Magnum’s meltdown: can Unilever’s ice cream spin-off recover from a bad start?
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13 March 2026
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In December 2025 investors in Unilever received free shares in the world’s largest ice cream manufacturer following the demerger of The Magnum Ice Cream Company. Just weeks later, a mixed set of maiden results (12 February) from the new entity, saw its shares melt under the glare of the public markets.
The Unilever spin-off brought inevitable one-off costs, resulting in a messy set of numbers. Investors reacted negatively to sharp declines in annual earnings and cash flow, with profit below forecasts. Bringing into question communication around the split and the way expectations were managed.
Ultimately the share price drop suggests many Unilever shareholders were keen to sell the Magnum shares newly acquired through the demerger.
For Unilever, the results and the reaction to them merely confirmed the wisdom of exiting the seasonal, high-cost ice cream business to concentrate on its core brands.
After this disappointing start to life as an independent entity what can Magnum do to rebuild credibility and how can it tackle market concerns that weight-loss drugs will slash demand for high-calorie treats like ice cream?
What is the Magnum Ice Cream Company and who’s the competition?
The Magnum Ice Cream Company, now listed in London, New York and with a primary listing in Amsterdam, has a 21% share of the global ice cream market. It has four so-called ‘power brands’ which will be familiar fixtures in freezers in supermarkets, convenience stores and at home.
This quartet encompasses Magnum, Ben & Jerry’s, Cornetto and the Heartbrand (also known as Wall’s). Combined they account for 70% of group revenue.
Its main rival is private outfit Froneri which owns the premium Häagen-Dazs brand. Swiss consumer goods giant Nestlé has a 50% stake in Froneri as part of a joint venture with French private equity firm PAI Partners.
In February 2026 reports suggested Nestlé would, like Unilever give up on direct involvement in the ice cream game, by selling its smaller, wholly owned ice cream operations to Froneri.
Magnum’s CEO is Peter ter Kulve who had a long career at Unilever in several executive roles. His task will be to energise a business which saw a stagnant market share between 2016 and 2023 and only a very modest improvement in profit over the same time period from €1.1 billion to €1.2 billion.
Under a transformation programme launched in 2024 in the run-up to the demerger, Magnum gained 90 basis points of market share in a year and pushed profit to €1.3 billion.
What are the company’s plans for future growth?
Like a lot of consumer goods companies, Magnum is seeing stronger growth in emerging markets than in the developed world. This reflects an emerging middle class in these countries but also the absence of the unbranded alternatives which are taking sales away from the bigger brands in the West.
The company is looking to lean into this opportunity. The acquisition of a 61% stake Kwality Wall’s India from Hindustan Unilever will give it control over some of its key brands in one of the world’s fastest growing markets for ice cream.
The company also hopes to improve efficiency and, by doing so, boost its margins. Alongside this, there are plans to put more marketing money behind its brands which investment bank Berenberg notes suffered from a period of underinvestment under former parent Unilever.
The €500 million productivity programme is guided to boost the adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) margin by 40 to 60 basis points in 2026.
It involves relying on its brand strength to offset higher cocoa and dairy costs, expanding its network of branded freezers and consolidating and upgrading its manufacturing facilities.
Magnum has projected annual growth of 3% to 5% from 2026 and, assuming the group can be more efficient as a standalone entity, this should feed into profit growth which outpaces any expansion in sales.
What are the key risks facing the company?
Increased proliferation of weight-loss drugs is a risk to growth as they could literally reduce the people’s appetite for less healthy options like ice cream.
One potential solution to this is product innovation and a move into ‘adult functional refreshment’ with the recently launched low-calorie, vitamin-enriched Hydro:ICE ice pop offers some insight into the direction it might take.
The launch into portion-controlled segments with its bite size Magnum Bonbon range and its higher protein and lower fat Yasso frozen yoghurt range are other examples.
However, Magnum’s long-term success likely relies on there still being some room for consumers to indulge themselves in a GLP-1 world.
Another challenge for the company is the borrowings it is saddled with following its split from Unilever. Net debt currently stands at €3 billion or 2.6 times adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) with annual interest payments estimated at €139 million.
How does the valuation compare to peers?
While its lack of stock market listing makes a comparison between Magnum and Froneri tricky – a funding round in October 2025 valued the latter at €15 billion and its annual sales in 2024 were €5.5 billion. The Magnum Ice Cream Company is currently valued at €7.9 billion and its latest annual revenue came in at €7.9 billion too.
Magnum trades at a discount on a price to earnings or PE basis to its diversified listed peers too, on a 2026 forecast PE of 13.1 times, reflecting its debt pile and structurally higher costs.
Tom Sieber: Content Editor
Tom Sieber is AJ Bell's Content Editor. He was previously the Editor of Shares Magazine. He has been with the business since 2012.
Tom is a regular contributor to the AJ Bell Money & Markets...
