Poste Italiane S.p.A. (PST) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us today. I'm Massimiliano Riggi, Chief Investor Relations. On behalf of Poste Italiane's management team, it is my pleasure to welcome you to our full year 2022 results and 2023 strategy update. Today, we have a big agenda, shown on the screen. But also I apologize -- we apologize for the inconvenience on the [indiscernible] anticipated. After a short video highlighting Poste Italiane achievements since 2017, we will start with a strategic update from our CEO and General Manager, Matteo Del Fante; then, our CFO, Camillo Greco, who will take you through the key financials. We will also hear from Andrea Novelli, Poste Vita CEO for a focus on insurance. You will then have the opportunity to ask questions after Matteo's closing remarks, either by phone or through our webcast platform. Before we start, I'll ask you to view the general screen, which is also included in the presentation pack on our website, where you can also find a separate presentation covering Q4 and full year 2022 results. And now let's watch a 6-minute video, summing up a 6-year transformational journey. [Presentation]

Ladies and gentlemen, welcome. It is a privilege to be talking to you and summarizing a great set of results today. Our 2022 EBIT up EUR 2.3 billion is a record high, more than doubling the 2017 level of EUR 1.1 billion, when we started our journey and up 24% compared to last year. The impressive progression is fully supported by positive underlying contribution from all businesses. Confident of our consistent delivery since 2017, today, we can confirm our 2023 growth path. Our targets have always been achieved in different market conditions, highlighting the validity of our strategic choices and tactical cost management. Let me also say that the business trends that we've seen in Q1 this year are increasing visibility on our 2023 guidance. As promised, we have stabilized the total ratio volatility supported by healthy capital generation. From 2017 to the end of 2023, we will have distributed almost EUR 5 billion of dividends to our shareholders. In particular, we're proposing to increase the dividend to EUR 0.65 per share in 2022, setting an all-time record and 50% higher than 2017. The new 2022 EPS is up 10% year-on-year, and we're targeting EUR 0.71 in 2023, corresponding to an average payout of almost 50% between 2022 and 2023. With this in mind, we have drawn a visible base line for the new strategic plan we will be presenting later this year. On Slide 7, let's go back to February 2018, when we started our transformation journey. At the time, with the first plant since the 2017 new sales of Poste Italiane, we were targeting a significant EBIT improvement, up from EUR 1.1 billion in 2017 to EUR 1.8 billion in 2022. As we always told the market, we say what we do and we do what we say. Fast-forward 6 year to today on Slide 8, and you can now witness the success of our transformation and a different organization, a platform company, which has been more than double in profitability with an EBIT up EUR 2.3 billion in 2022, given a combination of a significant increase in the quality and amount of revenues and continuous costs that we do. All of this has been achieved in a challenging environment of pandemic markets and energy crisis. As you can see, our strategy to balance a tightly controlled costs with investment for growth payouts, and that will allow us to share achievements with all stakeholders. Moving to Slide 9. Since 2017, we have worked on transforming Poste from a traditional logistic operator into a cutting-edge omnichannel platform company. We are an integrated distribution platform, meeting daily needs of almost 35 million Italians. Digitalization, customer experience enhancement and improvement in workforce efficiencies are the cornerstone of our transformation strategy. In mail, parcel and distribution, we transition from a delivery company into a parcel business to then starting to become a fully fledged logistic operator. Network restructuring, modernization of existing infrastructure and development of new state-of-the-art logistic hubs were the key enablers. With that into the expanding e-commerce market, focusing on shopper needs by building an extensive pickup and drop-off networks and invested in parcel sorting automation. In financial services, we have redefined our commercial offer to meet all our client needs from lending, savings, investments and insurance. The payment business is a gateway to the Poste ecosystem remains at the core of our group omnichannel strategy with a compelling offer meeting many customer needs. We did this segment from scratch, and we have doubled its EBIT. Our continued focus on investment in the digital payment sector enable us to capture value from e-commerce market group. Let me just remind you that this business didn't exist 6 years ago. Yet today, it has a turnover of EUR 1.3 billion. After the successful integrated Telco offer, we have completed our product portfolio by launching a retail gas and electricity business offer, which in [ 4 ] months achieved more than 150,000 contracts, well on track to exceed 300,000 contracts by year-end. In Insurance Services, we built a fully fledged and resilient company. Our life offer was broadened to improve the multiclass products. We have integrated a comprehensive P&C insurance offer in our investment proposition. On Slide 10, we see a set of strategic KPIs, which represent the transformation we've been talking about. On Slide 11, you see how we have repositioned our profitability towards growing markets and recurring revenues. An evolution has taken place really. In the last 6 years, we managed events that were beyond our control, such as the pandemic, the war, the market adjustment and the energy crisis, but we remain focused on the things we could control. The journey we made is not just one of quantity but let me say is also quality. We identified businesses with structurally growing trend, which allow us to more than compensate the declining trends in others. As a result, recurring revenues now represent more than 50% of the total, increasing 8% from 2017. On Slide 12, our M&A activity has been designed to accelerate the implementation of the group business strategy. We approach -- I mean that the business unit identified key partners to enrich our core competencies in order to drive and accelerate growth. In this slide, we sum up the key acquisitions, covering all our business units as well as the technology enablers. As an example, in payments, we acquired LIS, a paytech champion to boost our group omnichannel strategy, which will enable a significant evolution of our service model. Moving to Slide 13, we show the evolution of our service model becoming truly omnichannel. This transformation has been enabled by our state-of-the-art IT platform. The EUR 2.8 billion in the transaction, which we analyzed through data mining are boosted by the key capability we show on the right of the chart. We have integrated almost 600 API partners and 36% of customer interactions are through AI and 86% of our new initiatives are cloud-based. Leveraging on more than 20 million daily interactions across our platform, we have expanded the scope of the engagement of our customers. Historically, this channel was in charge of engagement as well as transactions and sales. We see this in the blue arrows in the chart. Now we have expanded our engagement across the distribution channels. So for example, the digital or the proof of customer engagement can be completed, the re-transaction and sales in our post office as you can see from the yellow arrows. And all these happen with the aim of a seamless customer experience, and there is even more to come in this space. Stay tuned. Moving to Slide 14. I would like to provide you with some further impressive figures on our omnichannel platform evolution. We've built an ecosystem, which leverages on our customer base, even more digitalized and active both on physical channels and new channels with a satisfying experience. As you can see now, 20% of total construction are digital, 5x our 2017 penetration. Our clients indeed are becoming more digital. 60 million Italians use our digital properties compared to 12 million just a couple of years ago. Nearly 26 million Italians choose us as their official digital identity provider, that's almost half of all the Italian population. We are very proud to be contributing so much to the digitalization of the country. At the same time, customer satisfaction increased 8 percentage points from 22% in 2017 to 30% in 2022, with our app rating increasing to 4.6 out of 5. Moving to Slide 15, please. People are the key transformation driver. And I'm proud that our corporate culture is vibrant and modern. After -- here we are, after 5 years, of course, we're all getting older obviously, but our people are 2 years younger. In 5 years, in fact, the average age of our employees has fallen from almost 50 to under 48 years. More importantly, we have almost doubled the number of employees with a university degree. Our people are the key enabler of our transformation program. We support a diverse, equal and inclusive culture that promotes the commitment of employees and ambitious potential. We have consistently invested in recruitment, training and development as well as resourcing some activities in order to upskill and reskill our existing workforce. So with the right capabilities and behaviors to support the delivery of our strategic ambitions. Moving to Slide 16. We are progressing on our green strategy. We have reduced our CO2 emissions in line with our midterm target of minus 30% total CO2 emissions by 2025 and carbon neutrality by 2030. Just a couple of examples. At the end of December, the number of low-emission postini vehicles was around 23,000. The development of our PuntoPoste network has allowed us not only to provide more flexible parcel pickup and dropoff solutions, but also to reduce the number of kilometers traveled by almost 0.5 million. The real estate management