Magnum Ice Cream soars in Amsterdam, beats Q1 expectations and confirms targets

(Il Sole 24 Ore Radiocor)- Magnum Ice Cream soared on the Amsterdam Stock Exchange after beating expectations for first quarter sales. The share price of the world's number one ice cream company, which will be spun off from Unilever in 2025 and owns the Magnum, Ben & Jerry's and Cornetto brands, was up double digits at around 12 noon. Since the beginning of the year, the decline is 7.6% and mainly reflects the negative investor sentiment on the high-calorie food sector, which has been penalised by changing consumer habits. Magnum, on the other hand, announced a better-than-expected sales performance. The group's first-quarter revenues totalled €1.77 billion, down 1.2% on a reported basis, due to the exchange rate which had a negative impact of -5.5%, but up 4.5% on an organic basis against the 2.6% expected by analysts on average. Making a 'substantial contribution' were volume increases of 2.9% and price increases of 1.6%, the company pointed out. Magnum also indicated that growth was widespread across all regions, with 'strong performance' in the US and Europe and 'continued progress' in Asia, the Middle East and Africa. The group also highlighted the progress of its productivity programme and confirmed the completion of acquisitions in India and Portugal. Looking ahead, the group confirmed its annual forecasts. "We are aware of the growing uncertainty in the global environment, particularly in the Middle East, although our direct regional exposure remains limited and we are taking mitigating measures. More generally, we are well prepared for the summer season and our focus remains on the implementation of our growth strategy and productivity programme. We confirm our forecast for the full year: organic sales growth of 3-5% with an improvement in the underlying margin,' said CEO Peter Ter Kulve. Former Unilver subsidiary Unilver, now a 19.85% shareholder in Magnum, also rose on the stock market after reporting a 3.8% increase in like-for-like sales in the first quarter to EUR 12.6 billion, exceeding analysts' estimates of 3.6% growth. In contrast, reported sales were down 3.3% due to currency developments. The main driver of growth was business in emerging markets, up 5.7%. Analysts at Rbc Capital Markets point out that the Home Care and Latin America divisions posted higher-than-expected organic sales growth, with organic sales up 6.1% and 6.2% year-on-year, respectively. The increase in the Home Care division was driven entirely by volumes, while in Latin America organic growth was driven by both volumes and prices. "Unilever's efforts to boost its performance in these areas paid off," commented RBC. For the full year, Unilever expects underlying sales growth at the lower end of its multi-year forecast of 4% to 6% and "modest improvement" in adjusted operating margin. The company also initiated the EUR 1.5 billion buyback announced in February. The Unilever Group is in the midst of a reorganisation, which, in addition to the hive-off of 80% of its ice cream business last year, led about a month ago to an agreement with McCormick to merge their respective food divisions and create a new company valued at about USD 65 billion. The reorganisation aims to focus the Unilever group on beauty, personal care and household cleaning products.