The Magnum Ice Cream Company N.V. Q4 FY2025 earnings call

Key Points

• 2025 was a foundational year with 4.2% organic sales growth and 1.5% volume growth despite macroeconomic challenges and 380 basis points commodity inflation.
• Completed demerger, setting up the business with the right structure, governance, talent, and culture.
• Strategy built on 3 pillars: growth, productivity, and reinvestment. Growth strategy includes market-making innovation, competitive pricing, rolling out premium brands, and digital demand creation.
• Productivity program delivered EUR 180 million savings in 2025, cumulative savings EUR 250 million. Overhead reduction and tech-enabled productivity were key actions.
• Strong brand performance across regions: Magnum outperformed with Utopia and BonBons launches; Ben & Jerry gained share in the U.S. and Europe; Cornetto grew in top markets; Heartbrand saw growth through socially first innovations. Yasso and Breyers also showed growth in new formats.
• Region-specific performance: U.S. gained share for the second consecutive year; Europe and ANZ had 3.3% growth with strong innovation and operational rigor; EMEA had double-digit growth; China and Indonesia saw high single-digit growth with improved channel and customer execution.

In 2025, The Magnum Ice Cream Company delivered a solid performance with full year organic sales growth of 4.2% and volume growth of 1.5%. Geographically, all regions contributed to growth. Europe, Australia and New Zealand saw a solid growth of 3.3% led by strong innovations, strategic pricing, and improved execution. EMEA (Asia, Middle East and Africa) grew double-digit, with strong momentum in markets like Turkey, Pakistan, China, and Indonesia. The Americas were resilient with market share gains and distribution expansion, with the U.S. seeing 1.7% volume growth. Brazil showed early signs of improvement after resetting the team, promotional, and pricing strategy.

Forward-Looking Statements

• Organic sales growth for 2026 expected to be between 3% to 5%.
• Adjusted EBITDA margin improvement of 40 to 60 basis points on a comparable perimeter basis in 2026. Reported improvement expected to be 0 to 20 basis points primarily due to the anticipated acquisition of the India business in the first half of 2026.
• Improvements weighted more in the second half of 2026 due to phasing of transitional service agreements (TSAs) and commodity price trends.

Risks

• Macro-economic uncertainty impacting market conditions.
• Fluctuations in commodity prices, particularly cocoa, which affected profitability in 2025 and could continue to impact 2026.
• Impact of transitional service agreements with Unilever, including noncash cash depreciation and royalty headwinds.
• Challenges in specific regions like Brazil, where the business was a work in progress and required significant restructuring and resetting of strategies.

Q: Warren Ackerman from Barclays on EBITDA margin guidance and India's impact A: Peter and Abhijit discussed that the acquisition of India, which had EUR 200 million turnover with 0 EBITDA last year, would cause a headwind. The reported EBITDA margin improvement in 2026 is expected to be 0 to 20 basis points due to India's acquisition and TSA phasing.

Q: Celine Pannuti from JPMorgan on margin expectations and FX impact A: Abhijit explained that overheads increased by 20 basis points due to double run costs and TSA-related temporary service agreements. Adjusted EPS is expected to be flattish or slightly up on an adjusted basis when taking out FX effects.

Q: Jeff Stent from BNP Paribas on 2025 profit alignment with expectations and EPS A: Peter stated 2025 profits were in line with expectations helped by the productivity plan. Abhijit clarified that adjusted EPS is expected to be flattish or slightly up considering adjusted earnings and FX effects.

Q: David Roux from Morgan Stanley on margin expansion ambitions and reinvestment A: Abhijit explained that reinvestment includes step-up in CapEx, adding dedicated sales force, and making A&P more efficient. CapEx ended at 4.5% as per plan, and sales force investment included 1,000 new people.

Q: Karel Zoete from Kepler Cheuvreux on cash flow and Latin America A: Peter discussed Brazil's progress with new management and factory efficiency improvements. Abhijit explained that working capital management is roughly flat year-on-year due to interim operating model complexities but operational working capital is managed tightly.

Q: Bingqing Zhu from Rothschild & Co Redburn on EMEA market share and freezer progress A: Peter mentioned EMEA gained share through innovation, pricing, and execution in markets like China, Indonesia, and Pakistan. Progress on freezers included increased distribution and optimization in various regions.

Q: David Hayes from Jefferies on U.S. food voucher impact and freezer rollout A: Peter discussed temporary impact of food stamps in the U.S. on Q4, which recovered by year-end. Freezer rollout included optimization and investment in regions like India, with a part of new freezers going to high-growth areas.

Q: Antoine Prevot from Bank of America on Europe pricing in 2026 A: Peter stated Europe is price competitive with volume-led growth expected, leveraging mix and continued volume growth as consumers trend towards premium and portion-controlled products.

Q: Jeremy Kincaid from Van Lanschot Kempen on Indonesia acquisition dynamics A: Abhijit explained Indonesia's transfer was part of the demerger dividend and did not affect cash flow as it was a delayed technical transfer.

Q: Guillaume Delmas from UBS on market growth and commodity impact A: Peter and Abhijit discussed market growth expected 3%-4% with volume and mix driving growth. Commodity prices expected to be significantly lower in 2026 compared to 2025, reducing headwinds.