Good morning, everyone, and thank you for joining us today. Massimiliano Riggi, Investor Relations. On behalf of Poste Italiane's management team, it is my pleasure to welcome you to our 2Q 2023 results. I'm sure you have all had the chance to review the documents which are available on our IR section of our website. Let me hand over to our CEO, Matteo Del Fante, for some opening remarks. Our CFO, Camillo Greco, will cover the financials. At the end of the presentation, you can ask questions, either by phone or through our webcast platform. Over to you, Matteo.
Good morning, everybody. Thank you for joining our Q2 results call. On slide three, you can see some of the key messages. We have over-delivered into the H1 of the year against our strategic plan. Underpinning these results are solid commercial trends, coupled with a continuously disciplined cost structure. In the H1, revenues are up 8% year-on-year to EUR 6.1 billion, and EBIT growth is up 11% to almost EUR 1.6 billion. Total Financial Assets register strong positive net flows in insurance and asset management from our loyal customer base, outperforming a challenging market environment. Our solid balance sheet and diversified business model have enabled us to deliver ahead of the 2023 guidance. Let's move to the financials on slide four, please. Poste delivered a strong performance in the Q2 and H1 of the year.
Let's focus on the latter. With the top line at EUR 6 billion, total cost of EUR 4.5 billion, were better than expected, considering investment in business growth and a limited impact from inflation. This leads us to an opening profitability, operating profitability of almost EUR 1.6 billion. Finally, net profit was up 16% to EUR 1.1 billion. Moving to slide five, where you can see the healthy underlying revenue progression across all business lines. Positive trends, coupled with our commercial efforts, have delivered another set of successful results. In Mail, Parcel and Distribution, tariff repricing and encouraging pickup in parcel volumes contributed to the top line, as well as some additional revenue from M&A activities related to sennder that Camillo will go into more detail later. In financial services, revenues have increased, supported by NII and other business lines.
Insurance Services show solid underlying commercial activities with strong positive net flows, outpacing a difficult market. Our lap rate is stable and almost half the market rate. Revenues are in line with our plan, notwithstanding a challenging market backdrop, and considering that Q2 2022 benefited from volatile components as a result of the sharp interest rate increase. As such, a year-on-year comparison is not representative of our healthy business progression in this segment. Payment and mobile continue on their expansion trajectory, with meaningful contribution from all business and lease consolidation. Let's go to slide six and EBIT evolution segment by segment. Mail, Parcel and Distribution shows a strong increase in operating profitability, up 84% to EUR 1.59 million in the quarter, and up 74% to EUR 247 million in the H1.
The top line remained resilient, thanks to increasing parcel volume, mail repricing action, and supporting commercial trends in distribution revenues. In this quarter, we book a EUR 1.9 million, one-off, non-cash capital gain related to sennder. Just to remind you that sennder offers technology optimizing full truckload operations, boosting the movement of parcel between our sorting and distribution hubs. We now own a 10.2% share in sennder Technologies GmbH. Let me highlight that the positive progression of Mail, Parcel and Distribution EBIT is confirmed also without the sennder capital gain contribution. In financial services, the operating progression is mostly driven by NII increase, supported by higher interest rate and retail deposits. Insurance services EBIT is in line with our plan, mirroring the revenue dynamics I've just described.
Payment and mobile constant growth is further supported by strong revenue trends, and lease consolidation, more than compensating energy business startup costs. Let's move to a more detailed review of the financial with the CFO, Camillo Greco. Over to you, Camillo.
Thank you, Matteo. Good afternoon, everyone. Let's start on slide eight with Mail, Parcel & Distribution, where segment revenues grew 11%, reaching EUR 1 billion in Q2. Mail revenues remained resilient, thanks to a favorable product mix and ongoing repricing actions. Underlying parcel revenues are up 2%, supported by increasing volumes, mitigating the reduced contribution from the PPE logistic contract. Other revenues were up 67% in the H1, on the back of the EUR 109 million sennder non-cash capital gain, resulting from an M&A transaction, which led to an increase of posted holding in sennder parent company to 10.2%. Positive commercial trend in the H1 have led to an increase in distribution revenues of over 7%, more than positively offsetting cost inflation, resulting in an EBIT increase of 84% to EUR 159 million in Q2.
