Poste Italiane S p A : consolidating the Italian mail market

POSTE ITALIANE

CONSOLIDATING THE ITALIAN MAIL MARKET

Rome, November 16, 2020

EXECUTIVE SUMMARY

ACQUISITION OF NEXIVE, SECOND PLAYER IN THE ITALIAN MAIL MARKET, UNDER ART. 75 OF LAW DECREE N. 104

CONCENTRATION ENSURES LONG-TERM SUSTAINABILITY OF NATIONAL POSTAL SERVICE - EVEN MORE RELEVANT AFTER LOCKDOWN IMPACT

ITALY CONVERGING TOWARDS THE EUROPEAN STANDARD OF A NATIONAL CHAMPION - COMPARABLE TO THE MOST RECENT TRANSACTION IN THE NETHERLANDS

CONSOLIDATION WOULD ENSURE ECONOMIES OF SCALE, ENABLING THE IMPROVEMENT OF OVERALL SERVICE QUALITY OF THE MARKET, WHILE PRESERVING WORKFORCE LEVELS

PENDING FULFILMENT OF CERTAIN CONDITIONS AND OF THE PROCEDURE UNDER ART. 75 SIGNING AND CLOSING ARE EXPECTED BY END OF JANUARY 2021

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ART. 75 OF LAW DECREE N. 104 OF AUGUST 14, 20201

LAW PROVISION

SCOPE

PROCESS

• On August 14 the Italian Government passed a law decree bearing "Urgent measures to support employment and the economy"
• The law decree was converted into law on October 13, 2020
• Art 75 of the law decree allows certain concentrations which respond to relevant general interest of the national economy, regarding companies that:
• • operate in markets characterized by the presence of labor intensive services or of general economic interest
  • have recorded losses for the last three financial years
  • could cease their activity also as result of health emergency
• Art. 75 prescribes that such concentrations are deemed approved, with prior notification to the AGCM2 of measures to prevent the risks of burdensome effects for final users
• The AGCM, no later than 30 days from the notification, could prescribe further measures, also taking into account the overall sustainability of the concentration

Note: 1. Art. 75 of Law Decree n. 104 of August 14, 2020 and converted into law	on October 13, 2020 2. Refers to the Italian Competition Authority «Autorità Garante della	3
Concorrenza e del Mercato»

ACQUISITION OF NEXIVE - HIGHLIGHTS

CONSOLIDATION IN ITALY NECESSARY TO CREATE A SUSTAINABLE MAIL MARKET

• 7% HISTORIC YEARLY DECLINE, c.14% IN 2020
• • • EXPECTED c.400M VOLUMES LOST IN 2020
      BY POSTE ALSO DUE TO LOCKDOWN
  • ACCELERATED E-SUBSTITUTION

	POSTE ITALIANE UNIQUELY POSITIONED TO GUARANTEE	• SEIZE ECONOMIES OF SCALE
&	•	POWER TO INNOVATE
	A RELIABLE POSTAL SERVICE ACROSS ITALY

• LEVERAGING ON JOINT DELIVERY MODEL

ADVANTAGES FOR ALL STAKEHOLDERS: CLIENTS, EMPLOYEES, SHAREHOLDERS AND THE COUNTRY

• • PROVIDE RELIABLE SERVICE
  • • CREATE SUSTAINABLE VALUE
• PRESERVE WORKFORCE LEVELS

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ITALIAN MAIL MARKET: HIGHER FRAGMENTATION, LOWER VOLUMES AND COMPLEX TERRITORY

Mail per capita (#)

N. of postal operators

Volumes (#bn)

CAGR (2012-2019)

Market share (%, volumes)

Volumes (#bn)

MAIL MARKET (2019)

171	153	144	56	116	47
1,200	12	22	1,800	26	3,000

14.2	10.3	9.3
		2.6	2.0
		2.8
Germania		Spagna	Paesi Bassi	Italia

POSTAL OPERATORS (2019)

-3%	-4%	-5%	-6%	-9%	-7%
85%	99%	97%	97%	99%1	82%

12.1	10.2	9.1
		2.4	2.0	2.3
Deutche Post	Royal Mail	La Poste	PostNL

Source: Company information	5
Note: 1. Post acquisition of Sandd

ITALIAN MAIL MARKET: UNDERMINED BY SIGNIFICANT DROP IN MAIL VOLUMES ACCELERATED BY LOCKDOWN

AVG. YEARLY % MAIL VOLUME DECLINE/ GROWTH (CAGR 2013-2018)