program is also supporting our CO2 reduction plan with around 1,600 buildings included in energy utilization projects and 31,000 square meters of solar panel installed since the beginning of the year. The Polis project, which is part of the national recovery and resilience plan related to the next-generation EU program will provide a further contribution to the execution of our green transition strategy. Shortly, 200 at various post offices will be open to the public. Let's now look ahead. On our 2023 strategy update in the context of the new capital clients. On Slide 18, we are providing a new 2023 guidance, which is now targeting an EBIT of EUR 2.5 billion, confirming our steady road map, successfully managing inflationary headwinds. We are confident in our ability to deliver healthy profitability. And as such, we have increased the dividend for 2022 and 2023. Later in the year, with the new strategic plan and medium-term dividend policy, we would also [indiscernible]. Revenues will continue to steadily increase excluding the impact of the new IFRS 17 accounting standard on insurance services, but this will only impact reported revenues, while EBIT will not be affected. Camillo will go deeper into detail to discuss the regional growth drivers. Moving to Slide 19. We are aware of the challenges ahead, but we have a proven track record to adapt to a changing environment, and we have a clear visibility on 2023 targets. As we enter 2023, with a subdued economic growth that we will leverage on secular trends rather than cyclical ones, taking advantage of growing markets. This is the case of our partial payments and insurance businesses, which are all structurally underpenetrated compared to European averages. Our client focus is on nondiscretionary spending for daily needs, which is shielding us from the negative impact of the potential economic slowdown. The Polis initiative previously mentioned will contribute to our business diversification. The integration of public administration services. So we enable cross-selling opportunities as well as support our service model transformation in the future. Given the inflationary backdrop, we have protected the business with several tactical moves, which give us a full visibility on cost base evolution in 2023. Our corporate energy costs are, in fact, now mostly hedged for the whole year. The labor agreement will be in place until December this year, and our track record in cost management keeps us in good shape. Finally, we are well gathered from continuous market volatility. In particular, we have stabilized our Solvency II ratio. Our loyal customer base rewards us with positive net inflows. For example, since January this year, we have already registered almost 2 billion insurance being closed with the best in market 4% up trade -- we benefit from a fortress balance sheet and ample liquidity with reliability coverage ratio at 359% in financial services and a structurally prudent asset liability management, protecting assets from the current market volatility. It is not by chance that during the last 20 years, we have been experiencing a steady increase of our deposit base in any adverse environment as we are seen as a safe harbor for Italian retail investors. Okay. On Slide 20, let's focus on new channels, which now account for 69% of total interactions, representing a great value generation potential for transactions and more importantly for revenues. Moving forward, it is also evident how the share of transactions such as [indiscernible] currently managed on our new channels has been growing reaching 50% in 2022, mainly thanks to the new Punte Poste network. Finally, we see new channel generating 22% of 2022 relevant revenues, increasing 3x versus 2017. As you can see on Slide 21, the relevance of our ESG part has been recognized. Since 2017, we've been included in key indices and ratings, and we've been more than doubling our value of our brand. The several awards received are just icing on the cake. With Polis Poste Italiane has confirmed definition as a strategic pillar for Italy, promoting the social cohesion of local communities and will become a new way of accessing public administration services. Around 7,000 post offices located in small municipality would be transformed into digital and physical hubs providing a wide range of public administration services, simplifying lives of Italians. At the same time, post offices will be renovated, supporting income transition towards a low carbon economy. In the next couple of slides, we will review the key divisional messages. On Slide 23, we have a summary of expected growth drivers for each division, which we're going to discuss in the following slides, coupled with a clear visibility of the cost base for 2023. What we have done to reduce the Solvency II ratio volatility will allow us to increase Poste Vita limiters to the parent to up to 75% from 2023. I hope that you appreciate the consistent improvement of steady and sustainable cash flow generation across all business units. Let's look in more detail on the divisional drivers of 2023. Let's start with mail and parcel on Slide 24. We have built an excellence in our B2C business, on which we are leveraging to develop a more diversified parcel business. At the same time, we are looking beyond developing specific activities to become a fully fledged logistic operator. We expect the key growth drivers of 2023 for this business to rely on B2C volumes with a particular traction from our PUDO network, which we expect will represent 15% of the B2C volumes from only 5% in 2020. In a market where volumes can be redirected to competitors, very quickly we have successfully reached a long-term agreement with key partners securing visibility on 40% of revenues in 2023. Finally, we expect our logistics revenues to increase by 50% next year, including this year, including warehousing, end-to-end logistics and contribution from specialized sectors, such as health logistics. Moving to Slide 25. It is great to flag the partnership with Amazon on one side and DHL on the other. We have gained further visibility from the new Amazon contract for the next 5 years, key partners also for other areas of the group. In fact, let me remind you that Poste channels 30% of transaction on the Amazon marketplace and that we are an extensive user of cloud services by AWS. At the beginning of March, we signed a strategic international agreement for parcel delivery with DHL. For Poste, DHL is an ideal partner to best connect our customer to international markets with inbound and outbound delivery options as well as rollout of an advanced automated local network. Stack infrastructure were mainly an important stepping stone into the high-margin outbound international parcel market. Moving to Slide 26, please. On financial services, with a focus on postal savings. Thanks to the recently agreed revamped offer, we had gained visibility on higher distribution fees expected at EUR 1.7 billion in 2023. Since early 2022, the interest rate environment obviously changed. This has led to an increased retention rate from postal savings holders. Together with Tivity, we are launching new offers, putting postal savings back at the core of our commercial activities. These products are not exposed to market fluctuations and offer safe and competitive returns to retail investors. And remember that we do not bear the remuneration recognized to customers in our balance sheet because we act as distributor of total savings of products on behalf of CDP. As an example, since the end of 2022, we launched a new postal trading offer at 3% remuneration. We dedicate it to new liquidity, successfully posting new customer liquidity flows reaching EUR 1.8 billion as of today. On Slide 27, you can see how since the launch of the payment and mobile business unit 5 years ago, a remarkable growth has been achieved, and we expect this to continue into 2023. The business captures most of the cross-selling opportunity, arising daily during customer interaction. It is the one-stop shop for many needs of Italians, further to set now by the LIS, Punto Poste acquisition. This success has been built also leveraging on a rapid increase of transactions, an impressive growth of over 30% in account transaction value to EUR 71 million since 2018 with this trend expected to continue into 2023 to over EUR 81 billion. To complete our product range. We launched a new gas and energy retail offer. We have already reached over 150,000 contracts paving the way to achieving a target of more than 300,000 contracts in 2023. Business setup costs in 2023 will result in over EUR 50 million negative EBIT, fully offset by the strong growth of the overall segment. Our goal is to implement a low-risk business model. Our energy business organizing monthly way, allowing us to match demand and supply without being exposed to material market price fluctuations. On Slide 28, insurance, we have a focus by Andrea Novelli [indiscernible]. Let me only highlight that in 2023, the life business will continue to drive a steady increase in the profitability of profit product mix, and we'll also be accelerating our protection business, leveraging on our life customer base as well as the proposed life insurance acquisition. Andrea will also discuss the IFRS 17 accounting changes in place since January 1, that will have a neutral to positive impact on our P&L. At the same time, we are recognizing a significant amount of contractual service margin, CSM, which reflects the value of our in-force business, giving us visibility on a sustainable profitability stream going forward. Finally, we are bridging the gap towards internal model implementation with EUR 1 billion gross mass lapse insurance with the benefit of 30 percentage points of solvency, net levering our service exposure. Also as a result of a more stable solvency ratio, we are confident in increasing the remittance trade from Poste Vita to the parent company to up to 75% starting from 2023. Okay. That's it from me for the time being. Let me hand over to Camillo Greco, our Group CFO. Over to you, Camillo.