These results have been achieved without the contribution from active portfolio management, which last year amounted to EUR 97 million. Let's look at mail and parcel volume and tariff on slide number nine. Parcel volumes were up 4% in Q2 and up 3% in H1, supported by healthy B2C growth. Looking at pricing, the average parcel tariff was down 2% in Q2, due to a different product mix, as some lower tariff clients had a significant volume increase. Moving to mail, as a result of the continuous repricing actions, coupled with favorable product mix, we have offset the structural decline in lower margin and recorded items. The tariff increased by 5% in Q2 and by 6% in H1, and we expect a beneficial effect to be visible over the next quarters. Moving to financial services on slide number 10.
Gross revenues are up 5% in Q2 and up 7% in H1, reaching EUR 3.1 billion, mostly driven by NII. Let me remind you that revenue growth was achieved without any contribution from active portfolio management in the quarter. Instead, a higher quality revenue stream came from net interest income at EUR 564 million in Q2, up 29%, and EUR 1.1 billion in H1, up 30%. This was supported by favorable rate environment and increasing retail deposits. Postal saving distribution fees amounted to EUR 403 million in Q2, and EUR 808 million in H1, in a difficult market, where higher rates led to an increase in postal bond redemptions.
On the back of the repricing of the current accounts and other payment services, transaction banking fees grew 8% in the quarter and 10% in H1, helping to mitigate the traditional payment slip decline. In loan and mortgages, loan volume growth was positive, representing healthy underlying business trends. Our partners' cost of funding, which has reached its peak, impacted our net distribution revenues, down 10% in the quarter and 23% in H1. The year-over-year comparison, though, is not representative, as last year, interest rate environment was totally different from today's reality, and expect this phenomenon to have bottomed out. Asset management revenues were up 31% in Q2 and up 11% in H1, as we enjoyed firmly positive net flows, benefiting from the recent launch of retail target-dated fixed income funds. EBIT grew 15% and 13% in Q2 and H1, respectively.
Let's look at NII evolution on slide number 11, focusing on the yearly progression on the top graph. The retail and corporate component, mostly invested in BTPs, contributed to the growth by EUR 110 million, supported by favorable rate and volume trends. Moving on to the NII component from public administration. We have EUR 10 billion of deposits in those accounts, with a remuneration link for 60% to the near BTPs and 40% to six months Italian govies. The increase in market rates led to a EUR 6 million NII improvement year-over-year. The fair value component has a positive effect year-over-year, due to the mark-to-market difference in hedges in place. As mentioned in the last call, the contribution from the treasury component is currently negative EUR 16 million, which will stabilize going forward. Moving to slide number 12.
TFAs reached EUR 480 billion, up just over EUR 4 billion since December, supported by positive market effects. Our customers are increasingly seeking to limit their exposure to market risk. We are well positioned to offer them such security, as over 92% of their TFAs are protected. Let's look at each component. In H1, postal saving outflows were EUR 5.6 billion, significantly improving year-on-year, thanks to the recently revamped postal book, Offerta Supersmart, which successfully attracted new customer liquidity. Postal bonds had a strong gross inflows year-on-year, however, were impacted by early redemptions due to the high interest rate environment. A positive market effect mitigated the outflows with EUR 2.5 billion. Insurance net inflows were at EUR 3.1 billion, outpacing a challenging market, with the product mix mirroring customers' increased demand for capital guarantee policies.
Performance, including customer accrued interest, is positive for EUR 1.5 billion. Deposits and assets under custody grew by EUR 1.2 billion, and mutual funds recorded net inflows EUR 0.9 billion. Finally, net inflows in saving and investments reached EUR 800 million, supported by distribution of insurance products and newly launched fixed income funds. Moving to slide 13. Following the adoption IFRS 17, we have restated last year's insurance Q2 figures, and this quarter results have confirmed that we are well on track to achieve the full year target, notwithstanding the challenging market. As highlighted in the previous quarter, year-on-year revenue comparison is not representative, since last year's revenues benefited from a positive one-off in Q2 2022, due to the release of an additional portion of the CSM, resulting from the mismatch between the expected and the actual market rates.
