Poste Italiane S.p.A. ($PST)

Good morning, everyone, and welcome to Poste Italiane's First Quarter 2026 Results Conference Call. In a few moments, the CEO, Matteo Del Fante, will take you through some opening remarks as well as a short update on the TIM offer. Then our CFO, Camillo Greco, will cover the financials. As usual, the presentation will be followed by a Q&A session where you can ask questions either via phone or through our webcast platform. For any topics we won't be able to cover today, please do contact the Investor Relations team, who will be happy to follow up. With that, over to you, Matteo.

Good morning, everyone. Our Q1 2026 results highlight a very strong start of the year and confirm the strength of our platform model. We delivered a record first quarter with revenues of EUR 3.5 billion and a healthy 8% year-on-year growth supported by all business units. On profitability, we achieved a record adjusted EBIT of EUR 905 million, up 14% year-on-year, reflecting continued cost discipline in the current inflationary environment. Net profit reached EUR 617 million, up 3% year-on-year. Commercial trends remained solid with EUR 1.7 billion investment inflows, coupled with strong momentum in postal savings and stable retail deposits. We continue to operate from a position of strength. The group balance sheet remains robust with our solvency ratio at 294% and a EUR 341 million improvement in our net financial position generated in the quarter, which is EUR 43 million more than in the first quarter of last year. Finally, digital payments once again grew above the market, underlying the strength of our platform and its ability to generate sustainable growth. On the back of the strong start of the year and a better-than-expected interest rate environment, we have raised our full year '26 adjusted EBIT guidance to EUR 3.4 billion. We present our stand-alone 2026-2030 plan together with the Q2 results on July 24. Let me move for a second on TIM and give you an update on the tender offer. Over the past few months, we have further strengthened our conviction on the strategic rationale of the transaction and its perfect fit with Poste Italiane platform business model. With our solid balance sheet and strong cash generation, we're uniquely positioned to support digital investment and accelerate strategic initiatives that will deliver growth. The merger of Poste Telco and TIM consumer businesses will create the #1 mobile operator in Italy, kick starting the next leg of domestic telco consolidation. Importantly, financial and insurance services will remain the dominant profit contributor within the combined entity, representing around 82% of domestic EBIT and approximately 64% of the overall EBIT, including Brazil. The financial profile of the proposed transaction is extremely strong with positive EPS impact from 2027, rising to double-digit accretion from 2028. Our guidance implied '26 DPS is confirmed and the dividend policy going forward will be accretive compared to the stand-alone scenario. Pro forma leverage is expected at 1.4x by the end of 2026 and steadily decreasing going forward, thanks to the strong cash flow generation of Poste Italiane and TIM Brazil. The offer terms are compelling for TIM shareholders, implying a 17% through premium to the pre-announcement price and up to over 50% premium on unencumbered average prices with 40% value sharing from expected synergies and an attractive stable dividend outlook. The combined entity will have pro forma free float of around EUR 20 billion, enhancing stock liquidity with a highly diversified shareholder base. We are on track to close the deal by Q3 2026. Let's go back to Poste and group financials on Slide 5. We have posted for the fourth quarter for the fourth consecutive time, a record first quarter with revenues at EUR 3.5 billion. Top line growth translates very effectively into profitability as adjusted EBIT for the quarter reached EUR 905 million, up 14% year-on-year. Net profit, excluding the TIM state contribution was EUR 617 million, up 3%. On Slide 6, the healthy underlying revenue momentum across all our business segments continues into the new year. In Mail, partner and distribution revenue growth was driven by increasing parcel volumes. The anticipated decline in mail volume is effectively mitigated through ongoing repricing actions. In Financial Services revenue increased by 11% year-on-year to 1.6%, supported by investment portfolio strength and a solid commercial performance. Insurance Services delivered strong results across both Life and protections. Revenue rose 6% in the quarter, reflecting stable CSM stock, capital with higher release percentage. Postepay services delivered solid growth across payment and energy ahead