Thank you, Matteo. Good morning, everyone. Let's start on Slide #30. As you can see from the chart, we have overachieved all our key targets for 2022. Looking forward, we are guiding 2023 revenues towards EUR 11.9 billion with a major EBIT step up to EUR 2.5 billion. Our healthy profitability, gives us the confidence to propose a DPS of EUR 0.65 in 2022 and EUR 0.71 in 2023. Turning to Slide #31. As we are working on a new plan, we are carrying out a comprehensive assessment of key moving parts. In this way, we have a clean sheet to grasp for the future. So 2022 baseline EBIT is more representative of our expected trajectory in 2023 and beyond. More in detail. We have recognized lower commercial incentives and every retirement charges compared to our original plan. We also received 20 million subsidies, which we adjust for to assess energy costs in 2023. Positive market effect from inflation-linked bonds supported insurance investment margin, coupled with the release of other reserves and IFRS 17 implementation. This resulted in a positive benefit of EUR 167 million. The net effect of the provisions related to many several single items, resulting in a negative impact on EBIT for EUR 41 million. Finally, we took a prudent approach for tax credits where the regulatory framework is still evolving. On the back of event analysis, we took a conservative stance with a one-off noncash provision of EUR 320 million to cover the risk of EUR 9 billion outstanding, increasing relativity going forward. So the baseline EBITDA corporate center level for 2022 is equal to EUR 2.36 million, around EUR 17 million above reported EBIT and ahead of the guidance communicated in Q3. On slide #33, from the data EBIT we described the key moving parts to the operating profit for 2023 at EUR 2.5 million, with all businesses contributing positively and more than offsetting headwinds from inflation and Poste Energy business setup costs. Let's now turn to the financial results and 2023 targets for each business segment. Let's look at the mail, parcel and distribution on Slide #33. In 2022, mail revenues were resilient with repricing actions offsetting secular trends. Faster revenues recovered quarter-by-quarter, reaching last year's level. Our 2023 target is achievable against the challenging backdrop. Structural mail decline is here to stay, but we are planning to mitigate it with the tariff increases after revenues are set to recover and the new Amazon agreement is supportive of this trend with healthy volumes registered since January. On Slide #34, we look at the drivers of mail, parcel and distribution profitability, starting from the patent EBIT of negative EUR 70 billion in 2022, we expect 2023 EBIT to land to around negative EUR 100 million in a challenging market environment. This includes about EUR 100 million expected early retirement charges. As the revenue increase, we will compensate a decline, hard distribution revenues, remunerating commercial efforts will offset cost inflation, including energy cost increase. Moving to Slide #35 of financial services. 2022 revenues increased on the back of net interest income in a rising interest rate environment. Our revenue target for 2023 is set to EUR 5.9 billion, mostly driven by recurring revenue components such as NII and cost of saving distribution fees. We expect the upward trajectory of net interest income to bolt in, in 2023, abate the flattering most reviewed to cost of funding for corporates, rebates and public administration. While taking advantage of market conditions last year, we already locked in EUR 0.2 billion from active portfolio management. Nevertheless, during 2023, we will assess any potential opportunity to redeploy again supporting NII going forward. Postal savings will be back at the core of our product suite as we revamped commercial asset [indiscernible]. We expect fees of EUR 1.7 billion in 2023, up EUR 100 million compared to 2022. In 2023, we expect operating profit to remain rather stable, affected by higher intersegment costs, remunerating an enhanced distribution network. Moving to Slide 36. We have a good visibility and NII evolution going forward to around EUR 2.2 billion for 2023. Volumes are expected stable throughout the year, and higher interest rates will support a rising interest income. However, interest expenses mostly related to public administration and corporate would absorb part of the benefit. An upward parallel shift of 100 basis points in the interest rate curve will provide an additional 7 basis points on the portfolio yield as a result of our business hedging in place in 2023. Moving to Slide 37, TFAs. At the end of 2022, TFAs amounted to EUR 562 billion, down EUR 24 billion since December last year, most impacted by market effect from our interest rates. Reported net inflows were negative EUR 500 million in 2022, mostly [indiscernible] postal savings, but the amount was positive EUR 2.7 billion once we exclude one-offs and other volatile components. Looking at each item, total savings negative growth amounted to EUR 11.1 billion, mitigated a positive EUR 5 billion market effect and have been improving since H2 '22 than for revamped commercial offer. Net debt reverse benefited from a positive net inflow of EUR 7.6 billion, a performance well ahead of market trends supported by compelling product mix, adapting to market conditions. Deposits and others grew by EUR 2.8 billion driven by sticky retail deposit. Lastly, there were positive net inflows in savings and investments, supported by insurance products and mutual funds above EUR 7 billion. As a reminder, 93% of our customers' TFA are held in capital guaranteed and liquidity products. On Slide #38, you can see the payments and mobile business has performed particularly well with all product lines explain strong revenue growth and driving exposure to fast-growing payments market in Italy. Revenues and operating profit are in fact double since 2017 with strong contribution from payments and increasing Telco revenues. This is evidence of the strength of our brand and the trust of our customers. In 2022, revenues totaled EUR 1.32 billion pro forma for the consolidation of risk for the full year for the fair comparison versus 2023. The new energy business will contribute EUR 0.2 billion of revenues, benefiting from a strong commercial momentum with over 3,000 contracts sold daily. Overall, we expect revenues up to EUR 1.7 billion in 2023, and EBIT to growth of EUR 0.4 billion, more than offsetting the structural decline in retardation of payments and EUR 0.1 billion grant due to the energy setup costs. Moving to Slide 39 on insurance. We had a strong 2022 with total revenues increasing by 7%, nearing EUR 2 billion net of baseline adjustments. In the right business, the investment margin increase, benefiting from higher volumes, also supported by inflation-linked bonds. The P&C business benefited from higher gross retail premiums across all product lines and improving profitability. EBIT increased 6%, reaching a record-high level since 2017. Looking forward to 2023, higher volumes and margins will be driving underlying profitability with EBIT increasing to around EUR 1.4 billion. As mentioned, we target profitable growth of our production business, accelerated by the potential acquisition of net insurance. The revenue target next year will be at EUR 1.6 billion, which is comparable to similar amount on a like-for-like basis under IFRS 17, revenues and costs directly attributable to insurance policy were accounted for in the CSM. Therefore, upfront fees are no longer recognized as market revenue in the insurance segment because they are passed through the financial services. Let me hand over to Andrea Novelli, Poste Vita CEO. Andrea, please go ahead.