Revenues amounted EUR 379 million in Q2, down 10%, and EUR 772 million, down 3% in H1, though with an increasing recurring component. From a commercial standpoint, life insurance was supported not only by strong net inflow of EUR 1.1 billion in the quarter, but also by a low lapse rate at 4.2% versus the market average of nearly 8%. Life gross written premium exceeded EUR 4.4 billion in Q2, up 5% year-on-year. In H1, life gross written premium reached EUR 10.5 billion, increasing 13.8% versus last year. The product mix between Class I and multi-class products mirrors increased customer demand for capital guaranteed policies. CSM release was at EUR 335 million, down year-on-year.
Nevertheless, CSM stock increased by almost EUR 1 billion, to EUR 13.9 billion before release, confirming that our insurance business remains both profitable and sustainable. Non-life net revenues were up 40% in the quarter, supported by higher gross written premium in all product lines. We also completed the Net Insurance acquisition, which represents an enabler to accelerate the growth of our protection business. In fact, protection gross written premium was up 76% year-on-year to EUR 190 million in Q2, and up 62% to EUR 427 million in H1, EUR 67 million of which from Net Insurance. Combined ratio was stable at around 88% against increasing volumes in welfare, which is a business with a structurally higher combined ratio. In Q2 2023, EBIT was at EUR 330 million, down 12% compared to Q2, which was impacted by positive one-offs.
In H1, EBIT was EUR 664 million, 5% lower year-on-year. Let's look at the Solvency II ratio evolution on slide number 14. Poste Vita's group Solvency II ratio further improved by seven percentage points from the end of last year, last quarter, reaching 274%, well above the managerial ambition of 200% through the cycle. The Solvency II ratio already embeds impact of 8 percentage points in relation to a foreseeable dividend to the parent, Poste Italiane S.p.A., based on the new 75% payout ratio, which was increased from 50% at the end of Q1. The Solvency II ratio benefited from a lower BTP spread, as well as from positive capital generation from new business and in-force portfolio. Solvency II ratio, as of yesterday, is between 265% and 280%.
Moving to Payment and Mobile on slide number 15. We continue to see a staggering growth in revenues of 49%, reaching EUR 374 million, with all business lines providing an outstanding contribution, both in Q2 and H1. Card payment revenues grew by a third to EUR 170 million in the quarter, and EUR 332 million in the H1. The structural shift to cashless payments in Italy was supportive of this growth, with underlying Postepay transaction value increasing 13% since Q2 2022. Other payments more than doubled, both in the quarter and in H1, mainly driven by increased payment transactions directly managed by Postepay as payment service provider. This consolidation contribution continues to be visible both in card and other payment revenues, adding EUR 25 million and EUR 45 million in Q2.
Telco revenues grew 6% in Q2 and 5% in H1, also supported by the fiber offer. Finally, our new energy business has been successfully growing with about 300,000 contracts signed since launch, bringing in EUR 26 million of revenues in Q2. Yet again, EBIT reached a record high level, growing 21% to EUR 111 million, more than compensating energy business startup costs. On slide number 16, we look at our continuous workforce evolution. Since December, the average headcount decreased to just over 118,000, excluding M&A, but taking into account new hires of 5,800 people. M&A activity added 700 FTEs to the average headcount.
HR costs per FTE are up 3% year-on-year to EUR 45,000, related to salary increase and commercial incentives, but the value added per FTE is growing at a faster rate of over 9% year-on-year, just over EUR 82,000 per FTE. Moving to group HR cost on slide number 17. Following the adoption of IFRS 17, the majority of costs borne by insurance services to remunerate the network are now spread across HR costs, COGS, and D&A. As a result, an accounting adjustment is implemented at group level, resulting in EUR 251 million lower HR costs on a reported basis in Q2 2023. Before the application of IFRS 17, ordinary HR costs were slightly higher year-on-year, with continued FTE reductions, mitigating the planned salary increase and variable compensation.
Importantly, ordinary HR cost on revenues continued to fall to 43% from 41% in Q2 2023. Moving to page 18, excluding the effect of IFRS 17 and net of M&A, non-HR costs increased by EUR 138 million. In particular, costs were up EUR 106 million, including EUR 42 million energy related costs and EUR 21 million cost inflation. D&A was up EUR 32 million due to higher CapEx, already embedded in our guidance. Finally, as a result of the strategic M&A activity, we incurred additional structural cost of EUR 130 million. Thank you for your time. Let me hand over to Matteo for the wrap up.