of integration into the new financial hub. The telco customer base remains stable with the number of energy clients has now reached around 1.1 million clients. Let's go to Slide 7 and look at EBIT evolution by segment. Mail Parcel and Distribution reported an adjusted EBIT of EUR 43 million for the quarter, in line with our full year guidance. Financial Services operating profitability is up 22% to EUR 318 million, driven by overall strong revenue trend. Insurance Services EBIT is up 4%, supported by both Life investment and protection. Finally, Postepay services, a double-digit EBIT growth to EUR 153 million is driven by resilient top line performance and effective cost management. We now look at some examples of how our platform business model is leaving tangible results. We operate a scalable digitally enabled infrastructure, supported by in-house product visits and a unique combination of physical and digital distribution. The platform allows us to add clients and revenues are near 0 marginal cost while addressing structural everyday needs such as digital payments secure digital identities, energy and everyday services. You can see here a few examples highlighting the strength of the platform. We have become, in fact, Italy's largest payment ecosystem, reaching EUR 1.6 billion revenues in 2025 from EUR 0.4 billion in 2017 with transaction values growing at a 16% CAGR from 2018 to '25, increasing our market share. Energy is another clear example of how we leverage the platform built on anyhow, cloud-native backbone were scaling customer base at near 0 acquisition cost reaching 1 million clients in 3 years since launch and becoming an increasingly meaningful contributor to group EBIT. Finally, digital identities address a systemic national need. Speed has [indiscernible] scaled to around 30 million users with monetization now accelerating as adoption deepen and upselling opportunity materialize. This is the foundation on which we continue to build the new Poste Italiane as the leading integrated platform company in Italy. I would like now to move to a more detailed update on the TIM offer. The slide illustrates why Poste Italiane and TIM represent a perfect strategic fit, enabling future growth. Poste Italiane already operates a larger platform in Italy, combining financial insurance services, logistics and distribution, energy and digital identities supported by an unmatched physical and digital network. TIM adds connectivity and tech infrastructure leadership, completing the platform with an iconic market brand, a large retail telco client base, sovereign digital capabilities, enterprise commercial excellence and a market-leading mobile operator in Brazil. The industrial logic is very strong. Together, we serve the largest Italian client base, leveraging a unique distribution footprint made of post offices, digital channels, third-party networks and TIM outlets underpinned by critical physical and digital infrastructure, supporting the country digitalization, connectivity and data plans. From an earnings standpoint, the combined entity remains firmly anchored to Poste Italiane strength with financial and insurance services accounting for around domestic EBIT and continue to present the bulk of the group cash generation. At the same time, connectivity and digital services to public administration and enterprises represent a powerful growth opportunity. And let me spend now a moment on our super app and why integrating the teen consumer offer is so powerful. With 17 million users and over 4 million daily active users, we already operate an unmatched national scale platform. The Super App is designed around everyday services from payment and banking to connectivity, energy driving higher frequency and greater stickiness than traditional e-commerce models. Today, close to 80% of our app users own more than one product, double the percentage of non-app users integrating TIM premium offering and broad customer base into the Super App accelerates engagement, unlock cross-selling and strengthens the flywheel effect. Important, this is belong on [indiscernible], not loosely assemble partnership. The results is a unique trusted marketplace for daily essential services and long-term needs, enhanced by AI-driven orchestration and personalization across key life events supporting sustainable growth and multiple monetization levers over time. To summarize, it is much easier to sell one more product to an existing client than winning a new client. And this is thanks to our digital plus physical seamless assistance to our clients. Let me now hand over to Camillo for the financial aspects of the proposed transaction as well as a detailed overview of our Q1 '26 financial results. Over to you, Camillo. Thank you.