Thanks, Camillo, and good morning, everyone. Tapping on Slide 41. As you can see, post EBITDA inflows were positive in 2022 and actually outperformed the market, supporting constant growth in mathematical reserves. This positive trend is expected to be confirmed in 2023 despite difficult market conditions due to our capacity to adapt our product mix to a changing environment, as I will explain later on. As you can see on the right-hand side of this slide, average profitability steadily increased over the past years and expect it to continue growing on the back of higher margin multi-class and class 1 production. To put things into context, the management fees of new multi-class business are expected at around 150 basis points and on class 1 products at approximately 120 basis points, supporting the 2023 forecasted margin increase. In our product mix between Class 1 and multi-class products, we are adjusting our target balance to adapt to a completely different scenario. Our multi-class target mix of 60% within 2024 has been given being met ahead of schedule in 2021 with 58% in 2022 in a far more risk adverse environment, the share of multi-class was reduced to 44%. Going forward, in 2023, we will therefore retain flexibility to vary the share of multi-class products on gross written premiums leveraging the interest rate environment like the [ Karawan ], also on traditional class 1 products, which are both more sustainable for us and more attractive for our clients. Let me explain it with an example. On the bottom right of the slide, you can see that the return on allocated capital for Class 1 business is twice the 2020 figures, while for our customers, the benefit of holding class 1 products presents 1.5x that value for money. Slide 42 shows the sustainability of our life business over time. On the left-hand side of the slide, you can see that the declining trend in segregated fund return has finally reversed since 2021. At the same time, in 2022, the investment rate has started to rise again halting the erosion of the stock returns. Therefore, after about 10 years, we now expect reinvestments in 2023 to core at a higher rate than the underlying stock. Actually, the number you see on this slide might be considered quite conservative because we are currently investing above 3% and with an asset mix that is much more efficient in terms of capital charges compared to what we use to do even only 2 years ago. We are in fact investing in European high rated government bonds rather than in corporate and high-yield ones, and we have a limited exposure to alternatives, mainly in asset classes such as private debt and infrastructure with high protection from inflation and interest rate increase. We also took advantage of the extra return from inflationary bonds to optimize our investment portfolio. And finally, let me stress that the average minimum guaranteed rate is a bit low and further declining with a consequent margin increase between average yield and guaranteed rate in the past years. Turning to the right side of this slide. If we consider this data, market lapse rates are still relatively low despite an increase observing the past months. Our last rate has been moderately increasing as well, but around 4% is still indeed about half of market average. That being said, with the immediate real production level to date, we are currently slightly ahead of expectations, adding what reached EUR 2 billion at the end of last week. Let's move on to non-life business on Slide 43. Starting from the retail business. Let me remind you that our journey began in 2020 when we launched the simple modular offer to cover all personal lines with a single insurance contract. Since then, we have been increasing the coverage we provide for our clients, as shown by the relentless growth of average premium tickets. It is important for us in terms of P&L but even more so for our clients, as we always aim to ensure that we receive an appropriate service and compensation when they submit a claim. On top of that, we are now focusing on integrated investment and protection advisory. We tested a new platform in 2022, and we are rolling it out to cover all life investment products. Accordingly, the significant growth productivity, highlighted, as you can see by a doubling average daily production is coupled with margin incremental costs because it is associated with another product that we will get sold anyway. Moving on to health insurance on the bottom left chart of this slide, in 2022, we almost doubled [indiscernible] compared to 2020. This is the result of a fast growth in both retail health coverage within our modular offer and employee benefit business with evidence economies of scale. Indeed, if you expect that we are now handling twice as many gains per FTE. Turning to Slide 44. Solvency ratio has remained well above our managerial ambition despite volatile market conditions. Solvency II ratio was 253% at the end of last year, net of 3 percentage points of foreseeable dividends for a total of EUR 450 million dividend in 2022. Since last September, Solvency II ratio improved, thanks to a number of factors, including the positive net impact from the market, capital generation from the business and in force portfolio and as a consequence of certain risk coverage actions, I will tell you about more later on. Thanks to these factors, Poste Vita is now one of the best capitalized companies among the largest Italian insurers. Since the beginning of the year, thanks to more favorable market conditions, in particular, a lower B2B spread, the ratio is even higher between 260% and 275% as of March 28. On Slide 45, as you can see on the left-hand side and as already anticipated, solvency ratio remain stable through the cycle above our managerial ambition despite significant market volatility. Duration was stabilized also through proactive actions that we have taken over time to compensate unfavorable economic variances. Spread and interest rate activities and will significantly reduce through that portfolio diversification and an improvement of mix, also supported by favorable market condition. As a result of the above, we feel confident to adopt a new capital management framework, which will allow us to consider capital optimization actions when the solvency ratio is above our managerial ambition of 200% and is expected to be move well above such a target through the cycle based, of course, on our visibility. Within this framework, we expect an increase -- to increase with a ratio to the parent company to up to 75% in 2023 for dividends to be paid in 2024. On Slide 46, let's look at the regulatory mass lapse risk coverage where we have recently completed. Due to the sudden and significant increase in interest rates regulatory mass lapse risk has become by far the largest component of the solvency capital requirements of life insurance companies applying standard to [indiscernible]. To manage such risk, we signed a 3-year mass lapse insurance treaty with 5 medium [indiscernible] insurers for a total gross reduction of the mass lapse capital requirement of around EUR 1 billion, corresponding to a net reduction of total FCR of around EUR 0.6 billion. As a consequence of such coverage, our Solvency II ratio as of December 2022 benefited from 30 percentage points. The treaty shields mass lapse risk by partially covering Poste Vita from any capital losses that it might have to sustain should lapse rate over a 12-month rolling period become higher than a certain threshold up to a maximum lapse level. Given the strong appetite for the group's consistently low and below market average lapse rate, the transaction has proven to be extremely cost efficient. This 3-year treaty bridge the gap ahead of internal model implementation. Let's move now to Slide 47. As you know, starting from January this year, insurance companies have adopted IFRS 17. The first key message here on this transition is that the new accounting standard has no impact on cash flows, capital generation, dividends and Solvency II ratio of Poste Italiane. Transition to IFRS 17 actually allows us for a closer alignment with the principles underpinning Solvency II calculations. The second message is that shareholders' equity on transition is impacted by liabilities discounting the recognition of CSM and risk adjustment. In this respect, please remember that we have been applying IFRS 9 since 2018. Therefore, unlike other insurance companies that are adopting both IFRS 9 and 17 at the same time, our investment value remains unchanged. On transition, the CSM is EUR 11 billion, comprehensive equity defined as CSM net of tax, plus shareholder equity is EUR 12 billion. The stock of CSM reflects the net present value of future profits of the in-force portfolio. Its release over time is therefore going to be the main driver of profitability going forward. The total release ratio of CSM is expected in the range of 6% to 8%, in line with expected life of our in-force portfolio. Given that the majority of our business will be accounted for using the valuable fee approach, we expect lower intra-annual volatility of Life P&L. Whereas in [ long ] Life, generally speaking, the impact is limited. Overall, we therefore expect a neutral or slightly positive effect on the insurance business P&L and a strong improvement in terms of visibility of its embedded value. Thank you all on my side. And now back to Camillo for some comments on costs and shareholder equity.