Thank you, Camillo. As you've just seen, the year is progressing really well, confirming, if not exceeding, the guidance. We are transforming the company into a customer-focused, digital-first, operationally efficient business with a clear path for profitable growth. We're extremely well positioned to capture supported commercial trends, yet our business is built to withstand anticipatory headwinds. This is further enhanced by our rigorous cost discipline, so that even with persistent inflationary pressure, our operating profit keeps on growing. We continue to invest, further improving our capabilities across technology, products, people, diversifying our business while preserving our rock-solid balance sheet. Finally, our leadership in Borsa Italiana ESG Index, recently announced a couple of weeks ago, confirms that our sustainability strategy is delivering value to all our stakeholders. In an environment of change, our commitments have remained constant. Stay tuned.
Massi, over to you for the Q&A.
Thank you. Let's begin with the Q&A session. To ask a question, please press star and one. To remove yourself from the question queue, please press star and two. The first question is from Antonio Reale at Bank of America.
Hi, good morning, everyone. It's Antonio from Bank of America. I have three questions, please, starting with the first one on on costs. You've shown good cost control this quarter. Can you give us an update on the HR side? How are your early talks with trade unions unfolding? Also, importantly, if you can talk about non-HR costs, particularly energy related costs. I understand you had entered into hedging contracts at the peak of the energy crisis, which have had an impact on your cost base. Can you talk about the size of this and what could be the benefit from eventually releasing the costs here going forward? That's my first question. Secondly, on your full year guidance, you've confirmed your guidance for the full year.
You've slightly changed the language around, you being on track to do better. The capital gain, of course, helps. Where would you say within your division do you see the best growth opportunity for the H2 and into next year? What do you think you need to do a bit more work on? My last question is on the insurance flows, which have been slower at the system level. Can you give us an update on what you're seeing and on your outlook for the rest of the year on your life insurance business in particular? Thank you.
Okay. Thank you, Antonio. On cost, on the HR side, clearly the big topic on the table is the new labor contract. We're starting preliminary discussions with unions. The feelings are constructive. Clearly, there is work to be done to achieve a result which is sustainable for the company, but I believe that as we have done in the past, we will be able to deliver a good contract for our employees and also for obviously, the bottom line of our company. But this is work that will take place from now to the announcement of the plan that, as you know, is expected in the last quarter of this year. On non-HR cost, maybe Camillo, please?
Yes. On non-HR costs, just to sort of set the scene, we had announced back in March, it would have had a total non-HR cost of EUR 4.4 billion. That target is obviously confirmed. You had a specific question on energy. It is true that we had two hedges in place, one on gas, which ended in Q2 2023, and one on electricity, which will end at the end of 2023. The first answer is that on electricity, we are completely covered until the end of the year, and on gas, we are being covered for the first four months of the year.
The impact of the increase of gas prices for the remaining eight months is circa EUR 20 million.
The other thing that I wanted to share as a sort of preview, is that as we have seen some relative weakness in the market, both on electricity or power, and on gas, what we have already done, and we have started to put in place hedges to be protected for 2024. As of now, we have already covered 80% of our needs of gas, and circa 50% of our needs of power for 2024 at levels that are let me say better than the ones that we had initially considered. On that front, I think we are doing well, and to the extent that there are other moments of relative weakness, we'll continue to progress with the strategy.
On guidance overall, and guidance by segment, we stated that we are in line, and maybe slightly ahead of our guidance objectives. This is supported by all businesses, as you can see in today's results, we're not only an insurance driven platform, because the other three segments are doing the lift that carrying the weight in this H1 of the year in terms of results. Where do I think we should do more work? Which I think was part of the question, Antonio Reale. I think that we need to keep pushing on the parcel side, which is clearly the growth space in Mail, Parcel and Distribution.
Happy with the results that we announced today, but I think there is more focus and more results that we need to deliver in that space for our investor, and to complete the transformation we started five years ago. Insurance flows are extremely positive, especially when compared to the rest of the market. We, in the H1, we have 3.1 positive net inflows. Hard to think that we will be delivering the same results in the H2 of the year, because we have very significant redemptions in half two, but we still target positive net inflows for the H2.
I think what is more important is that thanks to our well below market lapse rate we keep growing our market share in the segment. Very happy with the commercial trends in insurance.
That's very clear. Thank you very much.
Thank you, Antonio. The next question is from Manuela Meroni, from Banca IMI. Please, Mano.