																								+6%
							-4p.p.																+0%
																-3%	-3%	-3%	-3%	-3%	-3%	-2%
						-5%	-5%	-5%	-5%	-4%	-4%	-4%	-4%	-4%	-4%
				-6%	-6%
		-7%	-7%
	-8%
											Tot.
-9%
NETH	ITA	CZE	GRE	FRA PORT	LET	AUS	UNG	SVE	UK	IRL	POL	22	BEL	SPA	LIT	CIP	LUX	MAL	CRO	ROM	BUL	GER	FIN
countries

Source: European Commission

EUROPEAN YEARLY % MAIL VOLUME DECLINE/ GROWTH

10

0

-10

Survey respondent's estimation - letter mail

Actual mail volume trend

-20

-13%

-6%

-15%

-19%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

.

Source: Copenhagen Economics and UPU - Survey Principali Operatori Europei - Mnroli

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POSTE ITALIANE AND NEXIVE - 2019 KEY FIGURES

REVENUES

MAIL

VOLUMES

& MARKET SHARE1

PARCEL

VOLUMES

• MARKET SHARE EMPLOYEES

POSTE ITALIANE/

MAIL AND PARCELS

€3.5BN

2.7BN

82%

148M

22.8%

c.51,000

NEXIVE

c.€200M

c.0.35BN

12%

c.8M

1.2%

c.1,300

(+ c.5,000 delivery partners)

Note: 1. Excluding mass printing

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POSTE ITALIANE AND NEXIVE - TRANSACTION OVERVIEW

EXPECTED

TIMELINE

VALUATION

&

FUNDING

FINANCIAL

IMPACTS

• November 16: signature of Heads of Agreement and filing with AGCM under art. 75
• 30 days: AGCM deadline to potentially prescribe further measures
• By end of January 2021: expected signing and closing, subject to fulfilment of the relevant conditions and the procedure under art. 75
• Nexive valued at € 60m enterprise value with the support of Lincoln International
• Final price to be determined upon completion of the due diligence process
• Total consideration entirely funded by cash at hand
• Seize economies of scale
• Positive impact on expected timing of Mail, Parcel and Distribution breakeven

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APPENDIX

POSTNL AND SANDD

CONSOLIDATION OF MAIL MARKET IN THE NETHERLANDS

POSTNL AND SANDD1

+

		Employees	38,000	19,000		57,000
•	February 25, 2019:
Postal deliverers	18,000	16,000	34,000
	Deal announcement
•	October 1, 2019:
	Deal closing	Mail volumes	1,781m	720m		2,501
•	February 1, 2020:	Mail volumes
	Integration completed	75%	21%	96%
	Market share (%)2
		Domestic Mail	€1,678m	€201m		€1,879m
		Revenues

Source: Company data	10
Notes: 1. Company data as presented on February 25, 2019; 2. 2018 data

DISCLAIMER

This presentation contains certain forward-looking statements that reflect Poste Italiane's management's current views with respect to future events and financial and operational performance of the Company and of the Company's Group.

These forward-looking statements are made as of the date of this presentation and are based on current expectations, reasonable assumptions and projections about future events and are therefore subject to risks and uncertainties. Actual future results and performance may indeed differ materially from what expressed or implied in this presentation, due to any number of different factors, many of which are beyond the ability of Poste Italiane to foresee, control or precisely estimate, including, but not limited to, changes in the legislative and regulatory framework, market developments and price fluctuations.

Forward-looking statements contained herein are not a guarantee of future performance and you are therefore cautioned not to place undue reliance thereon.

This presentation does not constitute a recommendation regarding the securities of the Company; it does not contain an offer to sell or a solicitation of any offer to buy any securities issued by Poste Italiane or any of its Group companies or other forms of financial assets, products or services.

Except as may be required by applicable law, Poste Italiane denies any intention or obligation to update or revise any forward-looking statements contained herein to reflect

events or circumstances after the date of this presentation.

Numbers in the presentation may not add up only due to roundings.

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