Financial result, profit before taxes and cash flow

Financial result

A brief presentation of the financial result (excluding at equity consolidated companies) is included in Note 29 “Financial result” of the notes to the consolidated financial statements.

VIG earned a financial result (incl. the result from at equity consolidated companies) of EUR 1,074.90 million in 2015. This year-on-year decrease of 3.8% was primarily due to the lower ordinary financial result due to the current low interest rates.

Profit before taxes

The achieved profit before taxes generated in 2015 was primarily negatively affected by the impairment of IT systems of EUR 195.00 million (2014: EUR 50.00 million) and the impairment of goodwill in Romania in the amount of EUR 52.02 million. In addition, goodwill was reduced by EUR 14.20 million due to a change in segment reporting and insurance portfolios were reduced by EUR 18.74 million as a result of impairments mainly in Poland. The significantly lower financial result also affected the Group’s profits before taxes, which totalled EUR 172.10 million in 2015. This represents a decrease of 66.8% in comparison with 2014.

Many countries, however, achieved very large increases in profit development, such as Austria (+25.5%), Macedonia (+138.6%), Serbia (+24.4%), and Hungary (+18.0%).

Cash flow

Cash flow from operating activities was EUR 1,118.61 million in 2015, compared with EUR 1,543.28 million in 2014. The decrease results primarily from the reduction of single premium products in Poland and the Czech Republic. The cash flow from investing activities improved to EUR -887.67 million (2014: EUR -1,145.79 million), but this is mainly due to much lower investment in bonds and land and buildings. Vienna Insurance Group’s financing activities in 2015 generated a cash flow of EUR 91.73 million. (2014: EUR -318.73 million). The increase in comparison with 2014 results from the issuing of a subordinated bond of EUR 400 million. The Group had cash and cash equivalents of EUR 1,103.23 million at the end of 2015 (2014: EUR 781.99 million). Vienna Insurance Group received a total of EUR 950.65 million in interest and dividends in 2015 (2014: EUR 970.66 million).