Yes, thank you for taking my question. The first one is on the Mail, Parcel & Distribution business. We read actually is performing quite well, also thanks to the repricing. We have read that there is a new repricing action starting from July this year. I'm wondering what is the impact that we should expect in Mail, Parcel & Distribution business in the H2 of this year, and if it is enough to offset the structural decline of volumes in Mail business? The second question is, again, on Mail, Parcel & Distribution. You are generating a positive EBIT, if, even if I exclude the capital gain from sennder, and also considering that you are not cashing in capital gains on your bond portfolio.
I'm wondering if you are confident about the possibility to reach the breakeven in Mail and Parcel starting from next year? Lastly, a clarification, we may expect an update of the business plan and the guidance in the last quarter this year. Is it correct? Thank you.
Okay, I'll start with the last, first, answer. Yes, that's, the target that we're working to provide the next, plan, before the end of the year. First question, Camillo, was, mainly pricing?
Yeah. The impact of the repricing on full year is around EUR 75 million. That is a repricing that takes into account all the reprices already being put in place. To the extent that there are going to be further tenders coming out and we, you know, might revisit our pricing, there might be a number that is higher than that, but as of now, we are at EUR 75 million. With respect to what we target for year end on mail, I'd like to remind that we have a target of EUR 2 billion, which we are clearly on track to deliver on.
With respect to the ability to reach breakeven, it is true that we have had a H1 in a positive territory. It is also true that in the H2, and we also put that in the plan back in March, we do intend to take an early retirement charge of around EUR 100 million. That's what we had at the time, so it's too early to say whether we will outperform the target we put out of -0.1 for the division, but certainly we are.
... trying to do our best to beat that number.
Thank you.
Second question was on the breakeven in Mail, Parcel and Distribution this year. Yes. Yeah, as of now, we're not changing the guidance of -0.1%, which is the one we have in the plan.
Thank you, Manuela. The next question is from Gianluca Ferrari from Mediobanca. Please, Gianluca.
Yes. Hi. Thanks, Massi. Hi, good morning, everybody. The first one is on the customer's behavior in BancoPosta in particular, I was noticing EUR 1.5 billion of retail deposit outflows in the H1, with almost EUR 3 billion inflows in custody. I guess BTP Valore played an important role here. At the same time, when it comes to the CDP offer, it seems that there was a revamp in the Q2. I think they are on air with a marketing campaign offering very attractive deals. I understood you said in the speech that some of the outflows were linked to the not very attractive offer of the old products.
I was wondering why, with this set of new products, still, we are in net outflows, I think more than EUR 3 billion in Q2, so why this new set of products is not getting traction? Linked to that, what are your expectations regarding retail deposits for full year 2023? The second one is more on the insurance side, and more technical. If you can elaborate on the EUR 7 million negative from experience imbalances, is that related to expenses, claims, or what is explaining that number? Thank you.
Okay, I'll start, thank you, Gianluca, with the first question. There is a peaking amount of redemptions, early redemption of postal bonds, with gross inflows in postal bonds that are around EUR 20 billion, more or less, in the last five years. You have to consider that we're coming from a lot of bonds that were placed with zero comma interest rates at five year, 10 years, even 20 years. These are bonds that, you know, a rational market investor that can put at par should not own. That redemption comes to, you know, the postal office. We are offering new bonds.
We are clearly offering also the BTP Valore that you spotted in our asset under custody increase. That's correct. More importantly, we are offering the Offerta Supersmart, which is a 3.5% interest rate on a passbook, 270 days minimum period holding period, that has generated already EUR 3 billion inflows. All in all, we are focusing a lot on this space because we have, you know, on one end, obviously an incentive from our agreement with CDP, with specific targets on net inflows, negative, but, you know, not too negative net inflows. Two, because there are many of our clients that own these instruments.
That represents still not far from 50% of our activity in our advisory rooms, so in our advisory large offices, which means is great value for us to be able to talk to clients, even, you know, about the need to have a higher interest rate. The instrument that is held by virtually 30 million Italians is very, very important also for the goodwill and for the traffic within the office and for expanding the relationship and cross-selling additional products, profiling the clients for P&C, profiling the clients for life, and offering utility products to clients that have been, you know, investing in postal savings for many years. You, the last part-
If I can jump in. On this one, do you think that this year, we are going to be in the low end of the EUR 1.6 billion-EUR 1.8 billion range, or midpoint could be still achievable given the trend you just described?