Thank you, Matteo. Let's briefly focus on the shareholder value creation, which is a key pillar of the transaction. Our ongoing analysis confirmed initial assessment of circa EUR 700 million synergies, which EUR 100 million coming from cost efficiencies and a further EUR 200 million EBIT from incremental revenues. From an earnings perspective, the transaction is EPS accretive from 2027 with double-digit accretion in 2028 compelling pro forma 2028 PE multiple of 8 to 9x. On dividends, we reconfirm guidance implied EPS with dividends paid also the new shares issued as a result of the TIM offer with an accretive dividend policy going forward. . Leverage remains low at around 1.4x net debt-to-EBITDA after lease by year-end 2026 and declining thereafter with current credit ratings as of today confirmed by all 3 rating agencies. Let's move to a more detailed overview of expected synergies. On the revenue side, with TIM, we will add a premium connectivity offer to our platform and unlock powerful cross and upselling opportunities through Italy's large distribution network and our 4.2 million Super App daily active users. We will also accelerate growth across enterprise and public administrations as we expand the tech services offer of cloud, cybersecurity, IoT and Agentic AI as well as integrated one-stop shop for financial insurance, sovereign solutions and other services. Overall, we confirm more than EUR 200 million of EBIT from incremental revenues. On the cost side, the in-debt analysis confirms around EUR 400 million efficiencies. The merger post the telco and in consumer enables OpEx and workforce rationalization. The deal will generate efficiencies from digital and technology integration optimization of the distribution networks and real estate footprint as well as economies of scale on advertising and procurement costs. Additionally, the relaunch of our in-sourcing program will provide further structural benefits. Positive investment grade rating will allow for an optimization of the combined entities funding cost. We expect one-off integration costs of around EUR 700 million per tax, mainly over 2026-2027. Moving to Slide 14. This page illustrates how we see the true premium offered to shareholders and why we believe our value proposition is compelling. Consider both the cash component of the deal as well as the expected value of the shareholders' share of the combined entity, including synergies, the true premium embedded in our offer is 70%, calculated on a pre-deal spot basis. The embedded premium rises up to 50% if calculating an unencumbered average price as TIM shares have written by around 110% since our first investment in February 2025. Importantly, our offer to TIM minority shareholders embed a 40% sharing of the value of the synergies in line with the market standard 50-50 split when considering Poste Italian already owns 20% of TIM share capital. Overall, this transaction structure delivered an attract premium, transparent value sharing and long-term upside to all shareholders. Let's move to Slide 15 for an update on the transaction time line. We announced a deal on March 22, followed by the filing of the exchange and cash offer documentation and regulatory submissions on April 10, both completed as planned. On June 18, we will hold an EGM for the capital increase proposal. On July 24, we will present Poste Italiane stand-alone 2026, 2030 plan alongside with Q and H1 2026 results providing full transparency and enabling a more informed assessment of the value of the equity component of the consideration. By the end of July, we expect Banco Italian concept approvals along the offer period start with closing targeted for end of Q3 2026. Overall, execution is progressing roughly and in line with our stated time line. Let's now move to our Q1 financial results from Page #17. In Mail Parcel and Distribution, revenues totaled just over EUR 1 billion, up 6% year-on-year. Net revenues, EUR 505 million are down by 3%, in line with the trend that we anticipated for full year 2026. Parcel revenues accelerated a remarkable 15% to EUR 453 million driven by market share gains across the diversity of customer base and cost of logistics development. On the logistics front, we announced a JV with Benetton logistics, leveraging our logistics and e-commerce leadership to create a scale platform capable of attracting new customers and supporting profitable growth for the group. Distribution revenues from other business units are up 7% in the quarter driven by strong commercial momentum and active portfolio manager concentration in Q1 '26. Adjusted EBITDA EUR 43 million in Q1 '26 is one in line with the year guidance. Let's look at volumes on tariff on Slide #18. Parcel volumes were up 15%, supported by continuing market share gains across customer segments. 43% of items are now delivered via the postal network, up 3 percentage points versus last year. Looking at parcel pricing, the average tariff remains broadly stable as volume growth is spread across customer segments and growth in lower price items comes with a lower unit cost to deliver. Moving to mail. The volume trend is in line with expectations down 8%, whilst the higher mail average tariff reflects ongoing repricing actions across both regulated and market products. Moving to Financial Services in gross revenues for the quarter at EUR 1.8 billion, up 8%. Net interest income came at EUR 658 million Q1 '26 reflecting lower rates on variable portfolio versus Q1 '25, while marginally ahead of 2026 guidance as a result of an improved interest rate environment towards the end of the quarter. We expect this will provide more meaningful support to NII in the coming quarters. The EUR 166 million active portfolio management revenues realized in the quarter represent