Thanks, Andrea. Moving to Slide 49 on Human capital. In 2022, the number of FTEs decreased further, just shy of 120,000 people embedding record high hirings, which we plan also for 2023, to adapt our workforce to the business evolution. Net of M&A, FTEs will decrease by 1,000 in 2023. We see further efficiencies going forward, which will be assessed with the new strategic plan we are currently working on. Move to Slide 50, I want to discuss HR costs which show a remarkable achievement in 2017. Ordinary HR costs fell further year-on-year, reaching EUR 5.23 billion in 2022, confirming our efficiency, with HR cost on revenue down 10 percentage points in 2017 to 43%. Early retirement charges were below the 2022 target due to the reduced historical exit costs, which we continue to retain flexibility for the future with the total available funds of EUR 350 million at year-end 2022. 2023 HR costs are expected of EUR 5.5 billion on a like-for-like basis, while the implementation of IFRS 17 will result in a reduction of EUR 0.4 billion on a reported basis, which is in turn little bit level. The remainder 2023 cost per FTE already included pre-agreed salary increase. Finally, next year, we plan to book EUR 0.1 billion early retirement charges to support on growing transformation. On Slide 51, we look at non-HR costs. Total non-HR cost for 2022 are at EUR 3.79 billion, lower than the target of EUR 3.9 billion despite inflationary pressures. Over the plan, we estimated that the ratio between variable cost and related variable revenues, would steadily decrease from 77% in 2017 to 64% in 2022, anticipating the 2024 target. Non-HR costs for 2023 will be around EUR 4.4 billion with an increase related to business growth, change in perimeter with M&A, energy set-up costs and inflation. Turning to Slide 52. We continue to focus on key areas of investments to support the business growth to the tune of EUR 1 billion, including EUR 0.2 billion related to the Polis project. On the right side of the slide, you can see the key areas of focus and I'd like to point out that more than 70% of the initiatives and investments are ESG related. Finally, on Slide #53. In 2017, we have generated EUR 4.5 billion of capital, building a fortress balance sheet while being able to fund significant organic and inorganic growth as well as distributed EUR 4 billion in dividends. As a result, we have a shareholders' equity in excess of EUR 11 billion with an effective allocation ready support growth across business units. That's all from me. Now back to Matteo.

Thank you, Camillo. Let's move to Slide 55. Based on our performance, we are increasing our dividend for 2022 and 2023. On last year results, we proposed a dividend per share of EUR 0.65 compared to the original figure of EUR 0.63, an increase of 10% year-on-year. Furthermore, next year, we will increase the dividend to EUR 0.71, an increase of 9% year-on-year and 2 percent points higher than the previous guidance. This upgrade is not only driven by consistent financial performance in time, but also by an increased visibility of the cash flow generation across all businesses. As usual, we're committed to a credible and competitive dividend while confirming our interim policy, which envisages that the balance of 2022 dividend of EUR 0.44 dividend to be paid in June. Finally, let me conclude with some key messages. In the middle of macroeconomic and industry headwinds, we ended 2022 repositioning the business on a sustainable path. We've more than doubled EBIT to EUR 2.3 billion in 2022 from 2017, and the investment circulation is showing its results. We have a robust capital and liquidity positions. Looking ahead to 2023, we see supportive business trends and full clarity on concentration. Moreover, the results in so far in Q1, increased our confidence in the target set for 2023, which we see achievable under different market conditions. In particular, we are convinced that even in uncertain market scenario retaining that, so we continue to sit on the high seat safe harbor. And trusting us with the savings as they done over the past 150 years. The base line is in place for the new strategic plan. I would like to thank everyone who works in Poste Italiane, and our stakeholders for the trust that they have shown. Thank you for the time today and stay tuned. [Foreign Language] Let's now open the floor for the questions. Over to you, Massi.

Thank you, Matteo. So we are going to move to Q&A. And then I will read a few questions which have been submitted in the break time. For any topic in which you will not be covered if you're free to contact with the team as we will be very happy to come back to you as soon as possible. So the first question is from [indiscernible].

I have two question, the first one is on the deposits. I'm wondering if you have experienced any deposit outflow in the first quarter 2023. I'm wondering if you are increasing the remuneration of your deposit. And what is invested in the year 2023 guidance in terms of additional [ cost of deposits]. The second question is on dividend. I know that you are going to release your dividend during the year. After considering the last 10%, we have seen this year in terms of the share and 9% expected in 2023. I'm wondering if it makes sense, if you assume the dividend policy going forward, to see a 9%, 10% increase in the dividend per share per annum. And the third question is on the Mail & Parcel business, which reported an EBIT loss of EUR 326 million in 2022. But you can [ add to that ] EUR 253 million of negative one-offs. So it's already close to breakeven. My question is, when do you expect to reach the breakeven in Mail & Parcel and distribution?

