What Magnum Ice Cream (MICC) Said on Its Q3 Earnings Call

Key Points

• Strong Q3 performance: Revenue rose 12.1% to €2.5 billion, driven by 9.6% organic growth and 7.3% volume growth. Growth was broad-based across regions, with Asia/AMEA up 17.6% and Europe and Australia/New Zealand up 8.9%.
• Raised sales outlook: Magnum Ice Cream increased its full-year organic sales growth forecast to approximately 5.5%, from 3% to 5%, while maintaining its adjusted EBITDA margin improvement targets despite energy-cost pressures.
• Innovation and distribution remain growth drivers: New products contributed more than 10% of year-to-date revenue, while the company expanded its global freezer-cabinet network by 4%. Management cited strong demand and some out-of-stocks, but expects fourth-quarter sales to be roughly flat year over year due to seasonal factors.

Magnum Ice Cream NYSE: MICC reported third-quarter revenue growth of 12.1% to €2.5 billion, driven by organic sales growth of 9.6% and volume growth of 7.3%, as the company gained market share across its regions and benefited from strong demand during the summer season.

CEO Peter ter Kulve said all regions delivered growth, while an extended European summer added an estimated 2% to 3% to global sales during the quarter. The company raised its full-year organic sales growth outlook to approximately 5.5%, from a prior range of 3% to 5%, while maintaining its margin outlook.

Volume Growth Leads Quarterly Performance

Reported revenue growth included a 2.6% contribution from acquisitions. Organic growth was supported by 7.3% volume growth and 2.2% pricing, according to ter Kulve.

Europe and Australia/New Zealand posted 8.9% growth, helped by product launches, market-share gains and favorable weather. France and the U.K. and Ireland recorded double-digit growth, while Magnum and Ben & Jerry’s also grew at double-digit rates in the region. The company said European pricing was lower, largely because of channel mix and the timing of promotional spending.

Sales in the Americas rose 3.9%, including 2.3% volume growth. Ter Kulve said the company focused on handheld and premium offerings, with Yasso, Ben & Jerry’s and Popsicle contributing to growth. Yasso grew 30% in the quarter, he said, after several years of expansion.

Asia/AMEA sales increased 17.6%, supported by freezer-cabinet expansion, innovation and execution in markets including Pakistan, India and Turkey. China remained affected by unfavorable weather and shifting retail channels, however.

“Our first summer season as a standalone company shows the impact our strategy is having on performance,” ter Kulve said, citing share gains across all regions and volume growth ahead of the broader ice cream category.

Innovation and Distribution Remain Central to Strategy

More than 10% of year-to-date revenue came from new products, the company said. Its innovation strategy includes upgrades to core products, new flavors, formats for additional consumption occasions and products positioned around new benefits.

Ter Kulve highlighted Magnum La Pistache as the top ice cream innovation in Europe, saying it exceeded the company’s expectations. Ben & Jerry’s new stick products ranked among the top 10 innovations in the U.S., while the brand’s sandwiches ranked within the top five innovations in Europe, according to the CEO.

The company is also expanding formats across premium brands, including Magnum Cones, Solero Bonbons and Yasso pints. Ter Kulve said Yasso has surpassed €500 million in sales and cited the brand’s protein-focused positioning as an example of changing consumer demand.

Magnum Ice Cream operates roughly 3 million freezer cabinets globally and expanded its fleet by 4% this year. The company said its cabinets generate average annual revenue of €1,200 to €1,300 each, and that the 4% expansion contributes around 1% to growth. Investment has been concentrated in higher-growth AMEA markets.

Ter Kulve said the company had experienced out-of-stocks in certain markets and customer accounts during the third quarter amid strong demand and heat waves. Management is working with retailers on measures including increased store deliveries, additional backroom capacity and refrigerated containers in high-demand locations.

Margin Outlook Maintained Despite Energy Costs

The company maintained its expectation for comparable-perimeter adjusted EBITDA margin improvement of 40 to 60 basis points for the full year. Reported adjusted EBITDA margin is expected to improve by zero to 20 basis points, primarily reflecting the impact of an acquisition in India.

CFO Abhijit Bhattacharya said oil and energy costs represented roughly a 70-basis-point headwind for the full year. He said productivity gains, some commodity tailwinds and operating leverage are expected to offset those pressures.

For the second half, the company expects approximately 70 basis points of margin improvement despite an estimated 100-basis-point impact from oil costs. Ter Kulve added that Magnum Ice Cream continues to invest in brands and customer support.

Looking ahead, management expects approximately 6% cost-of-goods inflation next year, or about €180 million, split evenly between developing and developed markets. Bhattacharya said energy costs, as well as dairy, chocolate and other inputs, are included in retailer pricing discussions.

Regional Developments and Technology Transition

In Turkey, ter Kulve said the company met its growth targets after adapting to measures imposed by the Turkish Competition Authority. The company expanded into new sales channels, developed a 3,500-unit scooping business, increased hard-discount distribution and added out-of-home outlets. He said premium innovation also supported margins in the market.

In China, management said its established convenience-store and hypermarket channels have faced pressure as snack-focused stores have expanded rapidly. Ter Kulve said the company is adapting its trade structure, investment and innovation to serve that channel, particularly in lower-tier cities. He said there were no inventory overstock issues in China.

In India, Magnum Ice Cream is transitioning much of its portfolio toward dairy ice cream, adjusting prices to target popular price points and changing distribution toward a cabinet-based model. Ter Kulve said most of the portfolio is expected to be dairy-based by next year.

The company also plans to begin implementing a new IT system in the U.K., Hungary and Romania on Nov. 1. Bhattacharya said it expects to complete further rollouts next year and exit transition service agreements before the end of 2027. Pre-buying connected with the technology rollout represented less than 50 basis points of impact in the third quarter, he said.

For the fourth quarter, management expects sales to be roughly flat compared with last year, reflecting the company’s seasonal sales pattern and a smaller quarter concentrated in developed markets.

About Magnum Ice Cream (NYSE:MICC)

Magnum Ice Cream N.V. is a global ice cream company formed through the separation of Unilever's ice cream business. The company develops, manufactures and markets packaged ice cream products across multiple categories, including indulgent treats, family ice cream and everyday refreshment products.

Its portfolio includes well-known brands such as Magnum, Wall's, Ben & Jerry's, Cornetto, Carte d'Or, Solero and Breyers, although brand availability varies by market. Products are sold through retail, convenience, food-service and other distribution channels in markets around the world.

Magnum Ice Cream is headquartered in Amsterdam, the Netherlands.

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