most of the capital gains expected for the year. Postal saving distribution fees are stable at EUR 440 million and supported by improved net inflows. Consumer loan fees reached EUR 66 million. Asset management revenues are up 27% to EUR 55 million in Q1 benefiting from higher assets under management. Finally, adjusted EBIT came in at EUR 318 million, up 22%, reflecting the positive revenue trend. Moving to Slide 20 [indiscernible], up EUR 5.3 billion in the 3 months from the end of 2025. Looking briefly at each component, we reported strong EUR 1.7 billion net inflows in investment products, confirming the positive trend in life insurance with significant contribution from multi-class products as well as in asset management. Deposits were up, benefiting from higher balancing from PA clients and resilient deposits, retail deposits at EUR 59 billion, confirming the stickiness and loyalty of our customer base. improved postal savings net outflows were driven by higher flows in postal bonds. Moving to Slide 21. Insurance service revenues amounted to EUR 469 million Q1 '26, up 6% year-on-year. We continue to have positive net flows in Q1 '26 with a significant contribution from [indiscernible] products. Our improving lapse rate down to 7% is driven by normalizing market environment and lower client portfolio rebalancing activity in Q1 '26 at around 13% -- around 35% of our lapses have been reinvested into new life products. Life Investment and [indiscernible] were up 6% to EUR 43 million in Q1 driven by growing CSM and higher EAs. Protection revenue were up 9% in the quarter, supported by higher gross ripen premium, up 6% to [indiscernible] and the market-leading combined ratio. Adjusted EBIT of [indiscernible] is up 4% compared to Q1 '25, supported by both Life investment and protection. Net profit of EUR 265 million reflects the lower free capital yield due to the additional remittance to the [indiscernible] company and the temporary higher Europe tax rate. On Slide 22, we showed the CSM evolution in the quarter. Normalized CSM growth is positive at 2.9% annualized with a strong increase in new business value and expected return more than compensated in the quarterly release. Group CSM at the end of the quarter is at EUR 13.8 billion, providing strong visibility on the division's sustainable profitability going forward. Importantly, both the CSM and the equity of our insurance business have grown in the quarter. [indiscernible] group Solvency II ratios was [ 294 ] at the end of March 2026, well above the managerial ambition of around 200% through the cycle. This ratio already embeds the accrual of the 100% net profit remittance to the parent company. The ratio remains solid with the movement mainly driven by negative impact from economic variances due to higher risk-free rates and spreads, while the turn capital generation of the business fully covers the foreseeable dividend impact. Moving to [indiscernible] on Slide #24, where solid revenue and EBIT progression continues ahead of integration into the financial hub. Revenue rose by 7% year-on-year to EUR 4 million to EUR 5 million in Q1 as our unique everyday ecosystem continues to drive top line and profitability growth. Strong payment revenues at EUR 297 million, up 5% in the quarter, supported by higher transaction value, up 10% year-on-year and growth in total number of ecosystem transactions, up 14%. Telco revenue was stable in Q1 at EUR 82 million, thanks to solid client acquisition nights. The immigration to the TIM network infrastructure has been completed in April. Energy revenue reached EUR 46 million in the quarter driven by the expansion of the customer base now 1.1 million clients. Top line performance and effective cost margin drove a strong 15% adjusted EBIT growth to EUR 153 million in Q1. Let me now give you a brief overview of Poste Italiane Telco business, launched as an MVNO 2007, the Telco business is now the fifth player in Italy with a total of 4 million customers with a 6% market share in mobile. Our [indiscernible] is extremely loyal with a 6% to 7% churn rate well below market levels. 2025 revenues were EUR 3 million to EUR 8 million, while in Q1 '26, we reached EUR 82 million. Profitability is meaningful and improving contribution to gross EBIT implying a 25% margin. The business operates with a very lean structure, leveraging our nationwide physical distribution network and digital channels, including the Super App. Against this backdrop, the envisage possible combination of posted Telco business within consumer carries the #1 mobile operator in Italy and effectively staff the next leg of domestic telco consolidation. Since the end of 2025, the average head count has fallen to just over 119,000. Importantly, the value-added per FTE continues to improve by 7% [indiscernible] per FTE. HR cost per FTE are up 2% to [indiscernible] per FTE as a result of higher variable compensation and labor agreement salary increase. Moving to Slide 27. HR costs increased marginally by 1% to over EUR 1.4 billion, mainly driven by EUR 23 million of additional costs from a variable compensation and labor agreement [indiscernible] in this quarter, ordinary charge cost revenues are down to 39%. Non-HR costs increased by EUR 116 million year-on-year. Fixed costs were up due to the concentration of marketing and advertising costs in the quarter. Variable costs are up EUR 66 million, reflecting business growth dynamics. D&A are up by EUR 18 million, in line with the increase in investment driving our continued transformation. In general, our focus on cost and CapEx discipline across all divisions remain [indiscernible] sharp and protecting the bottom line profitability is a priority. Thank you for your time. Let me hand over to Matteo for [indiscernible].