Thank you [indiscernible] on the first question on deposits. If we can go back to Page 19 of our slide presentation for a second. Poste Italiane has always been perceived as a, let's say, [indiscernible] by Italian retails. So we went back over 20 years to look at the crisis that the retail savings world in Italy went through so beginning of the century, there were corporate defaults. And as you can see, our deposits increased significantly throughout the period because people gone for sale and what is the natural place to go. It was the same with the Lehman crisis of 2008, where we experienced being an increase. And again with the sovereign crisis of 2011, and throughout the world a significant increase. There was then a banking crisis in 2016, '17 related to some Northern Italian banks, and it was, again, a "positive experience" for our retail savings. More specifically on your question of Q1, we are comparing Q1 on a year-to-date basis with last year. So with Q1 2022, and we see almost EUR 4 billion increase on a quarter-over-quarter basis with basically all segments of our saving products outperforming last year. Trading deposits, Andrea mentioned, insurance and the margin also the asset management products. On increasing remuneration, I would like Camillo to go more into details, please.

Thank you. So first of all, we have indeed included in our projections, some cost of funding. There is a difference between cost of funding for retail customers, which is smaller in absolute amount as we have, on average, EUR 6,400 on our deposits and individuals who decide to open a cap deposit not for yield but because they like the offer, the efficiency of the offer and the cost associated to it. So I think that our view is that having remuneration on cash deposit is not key selling factor in the proposition. Would they want to do that, we can obviously offer them what is called the [ factors of the market ], which Matteo just discussed, which offers 3% to 3% year-year interest. So that is for retail customers. For instance, the Corporates and Public Administration, we have a higher cost of funding and the combined impact of the [ circa ] 0.3 in terms of Europe and in terms of [indiscernible]. And the absolute level is somewhere around 65 to 70 basis points on the overall yield for 2023, which basically means we have a yield of 3% gross and net yield of [ circa ] 2.3%, which makes the EUR 2.2 billion of NII projection with reflected [indiscernible].

On dividend, our dividend yield is in line with the market. We decided to increase by 10% for this year, 9% to guidance of 2023, mainly on the back of savings, capital and upstream dividend flows from all our business units. Specifically, I think what you have seen on PosteVita. So our decision to potentially increase from 50% to 75%, the payout that give us comfort on this increase. Going forward, which was really your question, we will have a new plan later on this year, with the new board and the signal we did today will be considered in defining the new plan, which will take obviously also the dividend policy input. On Mail & Parcel, given again to Camillo.

Yes. So indeed, there is a vicious trajectory in terms of evolution of Mail & Parcel and distribution, we report that in 2022 (sic) [ 2023 ], we'll do as well as we did in 2022, excluding the one-off items, in fact you will see that is negative 0.1 which is a close number. At the same time, we also need to factor-in secular net decline, competition in passes and information. So I think we feel good about the number for 2023. I think we had the aim still to get as close as possible that we had in the past on 2024. But that, frankly, will be reviewed as fast as the new plan which we share with the investors later on this year. And amongst the items that are outstanding at the renewal of the new labor contract, which is in for renewal in 2024 and the value of that [indiscernible] obviously has an impact on that breakeven -- and I want to stress once more that we are doing all that we can to get there.

And the next question is from [indiscernible] -- sorry, [indiscernible].

I have a couple of questions. The first one is on the digital payments. You are forecasting a transaction value up 14% 2023 versus 2022. I was wondering how much that is driven from the lease consolidation? And how much this is driven from organic growth? The second one is on what you mentioned before, so the renewal of the labor agreement. Is there any, let's say, anticipation you can share with us on what are your expectations in this respect. This is obviously a very important factor to model the future evolution of the cost base. And finally, I would like to ask you about the logistics competitive environment. We have seen there has been a lot of press about one of your largest competitors, so Bartolini Group being involved in mismanage of employee contracts and so on. So I was wondering if that could be an opportunity for you to get additional market share? And in general, what you're expecting from the other largest player like Amazon and so on, on the logistics side going forward?

Okay. I think the first question is in the sense that we were already working on the payment business with lease even before the acquisition. So the number and the increase you see is growth of the market on one side and hopefully, our market share at the same time. On labor, we haven't started, obviously, negotiation. All I can tell you that in the past the first year of the new contract, which is 2024. It's considered sort of a transition year that has neither effect on legal cost that is clearly premature to have visibility on that. Certainly, we are going through a long process of value closing defining and creation for our employees because we gave them, which was not there before the health insurance as part of the contract, and this was not case 5 years ago. We gave 6 million hours of training. We gave them many different benefits that we are going to put on the table when we start the negotiation. BRT is clearly a topic and from what we understand, they're not the only one but the one more exposed at the moment to this judiciary action on contracts and business operations. The first comment is that, we need to make sure that we are okay ourselves, and that is really -- obviously again carrying a lot and trying to be out of the group of express companies that are experiencing problems. And then without the aim of being too aggressive and go for market share, probably the sort of natural attrition of the companies that we have to review the contracts and specifically the contracts that have been challenged and contracts on the last mile. So I expect that those contracts will probably be stalled for a period in logistics when you cannot certify the same level of quality, and certainly it creates a clear opportunity for competition. So we are obviously assessing both from a legal and a commercial standpoint, the situation very closely. Camillo?

On this, just for our partners, I think that our numbers suggested in 2023, the impact is on the [indiscernible] leaders should be around EUR 100 million to EUR 150 million in the [indiscernible] basically.

The next question is from Gian Ferrari, Mediobanca.

So the first one is on postal products. You saved up close to 4 billion in the second half last year. At the same time, you are raising to EUR 1.7 billion, the fee in 2023. So I was wondering if you are expecting a pickup in flows and if you have a pre-closing of Q1 on the specific point you can share with us. The second is on the EUR 220 million provision for the tax credit, how you and your consultants define that. Are credits already seized by prosecutors? Or where there is evidence there is a further touch to it. Then if you can give us a bit of color on how the EUR 220 million is calculated? The third is on EuroVita, we read in the Italian press that you might be interested or might intervene, particularly in the G&A savings part of the business. If you can comment a bit what is the rationale? And if you have a chance to make any actual assessment on that book? Lastly, to Camillo or Andrea can share the math behind the value for money in insurance represented on Page 41.