Is a very tough environment. From what we hear, the government is planning a new BTP Valore. I think they probably announced it, if not publicly, but is in the makings in the last quarter. Clearly those big transaction are taking away deposits and flows. To answer your question, we will target it. We're putting maximum effort, you know, from... in the last few months of the year, and hopefully we will reach the mid-end of that range. It's, you know, it's certainly tough.
Thank you.
On your second question on life, maybe I...
There was a technical question on the P&C business. The number you referred to is the result of the difference between expected premia and expected sinisters and actual numbers ex post.
Okay. Thank you very much.
Thank you, Gianluca. The next question is from Michael Hutter from the Bloomberg. Please, Mike.
Fantastic. Thanks, Maxim. Thanks for the amazing presentation. Full of logic detail. I have, I only have two kind of topics, three. One is cash, the other one is how the regulator, the interaction with the regulator works on the pricing on the mail, and the third is a really kind of fishing question, really. What's the impact of all this, the, this change in weather or whatever? On the cash, in slide 23 and 24, you show lots of details. The EUR 1 billion, you show the cash position, slide 23, slide 24, you show a figure of EUR 810. Sorry, it's actually a flow figure, so dividends and other movements. And I just wondered if you, if you could explain how the cash works, how the outlook works.
It's just that I'm normally used to positive cash figures, and some of these are negative, so I have to get my head around it, and I find it really hard. Maybe if you can kind of give an indication where you expect to land or something at the year-end or where your targets would be. The second is on pricing on mail, and this is a question from a client. He was wondering whether, you know, the and you gave these lovely figures, EUR 75 million, I think EUR 100 million for next year, in terms of pricing impact on revenue in mail. How does that work with the regulator? Do you go and say, well, I want EUR 1 billion, and the regulator says 0, and then you negotiate?
Is there a kind of preconception that the regulator says, well, if the volume is down, X%, then the pricing will offset maybe all of it, except maybe 1% or 2%. Then the final is, the weather impact. How does that affect the behavior of your customers, which is like half of Italy? Do they go more to the post office, less to the post office, more card payments? I mean, how, what's, how... Anything would be interesting. Thank you.
Okay. On pricing, it's relatively straightforward because the portion of mail products that is subject to public pricing limit, because they belong to the universal service perimeter, is relatively small compared to the rest of the revenues. So the repricing really comes from commercial activity. Commercial activity that is mainly participating into public and private tenders. And we have started a commercial repricing exercise already two years ago, coming out of the COVID, with, you know, clearly an inflation justification.
With the fact that, you know, if we reach EUR 2 billion revenues for 2.2, more or less, items we deliver, it means that we cash in in terms of revenues EUR 0.8 per item. If you think about our EUR 0.9, if you think about what it takes to deliver one single item, when you get the bulk of all the items to be delivered, you have to take a shift the boxes into the sorting machine. Take the letters from the sorting machine and put them into a truck. Travel more or less, as actually, on average, 300 kilometers.
That's the average trip of any letter, and then get to into a delivery sender, center, and have a letterman and somebody helping him, preparing the trip, and then doing the last mile delivery. All this process is paid in terms of revenues, EUR 0.9. That if you're delivering every time you stop, Michael, 10 items, then it means, you know, EUR 9 revenues, you're, you know, you are in the money. When you are in a country today where you have one item deliver per head every 10 days, it starts to be, you know, difficult to sustain.
The pricing going up is market-based, obviously for the portion of regulated products, we also have interaction with the regulator that is allowing us the increase. I will take the weather behavior and let Camillo expand on our cash flow, cash, and, you know, financial position. Not a lot. We look at the more recent data on postal office traffic, and we don't see any reduction because of the heat. No particular, you know, sign, you know, obviously beyond what we have seen with the flood in Emilia-Romagna a couple of months ago. That clearly affected the region, because we had to close a few offices and many roads were closed, and that had a marginal impact.
The general weather, is not impacting, we're not seeing any evidence of any impact, from the weather. Please, Camillo.
Yeah.
Thank you.