Thank you, Camillo. To conclude, Poste Italiane is delivering record results with healthy growth, rising profitability and a very solid balance sheet, validating the strength of our platform business model. Looking ahead, in light of our strong Q1 results, and an improved interest rate environment, we have raised our adjusted EBIT guidance to EUR 3.4 billion for the year. Against this backdrop, we're even more convinced that the TIM transaction is the natural step in our platform evolution. TIM [indiscernible] and technological leadership completes our offering with an iconic premium brand and enables us to fully lock the value of our physical digital ecosystem. The deal is financially disciplined EPS and DPS accretive, also thanks to material expected synergies and is fully consistent with our capital and dividend framework. Execution is on track and the closing is expected by Q3 '26. We are entering a new chapter of our journey, shaped by the progress we achieved and driven by a clear long-term ambition. On July 24, we will be unveiling our strategic 2026 to 2030 stand-alone plan alongside our Q2 '26 results. I look forward to seeing you there or even before in our road show. Thank you, and over to Giuseppe.

Thank you, Matteo. We are now ready to start the Q&A session. [Operator Instructions] The first question we have today is from Antonio Reale at Bank of America.

I've got a couple of questions and one clarification, if I may. The first one is you've upgraded your EBIT guidance for the year up to EUR 3.4 billion and I understand you'll be presenting your stand-alone plan targets in Q2. But if you could give us a bit more color around sort of the moving parts driving this and where you think see better commercial momentum within the group. That will be my first question. My second one is a follow-up, a clarification on, I think, on your dividend remarks. I think if I remember back in February, you guided for a net profit of EUR 2.3 billion with a payout that was at least 70%, which in your existing share count, it implies something like EUR 1.3 dividend per share or so which will still be up year-on-year. And I think this is broadly in line with consensus expectations. Now I also think you've said that you expect this number to be growing consistently with the accretion that would derive from the deal. I just want to make sure I've understood this right. You're sticking to a growing DPS even after accounting for the new share count, which you need to issue to fund the Telecom Italia acquisition. Did I understand that right? And if you could elaborate, I think it's an important point. The last question is really on your synergies on the Telecom Italia deal. You've talked about EUR 700 million pretax, of which EUR 500 million cost synergies from year 2 and EUR 200 million in higher revenues from year 3, if I look at your Slide 13 correctly. You've given us good details on this slide. Maybe you can sort of walk us through and tell us where you would see any relevant upside that is not included in these numbers.

Thank you, Antonio. I'll take the first question and then hand it over to the CFO. I think we have a strong momentum in our core business, the financial business. We have posted the first quarter with strong retail investment flows. And I think this is the to stay for this year. And obviously, it will be a target for a plan. I would say that the -- over the plan up to 2030, the also energy business will also finally give a very meaningful contribution to the EBIT base of Poste and then I think the other very important direction we're taking is with the consolidation of our payment business into BancoPosta and the ambition to present to the market a unified financial services segment, including insurance. We have started more than a year ago, journey given on the 3 segments, a unified leadership that will break some of the normal internal segment dynamics and will allow us to present a real client center offering for financial services. And finally, before I hand over to Camillo, we will keep the evolution of our logistic presence. We reach almost 50% of our parcels delivered by Letterman. The '28 plan was targeting 2/3 so I'm curious to see where we will be able to commit for 2030, but that's another big transformation step allowing our lettermen that day by day has less mail to deliver to be busier and busier with parcel. And this quarter, 15% growth on Parcel give us a lot of confidence that we are in the right direction. We're gaining market share in B2C for the first couple of years. So we started gaining market share in B2B. And finally, we have never seen it in Poste. We start to see a meaningful growth on outbound products since we did our strategic agreement with DHL. Since 2 years, we have a product. We have put together a commercial focus on this. And finally, we start to see numbers coming through -- please, Camillo on dividend.

Yes. So I'll start with 2026, and then I'll comment on the second part. With regards to 2026, yes, we had given guidance of EUR 2.3 billion for 2026. And we also said at the time that the expected dividend was going to be within the range of [indiscernible] I think that the guidance that we gave, the increased guidance we gave to [indiscernible] profit level gives us pace to be very confident to be at least at top end of that range. With regarding [indiscernible] the second question, which is a dividend policy going forward if the transaction goes ahead, the CEO did guide towards single-digit accretion for EPS and double-digit accretion is for 2027 and 2028, respectively, and we expect the dividend to follow that same direction. And then there is the third question on synergy.

Yes. And now we talk about -- so with respect to synergies, the number that we gave on the 22nd of March was EUR 700 million. That was the result of some outselling work that we did within post with a very small group of individuals involved. I think that since then, we have done a massive amount of work internally with different work stream involving both the revenue side and the cost side involving every corporate function of the group. And at this point, we can say that we feel very comfortable of our ability to deliver that level of synergies. Obviously, there is marginally different mix compared to what we expected initially, but the total is the total is confirmed at least as a base.

The next question is from Alberto Villa at Intermonte.

The first one is again on the guidance, just to be to understand correctly, if the upward revision was only related to the, let's say, financial segment. And if you can provide us with your underlying assumption in terms of guidance for 2026 from investment portfolio. You also had a target of around EUR 200 million of active portfolio management that you basically did most of capital gains in the first quarter. Can we assume that you are basically done there and for the rest of the year is mostly coming from the better environment in terms of interest rates that is boosting the investment portfolio and the guidance? The second question is on the announced agreement with the Benetton group in logistics. If you can expand a little bit on that and let us understand better what are the implications and potential positive coming from this agreement that would be helpful. And finally, curiosity, since you launched the offer on TIM, I was wondering if you can give us some color on what was the reaction by the different stakeholders on the offer the, let's say, the positive and pushback comments you have been gathering from the different side, let's say, investors and also inside of the company and so on, that would be interesting to hear.