Okay. Thank you, Gian. The first answer is simple. We went from minus EUR 4 billion to minus EUR 1.5 billion, So that's a significant improvement on a quarter over quarter. So that's EUR 2.5 billion improvement out of the EUR 14 billion on I mentioned on the overall savings is clearly more than 50% and it's not the only item that has improved in the savings that we see the fact that the finance relates to the very high volumes of maturities and retentions. And we're still targeting on an annual basis a negative figure, but a negative figure that is allowing us to increase the distribution fee from EUR 1.6 million last year to EUR 1.7 million this year because, as I explained, we revamped [indiscernible], revamped the offer and now this offer is very much aligned with market. And as Camillo mentioned, is allowing us to capture more interest-sensitive clients, which is good for volumes for us. And therefore reaction for us and income statement because clearly the interest cost that can go on into our P&L. On EuroVita, no calculation at all. We don't have any visibility on the specifics. Let me just remind you that it's a very different company. Very different business model in the life space, distribute -- they were distributing with over 70 networks and clearly very different from us that we distribute obviously only with our network. From what we understand reading the press, there is a big portion of high net worth individuals in the product portfolio of the EUR 16 billion Life contracts. And again, it's a big difference versus us. And the last point is that notwithstanding the fact that redemptions -- and [ 80 ] redemptions have been stop for 2 months. We haven't seen any impact whatsoever on our redemption rates in the last 2 months. On tax credit, please Camillo.

So the number we reach of EUR 320 million is the result of detailed analysis of portfolio just to that we're seeing for the -- importantly around that level are, first of all, that in any revision process, which involve tax credit possibly and is always seen as a good path to acting in good faith. So we are the ones who are being thrown away. So what we have done is that we have looked at the entire portfolio of EUR 9 billion at book value at the end of the year. We have [ looked at ] the portfolio based on the Vintage this has just been acquired. We have [ looked at ] portfolio based on the type of tax credit depending on the bonus associated to it, and we have also [ looked at ] portfolio in the region in which tax credit has been applied. And then we have assessed the relative risk of the different cohorts, the different vintages. And we took higher provision which I remind you is in cash. The high provision on the tax credit has been seized on the precautious standpoint from the judicial authority, and we have taken high-level of provision on those. And then we have taken down the provision based on the decreasing the perceived level of risk.

So the next question [indiscernible].

Question on insurance and value for money, you show on Page 41. What we do basically we look at the expected return overall. We had from our investment underlying the platform products. And then we look at the split of such return we get through our commissions and the metric that is transferred to our clients. Given that expected returns for Class 1 investments are now much higher compared to 2020 and 2021, given the new interest rate environment, this leads to a much higher expected value for money for our customers because we are not increasing in the meantime our fees. And we expect to capture it also by launching in the coming weeks, a new segregated fund that will allow us to capture higher investment that you saw on Page 42 even quicker for our clients compared to what will happen to the average [indiscernible] that exist on the related funds.

The next question is from the[indiscernible].

A couple of questions. Again, sorry, on the tax credit. We read that according to the government out of the EUR 100 billion tax credit market, there are about EUR 9 billion of frauds which is an 8% rate. So I just wanted to understand that if your provision is about 4% of your portfolio is basically below the amount which is currently seized. Or it is the total amount, which is currently basically seized by the authorities? And if for you, the worst case is just not getting the interest until this credit are seized or the worst case could be that eventually you can lose also the capital? That's the first question. Second question is about the solvency ratio, which is currently increased a lot. If you can clarify what is for you the cost -- the running cost for the insurance? And also what is the timing for moving to an internal model? And what could be the incremental benefits of this adoption? And then the last question is about the Mail & Parcel. Just to clarify on the presentation, you talked about underlying parcel business tax growth. But effectively, your guidance is like EUR 1.4 billion flat for this business. So just to clarify.

On tax credit, the assessment we've made as Camillo described is starting from our existing portfolio of EUR 9 billion in the balance sheet at the end of last year. We reached the EUR 320 million figure, which is by coincidence more or less in line with what has been fees. But it comes from the licensing and the customization of the in-force portfolio. The figures you mentioned on the overall Italian portfolio, the one we also read and notice that versus the 8%. You mentioned were below 50% of that year anyway. So we are [ truly ] on that respect, outperforming the market. The question on interest and capital is also capital, which is basically the effect of the likelihood of not receiving and not being able to compensate the amount. So it's -- On solvency, please, Andrea?

So there were 2 questions. One was on the cost of the mass lapse insurance. The cost is around EUR 20 million per year in 2022 and 2023 because it is a 3-year contract, but we have an option to close after 2 years. And the cost for 2022 is already, of course, booked in our financials for 2022. And the cost for 2023 is included in the guidance we have provided. So we believe the transaction is quite cost effective if you compare it to any other sort of capital management action you can figure out. The second question was about internal model timing and expectation in terms of Solvency II evolution. So where we stand on internal model over the past 2 years, we completed the hiring of a new team of around 20 people, talking about PHDs and financial engineers because it's going to be a very complex model. We completed the investments we needed in IT and other internal procedures. And so we completed the development of the internal model. Now we need to start the validation phase on our own. So we have to validate the results of the model on our own. And after having that left, we can start to formally engage our national authority to ask for the application to the internal model. So one of the reasons why we have done this mass lapse insurance transactions is to bridge the timing we will need to complete the development of the internal model. And also to work on the specific area, the mass lapse risk capital requirement that we believe within an area where we could benefit from the implementation of the internal model in order to sort of anticipate the effect we could add from the implementation of the model itself.

Okay. Camillo on parcel.

The last question, Matteo and we are expecting volume -- we're expecting absolute growth for the Parcel business to the view of around 2% compared to 2022. That is a result of volumes going up and [indiscernible] as a result of the evolution in the market, but positive 2% in absolute level of the revenue. Parcel market will be on our target supporting the trend.

From Michael Huttner from Berenberg.

I've got 2 questions. The first one is on the net interest income. I noticed it went up from EUR 525 million, sorry EUR 523 million to EUR 528 million, Q1, Q4. And I wondered what is the figure at the base of your EUR 2.2 billion? And what you can say about Q1 already on that figure? The second is really a clarification. I think you had about EUR 253 million in Mail & Parcel business reserve baseline adjustments. I'm sure you've explained it, but I completely missed it and I'd be really grateful because I'm kind of struggling a little bit on that one. My last question is on the Mail & Parcel book even again. Did I understand correctly that the original plan target was 2024? But in the meantime, you've got this kind of labor contract renegotiations, so there's a bit uncertainty to that.

On the second question my suggestion is if you don't mind, the second question is a clarification, you can take it offline with Massi. On the last question, it's correct. There was a target and let's -- you have to wait, I'm sorry, for the new plan later on this year, to have the confirmation of the plan or not. And on net interest income, Camillo.

On net interest income, EUR 525 million, (sic) [ EUR 528 million ] is number that we recorded in Q4 2022, and we are aiming to have a full year NII in 2023 around EUR 2.2 billion. And we believe that the NII in the last quarter is consistent with that gain. The first few months are performing in line with our ambitions, and I supposed we hit the target.

[indiscernible], because net interest rates have been mounting during Q4, didn't they?

We can now move to the last question from -- and then I will have -- we have a couple of questions from the webcast -- Giovanni Razzoli from Deutsche Bank.

