First-half revenue came in at €4.7bn (€4.6bn expected), up 4.7% on an organic basis, with all regions contributing positively. Volumes rose 2.5%, with higher prices contributing the remainder.
Adjusted cash profit (EBITDA) rose at a slightly slower pace of 3.2% to €0.9bn (€0.9bn expected), as margins were weighed down by the India acquisition, and cost inflation was offset by productivity savings.
Free cash flow increased from €138mn to €273mn. Net debt rose from €3.0bn to €3.3bn, largely because of acquisitions.
For 2026, organic sales growth is still expected to be between 3 and 5%, and underlying cash profit margins are expected to improve by 0.4-0.6 percentage points.
The shares fell 4.2% in early trading.
Our view
The Magnum Ice Cream Company (MICC) started the year off relatively well, with sales growth landing toward the top end of its full-year guidance. But investors chose to focus on signs of softening volumes in some regions, as well as the potential for further cost inflation, leading the shares to slip lower on the day.
MICC 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 to 4% annually until at least 2029. MICC 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 group is hoping to trim around €500mn of costs through streamlining its operations and supply chains as it steps away from Unilever and begins to stand on its own two feet. Good early progress has been made, but its impact so far has largely been offset by higher costs, so product innovation and marketing remain key to passing on cost inflation to customers.
Developed markets like Europe and the US remain its main regions, accounting for nearly three-quarters of the group’s sales. 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. Although it’s currently a smaller slice of the pie, it contributes a disproportionately large share of profits thanks to its exposure to higher-priced, higher-margin products.
With such a huge untapped customer base, these emerging markets are where we see the biggest growth opportunity if MICC can nail its execution. Although volumes here did slow significantly in the first half, it looks more like unfavourable events in key regions than an underlying trend, but it’s something we’ll be keeping an eye on.
Despite paying some hefty separation costs to Unilever, MICC 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 MICC 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 isn’t too demanding 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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