I will let -- I will follow the order and so you, Camillo start and then I...

Yes. So with regards to the guidance upgrade, I think that the key point which has led us to increase the guidance is the evolution of the NII. I think we said that in the speech and the script in the presentation. The backdrop to this is that we have guided in February to EUR 2.7 billion of total portfolio return, which was in line with the year before 2025 whereas in [indiscernible], we had no capital gains, and we were planning to do something between EUR 100 million and EUR 200 million in 2026. We have reached that level. So first of all, there should be not much more in terms of capital gain compared to what we have already done. But overall, we are increasing our guidance to total portfolio return to EUR 2.8 billion as we are going to have EUR 100 million more of NII compared to the initial guidance of EUR 2.7 million.

Yes, and -- just to be -- just to top up -- just one word on the answer. The capital gain, we recorded in the first quarter, we had already anticipated. I think the market was aware it. But please bear in mind, as you see in our appendix that we still have -- if you look at Page 34 of our appendix, we still have EUR 1.5 billion of gross unrealized gains. So that's our historical buffer that we use if and when need be. The agreement with Benetton is basically A very important step, we're creating new companies starting from their warehousing facilities in [indiscernible] Northern East Italy. They basically spin off their premises into Logistics 360, that's the name of the company. We will own 51% of this company. So we will consolidate the business. We will start serving obviously, the Benetton Group, but the strategy behind the transaction is that the warehousing system is unsaturated. And therefore, we have already started offering that platform for warehousing to other prospect clients and that obviously has a very interesting marginality because the warehousing is already amortized in the new co. It will give us additional revenues, some EBIT contribution. We will have to do some CapEx to upgrade premises but more importantly, it will allow us to go up the value chain. We have follow-up for the last 9 years. We started at the end of the line. And today, we are at the top of the logistic space in Italy, mainly driven by B2C, but we started already 3 to 4 years ago, a journey achieving more value-added services that's obviously the B2B space, which will be coming also out of this and will be the warehousing. The third question is TIM offering of March reaction and push back -- the reaction overall, even though we are clearly pushing the envelope from some standpoint because obviously, we are asking a different client base to learn the ops of the financial institution domain, which is where we belong, is overall positive. Clearly, there is always, as in any transaction, some price objectives and tensions on you could have offered more. Our page today and what we call the true premium, I think is a good answer to that push back. I'm referring to Page 14, where we show that on a true premium basis, looking at the value that the TIM shareholders had the Friday before the tender and comparing that value with the value that they will have after the transaction is completed and synergies are brought home. There is a 17% to the TIM shareholders, but we didn't mention in the presentation, there is a 10% for the post shareholders. So I think we have made an effort to be on the TIM side of investors. And as Camillo reminded on the call, these numbers are assuming an unencumber assets, the reality is that, obviously, we were with them for more than a year now. And so if you look at it on a longer time frame, and it's -- I think we can debate as long as we want, whether on the 22nd of March, when we launched the offer on the Sunday TIM was in [indiscernible], but certainly, certainly, it was not a totally unencumbered asset. If you look at it on a longer time frame to reach as much as 50% through premium. I think the most interesting trend we are seeing, the more time we spend on the road, mainly with obviously post investors is that our strategy, the more we detail it becomes clearer to investors. It's clearly a long journey. We have 3 months more to go before there is the final launch of the offer, and this is a time that we will spend explaining the opportunity to all investors. And at the end of this period, you will have also the opportunity like the first question of Antonio pointed out of our catalyst strategic plan stand-alone on the 24th of March. And let me add finish that, that plan will be a stand-alone plan plus obviously, we'll have, as we did today, the optionality that we will show an update to investors of the TIM transaction.

Back to our next question is from Tommaso Nieddu at Kepler.

The first one is on payments revenues given we are ahead of its consolidation in the financial half. In the quarter, [indiscernible] at 5%. The underlying KPIs were materially stronger because if you look at transaction volume, value is plus 10%, total transaction plus 14% and that's like a 6 to 10 percentage point gap, and we shouldn't have any more the headwind from the instant payments. So my question would be, if you can help us decompose what is happening on the take rate. I understand you shouldn't follow closely. But [indiscernible] would be highly appreciated. . And the second one on guidance, sorry, it's a follow-up. You have raised the adjusted EBIT guidance, but not the net profit guidance. And should we read this as a flagging some offsetting headwinds below the line? Or it is just a matter of rounding when it goes down and you expect as well a positive even at smaller upgrade on net income?

