TMICC reported full-year revenue of €7.9bn (€8.0bn expected), reflecting underlying sales growth of 4.2%. The miss was driven by softer than expected volume growth.
Underlying cash profit (EBITDA) fell 6% to €1.3bn. This was below market expectations due to unfavourable currency moves and higher-than-expected service agreement costs with Unilever.
Free cash flow fell 95% to €38mn due to separation costs. Net debt rose from €0.3bn to €3.0bn due to payments to Unilever to complete the separation.
In 2026, organic sales growth is expected to land in the 3-5% range. Underlying cash profit margins are expected to improve by 0.4-0.6 percentage points.
The shares fell 13.9% in early trading.
Our view
The Magnum Ice Cream Company (TMICC) delivered its first set of results since its separation from Unilever. Regulatory restrictions prevented the group from issuing full-year guidance before results. As a result, the group’s performance missed some fairly unreliable market expectations, and shares fell sharply on the day.
TMICC is the largest ice cream business in the world, with iconic brands like Magnum, Ben & Jerry’s, Wall’s and Cornetto in its portfolio. It currently holds a 21% share of global ice cream sales, nearly double that of its largest competitor, Froneri.
The global ice cream market is forecast to grow by 3-4% annually until at least 2029. TMICC is targeting growth slightly ahead of this pace, up to 5% annually, driven by increased marketing investment, improved distribution channels and market share gains.
The near-term focus is likely to be on improving operational efficiencies as it steps away from Unilever and begins to stand on its own two feet. The group’s hoping to trim around €500mn of costs through streamlining its operations and simplifying its supply chains.
Developed markets like Europe and the US remain its main regions, accounting for around three-quarters of the group’s sales in 2025. Performance is likely to remain seasonal, with higher consumption of its products in the warmer summer months of the northern hemisphere.
Less developed markets account for the remainder of its sales. While it’s a smaller slice of the pie currently, it contributes a disproportionately large portion of profits thanks to its exposure to higher-priced and higher-margin products. With such a huge untapped customer base, it’s where we see the biggest growth opportunity if TMICC can nail its execution in these regions.
Despite paying some hefty separation costs to Unilever, TMICC remains free cash flow positive and profitable in its own right. The balance sheet is in decent shape, but dividends are off the cards until 2027 as the group finds its footing as a standalone business.
Overall, we view TMICC as a strong business with a dominant market share. There’s a big long-term opportunity if the group can streamline operations, and its brand investments land well in emerging markets. At face value, the valuation looks attractive compared to peers. But there’s no guarantee of success. One-off separation costs and execution risks are likely to weigh on sentiment in the near term.
The Magnum Ice Cream Company key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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