With respect to our cash position, I mean, what you have rightly pointed to is slide number 24, where we basically show what is the flow across the group of cash. We think of Mail, Parcel & Distribution as really the holding company, which generates free cash from operations, receives dividends from the subsidiaries, and then pays dividends to shareholders, and typically also funds CapEx of the group. What you can see in the sort of middle part of the slide, is that the operating performance of the group has generated in the first six months, EUR 429 million of cash, after receiving and paying dividend.
Remember that these figures are at the end of June, we paid our two-thirds of the dividend third week in June. What this shows you basically, is if you exclude the impact of IFRS 16 on leasing and other, you see that the net financial position of Mail, Parcel & Distribution improved from EUR 1.4 billion at the beginning of the year to EUR 993, all negative. We have reduced that in effect. What we expect for the second part of the year is that the numbers will remain in this neighborhood, is going to be around +EUR 500 on the full year.
As you might have seen, that we have spent EUR 232 million in the H1 of CapEx. CapEx for the full year are a number that is closer to EUR 700 million-EUR 800 million. We expect that that will impact also our cash position, as there is some seasonality in the CapEx. You should assume for full year, around half a billion EUR of capital of positive cash generation through the group, after paying also the should add that is important, after paying also the anticipated dividend that we have in, as we have every year in November.
That's very clear. Thank you so much. Yes, just Michael, the, the most important thing when you look at cash, is what Camillo said at the beginning of his answer. We have four segment, reporting segment, when it comes to cash and net financial position, you have to consider Mail, Parcel & Distribution as the holding company. Okay? Excellent. The other three are subsidiaries that are contributing with a dividend and in the past have also benefited from, you know, capital support by debt and equity from the holding company. Thank you. Super clear. Thank you.
Thank you, Mike. The next question is from Gianmarco Rancina, from Equita. Please, Gianmarco.
Yes, good morning. A few questions, please. The first one, just a clarification on your guidance on the EUR 2.5 billion EBIT. You include or you exclude this now EUR 109 million sennder gain? In the H2, apart from the EUR 100 million provision for the early retirement, shall we expect you will book some other, let's say, provision or negative one-off items, given that clearly you are performing much better than the run rate to achieve the guidance, but maybe you are expecting also to have some extra provision, or maybe just in terms of cost phasing, if you can comment? On Eurovita, if you can comment, how is your stance regarding the situation here?
Lastly, on the parcel, because clearly we have seen some weaker volumes in general in the market, and you were hinting before at some specific actions you wanted to take to revive the growth. If you can, maybe give also some color on this topic. Thank you.
Okay, I will answer on Eurovita and let Camillo. On Eurovita, I would say nothing more than what it has been announced publicly. There are five insurance companies, and maybe a discussion to expand this group at the moment, that will take the insurance portfolios from the old Eurovita, and run the respective portfolio going forward. With the support of distributing banks that are in the game, that will provide loans and liquidity to every single insurance that become the manager and the owner of those liabilities, so those insurance contracts and pro rata, also obviously the owner of the assets that are related. Please, Camillo.
With respect to other one-off charges in the H2 of the year, at this stage, we have no visibility of any other one-off charge, with the exception of the early retirement one, which we'd already mentioned. That was, I think, was one question you had. You had one question around parcel performance. I'd say that, you know, we expect the H2 of the year to be robust. At this stage, we are confirming the target revenue of EUR 1.4 billion for the year, but remember, in the H2, we have, obviously, greater seasonality as the holiday season approaches. We also, I think there was also some press on that point.
We are starting to work with Acqua & Sapone, which will start to perform in H2 of the year. We expect a more dynamic performance on parcels. You had a question on sennder. Sennder gain was not in our guidance when we presented the plan in March.
Thank you.
Thank you, Marco. The next question is from Ashik Musaddi from Morgan Stanley. Please, Ashik.
Yeah, thank you. Good morning, Maxine. Good morning, Matteo, Camillo. Just couple of questions I have is, first of all, if I look at the insurance new business CSM, there was a significant pickup in the CSM that you generated in Q2 versus Q1. I mean, Q1 was about EUR 300, and Q2 was about EUR 600. Any color on what happened, why has the new business CSM so high in Q2 versus Q1? That's the first one, and second thing is, I mean, you have been very consistent with respect to the deposit beta, that given that, your average deposits from the retail customer is like EUR 6,000, you don't really see any pressure on the, on increasing interest rates on the deposits, et cetera.
Any color, any additional color or update you can give on that, where we are at the moment, any change to that view would be very helpful. Thank you.
