EANS-Adhoc: VIG switches from full consolidation of non-profit societies to equity method following regulatory changes EAE

11/18/2019, 1:58 PM (Source: euro adhoc)
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18.11.2019

Vienna -

* Management confirms 2019 targets
* Net profit expectation and dividend policy remain unchanged

Since September 2016, the VIG majority-owned non-profit housing societies have
been fully consolidated in the Group financial statements. In the meantime, the
legal situation has changed, particularly due to the amendment of the Austrian
Non-Profit Housing Act (Wohnungsgemeinnützigkeitsgesetz - WGG Amendment 2019,
BGBl I 85/2019), which has further significantly restricted the exercise of
ownership and control rights. Subsequently, the Management Board took during its
meeting on 18 November 2019 the decision that control over the non-profit
housing societies of VIG according to IFRS can no longer be considered. As a
result, the non-profit housing societies are to be deconsolidated as of 31 July
2019 and their accounting treatment has to be changed to the equity method in
accordance with IAS 28. Therefore, the share of profit of non-profit housing
societies not attributable to VIG shareholders will no longer be included in
both the financial result and the profit before taxes as of 1 August 2019.

This implies that the real estate of the non-profit housing societies (around
EUR 3.8 billion), related financing liabilities (around EUR 2.7 billion) and the
shareholders' equity special item "non-controlling interests in non-profit
societies" (approximately EUR 1.2 billion) will no longer be reported in the
consolidated balance sheet. These changes will be incorporated in the results to
be published for the first nine months of 2019.

The change in consolidation does not have any impact either on Group results
after taxes and non-controlling interests or on earnings per share.

For 2019, VIG's profit before taxes' target remains unchanged in the range of
EUR 500 to 520 million, including the profit contribution of the non-profit
housing societies until deconsolidation with effect from 1 August 2019. Further
adjusted guidance will be prepared in the course of the planning process and on
the basis of the positive development of the Group.

The dividend policy of VIG will continue to be based on the result after taxes
and non-controlling interests, with the payout ratio ranging unchanged between
30% to 50%.

The following securities of VIG are admitted for trading on a regulated market:

ISSUE TITEL                ISIN         TRADING SEGMENT
Share                      AT0000908504 Vienna and Prague Stock Exchange,
                                        Official Market
VIG subordinated bond 2015 AT0000A1D5E1 Luxembourg Stock Exchange, Second
                                        Regulated Market
VIG subordinated bond 2013 AT0000A12GN0 Vienna Stock Exchange, Second Regulated
                                        Market


Further inquiry note:

VIENNA INSURANCE GROUP AG
Wiener Versicherung Gruppe
1010 Vienna, Schottenring 30

Wolfgang Haas 
Head of Group Communications & Marketing, Spokesperson of the Group
Phone: +43(0)50 390-21029
Fax: +43 (0)50 390 99-21029
E-Mail: wolfgang.haas@vig.com

Nina Higatzberger-Schwarz
Head of Investor Relations
Phone: +43 (0)50 390-21920
Fax: +43 (0)50 390 99-21920
E-Mail: nina.higatzberger@vig.com

end of announcement                         euro adhoc
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issuer:       Vienna Insurance Group AG Wiener Versicherung Gruppe
              Schottenring 30
              A-1010 Wien
phone:        +43(0)50 390-22000
FAX:          +43(0)50 390 99-22000
mail:         investor.relations@vig.com 
WWW:          www.vig.com
ISIN:         AT0000908504
indexes:      VÖNIX, WBI, ATX
stockmarkets: Wien, Prague Stock Exchange
language:     English

EAX0002    2019-11-18/13:58

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