[indiscernible]

Can you speak slowly on the first question?

Is it better now?

Yes, maybe.

Okay. So thank you for the presentation and for the comprehensive detail. The first question is on the evolution of your supermarket time depo product, which is [indiscernible] as of the end of January. Can you share with us what is the more updated figure for this stock? And can you mentioned something of the deposit EBITDA that you expect for 2023, at least, that comment, if you can share with us these feedbacks that would be great. The second question is on the Mail & Parcel. And specifically on the recently announced deal with DHL. What could be an incremental impact in terms of volume, the revenue of the parcels over a medium-term perspective? And the last question is on -- for Andrea, on the insurance business. There is clearly a little bit of pressure on the market from the rising rate environment on new and conventional policies. We've seen some of your competitors reporting some outflows year-to-date. You don't see as much impact by this trend, at least looking at your volumes and your targets for 2023. I was wondering whether you can see the return on the segregated account the level of the globe as a potential factor going forward for the evolution of the additional Life for 2023?

I will start with the last question, so that we have fresh -- So you covered a couple of points. First of all, yes, I can confirm that we are overperforming the market in terms of net inflows, we have been doing so last year, and we are doing even more so since the beginning of the year because the market is in a negative inflows territories remain strong, whereas we are in are experiencing a strong result, and we already reached EUR 2 billion of [indiscernible] as of last week. As we mentioned the expectations about the future returns [indiscernible] account products. As you can see on Page 42 of my presentation, returns started picking up already since 2021. And thanks to the fact that we are now investing at a higher rate. We expect a positive evolution going forward. When you compare this kind of return with other kind of investments, we have, of course, to bear in mind the kind of customers, which is buying the product and the different level of market risk exposure, the one to buy. To be clear when you buy the government bond, for example, you might get an higher return, not we are fully exposed to market risk volatility. Whereas when we buy a Class 1 product, you still get it as a return and you have 0 market volatility. This is why in the current environment having a business model like ours with the product factory, fully integrated network and a very diversified customer base, it's really a plus that we have given the other players in the market, I believe.

I'll just add the fact that Andrea mentioned of the new segregated account, which is specifically aim at capturing higher rates and higher investment rates quickly for investors. On the affect that [indiscernible] we raised so far. We -- if you have a total amount of outstanding in EBIT, the number [indiscernible]. Yes, exactly. And on DHL, it's quite fast forward to earn it. We signed the -- there is now side of the agreement, which is all flows of DHL coming to Italy will be delivered by us. And we are working together on a shopping center to allow our network of deliveries, which is made of the [ size ], made of postini, is made of our third distribution channel. We have recently activated to use the enabling and core processing exercise. We're performing that -- that parcel we have when it gets into Italy. So we're going to the delivery of DHL e-commerce and parcel business with exception obviously, of the DHL Express, which is the business DHL already has in to Italy. And that will show some results before the end of the year, but there is nothing in the numbers and the last 2% that Camillo mentioned. The second leg is the one I mentioned in my presentation is the fact that today, in Italy, an outbound business is over 90% with the big global players. Clearly, we have a very residual share of the market because, obviously, we don't have the international network to delivery. So that same shopping center will take parcel that are sold as a product that is to whoever wants to deliver globally, we sell a cost-to-cost product. And we bring that parcel to be obviously shipped globally, internationally to this Italian who managed shopping center with DHL. So they apply price to us, which is an internal price of DHL as the third DHL had one shopping center into Italy. So that creates a very important opportunity for Poste but that takes the time not only of activating the IT and processing, but that will take the time of getting this product into our commercial activities. So I think for 2023, I don't see a lot of revenues, but hopefully 2024, this will be important. And remind that domestic logistic is in the low single-digit EBIT margin, and international logistics is closer to them. So it's much more value-added business once we get those.

From the answer is worth -- the number for 2023 is between [ 0.2% and 0.3% ] is a result of a low EBITDA on retail customers, higher EBITDA on public and regional corporates and the overall cost of fund is around 0.7%.

We have 5 minutes left, but we would like to answer several questions from the webcast platform. So the first question is from Azzurra Guelfi from Citigroup. You have increased the guidance, but broadly in line with consensus for 2023. I see [ Intangible consensus ] which is positive if not. Could you share with us the margin of conservative in 2023 guidance. And in case the guidance was increased as you have done several times in the past, the dividend you have reviewed as well?

We have proven track record of being conservative. And thank you Azzurra, I know that you just wanna -- think that we keep telling us also conservative. What do I see the areas of improvement versus [ 2.5 ], I think across the board, maybe taking the way that every single view as on the overall EBIT. So insurance, financial institution, payment and mobile and hopefully, main partner in distribution will help us in doing that. On revising the guidance, no, we just released it. And we will work on the new multi-year strategic plan full later on in the year and maybe that will be the time where we will do that assessment, but nothing that we will do in the next few weeks.

The next question is still from Azzurra, Would you expect additional one-off in 2023 related to staff restructuring given the amount you had already set aside?

Well, as Camillo mentioned, we have set aside on the guidance, EUR 100 million. We have the balance sheet item of EUR 350 million, which is there to help us in the transition. So we affect EUR 100 million, which is very much in line with that over the last 5 years, ended up spending on early retirement.

So Fabrizio Bernardi from Bestinver is asking -- 2022 size of the bond portfolio of fair value and health maturity and relative losses realized for a fair value part and unrealized for health maturity. One, 2022 versus 2021, net equity moves to almost EUR 9 billion from EUR 12 billion in 2021. So it's in fact presumed that the fair value are rare realized losses were about EUR 3 billion. On top of this, there was a EUR 7.2 billion unrealized loss on [ BancoPosta ] versus EUR 6 billion in the 9 months. So net-net, there is a 2022 unrealized loss of more than EUR 7 billion, end of 2022. Net of equity of almost EUR [ 9 ] billion.

Okay. Look, I think we can take this offside or Camillo start answering. I would just mention the fact that all of you remember that over the low-yield years that we went through up to 2021. We were very cautious in assessing our investment versus the interest rate risk. And we cumulated to up to [ EUR 40 million ] of interest rate swaps in the portfolio, which for a corporate company is quite sizable. And thank God we had that portfolio because with the market swing, that portfolio had an improvement in terms of mark-to-market of the specific hedging portfolio of around EUR 10 billion. For the rest of the questions, if you have the details, I will give an answer.

Thank you. I'm afraid that we are out of time. So any answer to the questions we will take offline.

Okay. And thank you, everybody, for -- and I would like one, to remind everybody if any question has not been answered, there is probably one more that we cannot give the time to, please call Massi on existing and additional question, we're here to answer. And obviously, thank you very much for the time you're taking on understanding Poste Italiane as well invested time we need. And looking forward to see you maybe some of you in person on the road show. Thank you.