Magnum Ice Cream H1 Earnings Call Highlights

Key Points

• First-half organic sales grew 4.7% to EUR 4.7 billion, driven by balanced volume and pricing gains across regions and major brands. Adjusted EBIT rose 7.5% to EUR 716 million, while the margin improved to 15.3%.
• Free cash flow nearly doubled to EUR 273 million, and the company delivered EUR 90 million in productivity savings. Net debt remained at 2.5 times adjusted EBITDA, in line with its capital-allocation policy.
• Management reaffirmed its full-year outlook for 3%–5% organic sales growth and 40–60 basis points of comparable adjusted EBITDA margin improvement, while expecting lower cocoa costs and improved finance costs in the second half.

Magnum Ice Cream NYSE: MICC reported first-half 2026 organic sales growth of 4.7%, supported by balanced gains in volume and pricing, innovation across its major brands and productivity savings.

Revenue totaled EUR 4.7 billion, compared with EUR 4.5 billion a year earlier. Organic sales growth included 2.5% volume growth and 2.2% pricing growth, building on a 5.8% organic sales growth comparison in the first half of 2025. Reported revenue growth was 4.2%, as acquisitions added 2.3 percentage points while foreign exchange translation reduced growth by 2.7 percentage points.

“The ice cream category keeps growing, and we outperformed it by achieving growth of 4.7%,” CEO Peter ter Kulve said. He said growth was delivered across regions and the company’s global brands, while the key summer selling period had begun strongly.

Profitability and Cash Flow

Adjusted EBIT rose to EUR 716 million from EUR 666 million in the prior-year period, while adjusted EBIT margin improved 50 basis points to 15.3%. Adjusted EBITDA increased to EUR 880 million from EUR 853 million, although adjusted EBITDA margin declined to 18.7% from 19.0%.

CFO Abhijit Bhattacharya said the EBITDA margin was affected by transition service agreements, or TSAs, and the company’s acquisition in India. TSAs reduced margin by 70 basis points because depreciation costs that had previously been allocated are now recorded as cash costs. The India acquisition reduced margin by another 30 basis points.

The company generated EUR 273 million in free cash flow, up from EUR 138 million a year earlier, driven principally by working-capital movements and higher EBIT. On a comparable basis excluding factors related to the separation from Unilever, free cash flow was EUR 99 million, compared with EUR 72 million a year earlier. About 40% of first-half capital expenditures related to freezer cabinets.

Net debt stood at 2.5 times adjusted EBITDA at the end of the first half, in line with the company’s capital-allocation policy.

Regional Results and Brand Innovation

Europe and Australia/New Zealand posted 4.1% organic sales growth, led by France and the U.K. France recorded double-digit growth and the U.K. delivered mid-single-digit growth. The company said it stabilized share in Italy after a prolonged decline, where it is continuing a turnaround plan. Europe and ANZ adjusted EBIT margin improved by 100 basis points.

The Americas grew 3.2% organically, with market-share gains in the U.S. and Mexico, while Brazil remained in decline. Reported revenue in the region fell 1.1% because of a 4.1% foreign-exchange headwind. Ter Kulve said U.S. growth was being driven by handheld, portion-controlled and calorie-controlled products, while traditional bulk vanilla ice cream consumption has been declining.

AMEA, which includes Asia, the Middle East and Africa, grew 7.6% organically. Turkey, Pakistan and India delivered double-digit growth, while Indonesia grew at a mid-single-digit rate. China’s growth was moderated by unfavorable weather late in the period. AMEA adjusted EBIT margin declined 190 basis points, reflecting material-cost inflation, measures imposed by the Turkish Competition Authority and the acquisition in India.

The Turkish authority’s interim measures require 30% of the company’s freezer cabinets in certain small retail outlets to be allocated to competing products or left empty. Ter Kulve said the company is complying with the requirements and does not expect its healthy Turkish margins to deteriorate as a result.

The company said its four leading brands—Magnum, Ben & Jerry’s, Cornetto and Heartbrand—each contributed to growth. Magnum delivered mid-single-digit growth, supported by the Magnum Signature La Pistache launch. Ben & Jerry’s grew at a mid-single-digit rate and accelerated to 9.2% growth in the second quarter across its Americas and European business, aided by new stick and sandwich formats.

Cornetto delivered low-single-digit growth, affected by weaker conditions in China during the final two months of the period. Ter Kulve said the company is expanding Cornetto into premium cones, sandwiches and sticks. Heartbrand grew at a mid-single-digit rate, supported by Solero and Volcanix products.

• Yasso pints in the U.S. delivered six consecutive quarters of double-digit growth.
• Ben & Jerry’s sticks represented four of the top 10 super-premium novelties in the U.S., according to the company.
• Ben & Jerry’s sandwiches were the No. 1 new impulse ice cream product in the U.K., management said.
• Digital commerce maintained double-digit growth, while at-home and away-from-home channels each grew at a mid-single-digit rate.

Productivity, India Investment and Outlook

Magnum Ice Cream delivered EUR 90 million in first-half productivity savings, including EUR 70 million from supply-chain initiatives and EUR 20 million from overhead. Management said savings came from waste reduction, better factory utilization and supply-chain debottlenecking. The company remains on track to deliver EUR 500 million in medium-term savings.

In India, management said it has rebuilt the organization and sales system, adjusted pricing, moved products from vegetable fat toward dairy recipes and expanded its freezer cabinet network. The company placed 50,000 cabinets last year and expects to place another 50,000 this year. Ter Kulve said India remains loss-making while the business is being built, but profitability should improve with scale and additional factories.

The company reaffirmed its full-year outlook, including:

• Organic sales growth of 3% to 5%.
• Adjusted EBITDA margin improvement of 40 to 60 basis points on a comparable 2025 perimeter.
• Reported adjusted EBITDA margin improvement of zero to 20 basis points, primarily reflecting the India acquisition.
• An adjusted effective tax rate of about 27%, excluding prior-year tax settlements.
• Net finance costs of about EUR 160 million, improved from prior guidance of EUR 180 million.

Bhattacharya said cocoa costs should ease during the second half as the company moves beyond higher-priced purchases used in the first half, while management continues to expect a modest improvement in profitability for the year.

About Magnum Ice Cream (NYSE:MICC)

The Magnum Ice Cream Company N.V. engages in ice cream business. The Magnum Ice Cream Company N.V. is based in Amsterdam, Noord-Holland, Netherlands.

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