Thank you, Tommaso. I will let Camillo dig a little bit on payments as you required, and remind everybody that on Page 48 of the 47 and 48 of the appendix, we have some very strong data on our payment growth since 2018 when we created our payment division.

Yes. So thank you, Matteo. So we are indeed pleased with the performance of the PostePay Services division within what we call payments, there a number of subset of revenue contributors, which are grossly divided in 2 categories. One are card payments and the card payments has enjoyed strong performance. And then we have another group of contributors, which are called either payments. And within other payments, there are also things that have been, as we planned, performing a bit less strong as an example, payments related to [indiscernible] been going down. So if you average out the 2 digits, this is where you get. And overall, the transaction metrics and underlying trends in payments are indeed very strong as also you can look at in the appendix of our presentation. With respect to the second question, we have indeed upgraded our guidance at the operating profit level. We have not done the same at net profit was implicit in what I said to Antonio as we had 2.3 and 2.3 is EUR 100 million, let's say, corridor. And with the upgrade. We are now in the upper end of that 2.3% compared to where we were at the presentation in February.

Next question is from Andrea Lisi of Equita.

The first one is on the parcel segment, where we saw a strong acceleration in volumes and that transmitted also to revenues that is stronger than the past quarter. So what should we expect going on. But also on this point, what are the actions you are putting in place to see some more transmission of the higher revenue is also to higher EBIT level on the division. The second question is [indiscernible]. We have seen a small decline in the card stock quarter-on-quarter. If there is any reason or something you have observed on that. And really last one on the GDP in Life business, 7% year-on-year decline. Can you provide some more color on that and which trends are you experiencing [indiscernible] going on?

I'll start with [indiscernible] and then let Camillo on the second question. Yes, I mean we keep our focus on parcel that is created future or logistic space. the game 9 years ago was to be able to go on the field and play because to be entirely honest, 9 years ago, we were not even in the top 5 players at home, forget about the international or the outbound. Now we're clearly at the lead of that game. So the market share game has worked. And Andrea, you're totally right saying when will you be able to extract margins out of this position. To be entirely honest, I think it's still a bit premature because the market is extremely competitive from what we hear nobody is really smiling out of our competitors, and our competitors are all foreign on giants, the likes of the FedEx, UPS, DHL, GLS and Bertolini owned by La Poste. So I think there is still a very strong competitive environment that at least on the B2C and to some extent, on the B2B, doesn't leave a lot of value for increasing pricing and margin. The way we're trying to address this, as I mentioned, is going up the value chain, we did the Plurima acquisition 4 years ago to move into health care logistics, where we took a leadership and we keep growing there. We launched a contract logistic company that has started making some meaningful inroads in contract logistics. So that's the first time in history that Poste entered the warehousing business in logistics and clearly, Benetton is an evolution of that model. So the way we think we can extract margins out of the logistics space in the next 2 to 3 years in summary, is more out of moving up the value chain then the pure B2C or B2B. And let's not forget, that's one very important item that is paying off very, very, very well. The Pudo market, so the delivery in location. So everything which is not home delivery, we have an absolute leadership there with today, almost a quarter of all our B2C volumes going into a Pudo place. That's a staggering number and that applies to our network and that applies to our network because other than our post offices, which are 12,000 enabled to do parcels. We are adding to those the [indiscernible] Poste, which is our clear part network, which is another 20,000 points that we launched 3 years ago, the [indiscernible] JV with DHL, which is also going very well. We have an intermediate target of 3,000 lockers. But the objective is 10,000. So that space, which is extremely important in terms of covering the ground because if you look at developed markets, when retail finds convenient to be delivered in a pod that habit becomes relatively sticky. So if you gain that space, you gain that client and you gain the fact that you have efficiency because, obviously, every time we stop and refill a [indiscernible] or give our path to a third-party agent, we can do multiple of 10, 15 items as opposed to the home delivery item, which is obviously a trip, one drop as opposed to 1,310 drops.

