Magnum Ice Cream results fail to impress as operating profit slides

(Sharecast News) - Shares in Magnum Ice Cream tumbled on Thursday as its first full-year results since the recent demerger from Unilever failed to impress. The maker of Cornetto and Ben & Jerry's said full-year pre-tax profit slumped 48.7% to €307m, while operating profit declined to €599m from €764m.

Revenue was flat at €7.9bn, with organic sales growth of 4.2%. Volume growth was 1.5% while price growth was 2.6%.

Free cash flow for the year came in at €38m, down from €803m in 2024. The company said this was mainly due to the significant cash outflows related to the demerger, implementation of the interim operating model, interest costs on new loans, and TSAs with Unilever.

The adjusted EBITDA margin fell to 15.9% from 16.9% a year earlier, impacted by forex translation effects and previously allocated depreciation costs.

For 2026, organic sales growth is expected to be between 3% and 5%, with and expected adjusted EBITDA margin improvement of 40 to 60 basis points.

Chief executive Peter Ter Kulve said: "We delivered a solid operational performance in 2025, with broad-based organic sales growth of 4.2%, outperforming the growing global ice cream market and consolidating our leading position whilst we delivered a complex company separation.

"I am particularly pleased with our 1.5% volume growth, reflecting the continued momentum behind our well-loved brands. Our four leading brands, Magnum, Ben & Jerry's, Cornetto and the Heartbrand, were the driving force behind our performance, with 150 new launches, including Magnum Utopia and Cornetto Max."

At 1035 GMT, the shares were 13.6% lower at 1,232.50p.

Dan Coatsworth, head of markets at AJ Bell, said: "The Magnum Ice Cream Company has seen its share price melt faster than a Cornetto left in the sun after its maiden results as an independent entity.

"The spin-off from Unilever meant the results were always likely to be messy with one-off costs associated with the split.

"However, investors were still unimpressed by the big drop in annual profit and cash flow, raising questions about how the process was communicated and managed. The share price sell-off suggests lots of Unilever holders were looking for any excuse to offload the Magnum shares they were handed as part of the demerger.

"From Unilever's perspective it just reinforces the decision to exit the ice cream business to focus on its core brands. Ice cream is seasonal and has higher storage and distribution costs.

"A further concern for the market is the potential impact of weight-loss drugs on people's appetite for high calorie, indulgent ice cream products."