Thank you, Ashik. I'll start with the beta. It's not only the fact that the average size of our deposits is significantly lower than the market average. I think, you know, what makes us more resilient and less sensitive to interest rate is that we are actually offering a bit like, you know, in the US market, the checking account and the saving account. We have, as I mentioned before, the Offerta Supersmart, which is a postal pass book. We have other offers in postal savings, which are targeted to those clients that have money in the checking account, and that they have, you know, interest to see some remuneration of that balance.
We can offer the alternative in-house, and that, I think, reduces the beta. On the CSM increase, which I think is certainly good news, but please, Camillo.
Well, beyond the operating performance of our sales force, which contribute to this number, there is a perimeter effect as we are consolidating from the 1st of April, Net Insurance, which brought in EUR 100 million of that EUR 515. There is a consolidation effect that played also to our advantage.
Thank you.
Thank you. The last question from the call is from Domenico Santoro. Please, HSBC, please.
Hi, good morning. Thanks for the presentation and all the details. A very simple question on the NII first, given that nobody has asked. I just wonder, from this level of NII in Q3, if you have to imagine, you know, rates up by another 50 basis points or whatever, can you give us, you know, the probable evolution in the H2 of the year? You said during the call that part of the portfolio is edged. I'm just wondering whether you're talking about, you know, swapping securities into floating rates, or at this moment, there is also a chunk of deposits that might be edged. We're talking about micro edge.
On this, on this item, is this the, is the sensitivity, at this point of the NII to interest rates symmetric? The same, if rates, they go up by 50 basis points, or they go down, with a different sign, or the presence of micro edge, it makes basically the sensitivity not symmetric. Just to understand a little bit. What could happen in the case in 2024, we see rates, coming down. If we have to assume that you apply, a fixed payout ratio, to your net profit, I just wonder whether these are one-off items or whatever sign, positive or negative, they go into the, attributable net profit. Thank you very much.
Okay, thank you. I'll start with the second question. We don't have a payout rule for dividends, but we have a fixed growing dividend. As I stated in my previous call, part of the work we are doing with the new plan is also on dividend policy. Obviously, the one-off will be considered when we will announce the new plan together with the new dividend policy. There's not much more, sorry, I can say at this point in time. On III, first of all, we have today our portfolio, which is around 65% fixed and 35% variable.
Out of that, based on that figures, a increase of 100 basis point on the base rate would translate on a full year basis of, in an increment of 5 basis point on the overall return on the portfolio. 5 basis points, 100 basis points increase. Would that number change, i.e., as opposed to being +100, go to -100, the impact on our portfolio would be 3 basis point, negative 0.03. +100, 5 basis point incremental, -100, 3 basis point less.
With respect to your question on edges, we do not have any macro edge, but the edges that we have is that we have swapped in a forward start form, some BTPs to variable, and we are actually in the process of unwinding some of those edges in place as we see the current rate constructive to closing these edges and fixing a fixed rate on a greater part of our portfolio, compared to the 65%, which we have in 2023.
That's all. Thank you. The last question is from the webcast platform. It's from Elena Perini from Intesa Sanpaolo. The first one is on insurance services. Can we expect on the IFRS 17, a more stable and visible trend in quarterly EBIT, as the most relevant contribution comes from life, mainly driven by CSM release? The second question is, how has free Q started in terms of life insurance net inflows?
I mean, the answer to the first question, Elena, is yes, especially on the back of our growing commercial and distribution focus. In terms of the Q3, we are basically one month into the Q3. We see in insurance the trend that we've been seeing in the first six months. Above budget, better than last year, we're still doing relatively well in July.
That's all.
Thank you for your time, and let me take finally, this opportunity to introduce you to Giuseppe Esposito, that is here with us, who will be taking over from Massi as Head of Investor Relations for from the next quarter. I have to thank Massi, that has done a tremendous job, and will be moving ahead into the role of Head of Planning and Control. Big responsibility for him and still going to talk numbers more internally, than with you, but he's still around. You'll see him, he's always going to be present in the calls, and he's also going to be part of our physical roadshow.
Giuseppe has extensive investment banking experience, has been head of our M&A department for four years, and he's the one that has brought to completion the 15 transaction that we have done. He knows the firm, he knows the space, and we wish all the best to Giuseppe as well. Thank you for your time.