Okay. So I'll take the other questions. So the first question is around the evolution of the stock of cards. I think that on this point, we are where we want to be. If we look at I think you are comparing the stock of cards to fiscal year 2025. We are up on posted pay evolutions, which are the cards which are the ones which have been investing more in terms of capabilities. We are also up on debit cards. We are down on posted a standard, but only the portion of cards which is associated to government grants or government payments. So that stock of cars have been going down as the funds being transferred to Italian citizens on the cards have been going down progressively too. So that is what has led to that evolution. But the cards with which we work the most have been growing as we expected. With respect to the second question, which I need to address, which was with regards to the lapse rate, it has indeed gone down to 7% below where it was last year, it's still above our historical trend levels. And hopefully, we'll manage to control that also going forward. Certainly, at this level, we are in line with the budget levels for 2026, despite being ahead of where it was in the past. Let me also forget, as I said in my script, that part of this lapse is self-induced as we are effectively rotating portfolios to different products within our product suite. So if you isolate that impact the true lapse rate is around 4.5% as opposed to 7%.

Next question is from Giovanni Razzoli at Deutsche Bank.

One question and one clarification. I've seen that you had EUR 2 billion of outflows in the postal savings in this quarter. In the previous conference, I'm not mistaken, you mentioned that this year, there will be a concentration of redemptions of this product. Can you please confirm if we have already at the peak of outflows in redemptions in 2025 or if you would expect it more in '26 and '27? And second question is a clarification as the line was pretty bad. On your response Camillo about the dividend per share, you mentioned the range of EUR 1.3, EUR 1.5 of dividend guidance for 2026? Or did they...

No, I didn't say that, Giovanni, I stop immediately. I said that I said in February, EUR 1.25 to EUR 1.3. And what I'm saying now is that the result of the upgrade of the net profit, we feel very comfortable getting at least at the top end of that range.

So there is another question left.

And the first question on postal bonds, I can tell you that '27 is lower redemptions and that we had a very good year so far on postal savings. So we continue the positive trend of reducing the net outflows and that's thanks to our focus on one end, our changing distribution model in the making and the fact that we keep enjoying sort of honeymoon with our colleagues and shareholders of CASA deposit [indiscernible] will keep providing us a very appealing, very [indiscernible] products for our clients. And one thing that I mentioned few times in the past few years, but I take the opportunity to repeated postal savings being in the hands of 35 million Italians and having meaningful redemptions every year are an engine in the engine of the platform. In other words, if you have a nice and good offering of postal savings, on the shelf that you can offer to your clients. The dynamics with your clients across products is a positive one and that allows you to get the client going to redemption to reinvest in postal savings. If risk parameters allowed to start a diversification trajectory into risk and into multiclass insurance products. And that's the basis also for our strong performance in protection because that comes together with often an embedded offer in life products, and that drives many of our products. And when we talk about the flywheel effect when we talk about the platform, when we say that it's much easier to sell a new product to a client that you already own then go out and win a totally new client, that's exactly what we mean. Postal savings working is a new client is a client satisfied with the performance of the product that has -- is in the perfect mood to receive a new offer on a product. And that's really in a nutshell the -- if you allow me, kind of the secret weapon, we're trying to put on the table every day with our 30,000 tellers and 9,000 consultants facing retail on the physical side and our more than 4 million daily average users. We have shown in February an increasing participation of the postal savings sales on the digital platform.

We have one more question from Michael Huttner at Berenberg.

Yes. And it was really a very light question. So -- well, actually 2. One is on inflation and the other one is on solvency. I did ask you one fly TIM and they said no inflation is like nothing, EUR 10 million or something. But I always worry a little bit about potential disruption to the cost part of your business. So that would be one question. What's the outlook there? And then the second is on solvency, so 294%, the managerial guidance, 200. I know you're doing this EUR 1.5 billion cash extraction from PosteVita, you've done EUR 500 million. And I think in this number, you've already deducted EUR 1 billion. Is there more to come out of this? Or how should we think about it?

Please, Camillo, if you start with the inflation impact.

Yes. Michael, I do to worry about inflation. So we do ensure that message is passed to our divisions. And with regards to 2026, we did have in the first quarter some inflation-related cost I think to the tune of around EUR 20 million in the quarter, and that has to do mainly with variable cost growing with inflation and also some of that EUR 20 million related to transportation cost where I also add that we are systematically transferring extra potential transportation costs related to energy to our customers to the extent we can.

And on solvency -- the EUR 294 million for the sake of clarity is including out of the -- sorry, EUR 1.50 billion special dividend upstream from PosteVita, EUR 1 billion. The last EUR 500 million will have around 11 basis point impact. What we will do from here, I'm sorry, Michael, you need to be patient, going back to the first question of Antonio Reale is going to be unveil on the 24th of July.

So that was the last question. So thank you all very much for joining us today.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.