billion in 2022 from €800 million in 2017.

Poste Italiane also intends to expand its wealth management offer, widen its property and casualty product range, as well as introduce products designed for small and medium-sized enterprises. The group aims to achieve gross written premiums amounting to €20.7 billion, with a consolidation in life products and growth in P&C and private pension plans.

The company also expects an average headcount reduction of 3,000 per year over the course of its strategic plan, offset by hiring some 10,000 new employees, half of whom will specialize in financial services and insurance.

Poste Italiane added that it will pay a dividend of 42 cents per share for 2017 and increase the payout by 5% per annum until 2020. The company will aim for a minimum payout ratio of 60% from 2021 onward.

"The dividend will grow over the plan period in line with the improvement of the profitability of the group," CEO Matteo Del Fante said.