Financials
Financials in One Page
The Magnum Ice Cream Company (TMICC) is the world's largest pure-play ice cream company, demerged from Unilever on 6 December 2025 and trading since 8 December 2025. The financial statements you are reading are essentially a standalone Year 1 income statement bolted onto four years of carve-out history. Group revenue was €7.91B in FY2025 (roughly flat reported, +4.2% organic), Adjusted EBITDA was €1.26B (15.9% margin, down 100bps), and IFRS net profit fell to €307M as separation, restructuring, hyperinflation and brand-new interest costs hit the income statement. Statutory free cash flow collapsed from €803M to €38M — but ~€700M of the gap is one-time demerger plumbing (a €905M inventory subsidy paid to Unilever, separation outflows of €564M, and €105M of new interest). The balance sheet was simultaneously re-engineered: TMICC issued €3B of investment-grade bonds in November 2025, lifting net debt from €263M to €2,967M (~2.4× Adj EBITDA on management's measure, ~3.1× on IFRS EBITDA) and shrinking book equity by 77% to €633M.
The single financial metric that matters most right now is the FY2026 Adjusted EBITDA margin trajectory — specifically whether management's promised 40–60bps of annual margin expansion shows up cleanly once the Transitional Services Agreement (TSA) headwinds reverse from H2 2026 onward. The whole equity story underwrites on that line.
FY2025 Revenue (€M)
Adj EBITDA Margin
FY2025 FCF (€M, reported)
Net Debt / Adj EBITDA
ROIC (FY2025)
P/E (trailing)
EV / Adj EBITDA
Net Debt (€M)
Read the GAAP numbers with one eye on the demerger. Five of the most consequential line items — net income, operating margin, FCF, debt, equity — all moved sharply in FY2025 because of separation accounting, not because the underlying ice cream business changed. Adjusted EBITDA (15.9% margin, organic growth +4.2%) is the cleanest read of the business engine; the rest of this page separates the two carefully.
Quick glossary used in this page. Organic sales growth (OSG) — revenue change excluding FX and M and A; this is the volume + price the business actually delivered. Adjusted EBITDA — earnings before interest, tax, depreciation and amortization, with separation costs and restructuring stripped out. Free cash flow (FCF) — cash from operations minus capex; management's reported figure for 2025 also nets out separation cash outflows. Net debt / EBITDA — leverage ratio; investment-grade food companies typically sit at 2–3×.
Revenue, Margins and Earnings Power
The top line is stable but only because three different forces are roughly cancelling: AMEA (+10.9% OSG) is masking weakness in the Americas (+0.8% OSG), price (+2.6%) is doing more work than volume (+1.5%), and a -4.3% FX translation drag (mostly Turkish lira and US dollar) ate the reported growth. Reported revenue is essentially flat at €7.9B for the third year running; the organic engine is healthier than the headline.
The €1,255M Adjusted EBITDA (mgmt) bridges to €937M of IFRS EBITDA via €318M of "adjusting items" — almost entirely separation and restructuring costs. That gap is the single biggest reason 2025 looks ugly on a GAAP screen and clean on an underlying screen. Strip the one-offs and the engine generated roughly the same EBITDA as 2024 in absolute terms, just on a 100bps lower margin.
Margin profile
Gross margin slipped from 34.9% to 34.6% on commodity inflation (cocoa, dairy) — a number you can only get from the 20-F because the fiscal feed reports gross profit = revenue. selling, general and administrative expense widened 20bps from double-running costs and the TSA mark-up. Underlying productivity savings offset operational inflation; the headline margin drop is overwhelmingly TSA cash costs and separation accounting, not pricing/cost mix going the wrong way.
Half-year shape (carve-out reporting artefact)
The fiscal feed reports quarterly numbers that are simply each half-year split in two, because the carve-out reported on a half-yearly basis under Unilever. Treat the data as H1 / H2 rather than quarterly, and the seasonality and inflection points become visible:
H2 2025 operating profit (€30M) is what the demerger looks like on the income statement. The €146M of separation cash, the €180M of interim-operating-model cash, €105M of new interest, and €38M of replacement depreciation all landed disproportionately in the second half. H1 2026 is the first half where most of these one-offs are absent; H2 2026 is when management says the bulk of TSA cash costs roll off.
Cash Flow and Earnings Quality
For three years (2022–2024), TMICC's carve-out cash generation looked pristine: operating cash flow ran 1.4–1.9× net income, and FCF averaged ~€620M on €7.7B of revenue. In FY2025 both ratios collapsed — operating cash dropped 57%, statutory FCF fell to €38M, and the FCF margin went from 10.0% to under 1%. The question is whether this is broken or just temporarily plumbed wrong.
Definition. Free cash flow is cash generated after operating needs and capital expenditures. Two FCF numbers exist for 2025: the fiscal-data calculation (OCF − capex = €126M) and management's reported figure (€38M, which also nets the demerger-related interest and replacement depreciation as cash items). Both are correct; the second is more conservative.
What ate the cash in 2025
The €905M inventory subsidy alone explains more than half of the €1.1B year-on-year fall in operating cash. That cash returns to TMICC when the inventory is purchased at the end of the Transitional Period. Strip out the one-time bucket (~€1.5B) and underlying FCF generation in 2025 is consistent with the €700–900M range FY2023–24 set as the normalized run-rate. The board's stated medium-term FCF target is €0.8–1.0B from 2028, which implicitly assumes the same baseline.
Pre-demerger, this business was a textbook cash compounder: FCF above 100% of net income, FCF margin climbing toward 10%. The signal investors should care about is whether 2026–27 returns to the 2024 baseline once the one-off bucket clears.
Balance Sheet and Financial Resilience
The balance sheet is the single most-changed financial statement in 2025. TMICC was loaded with €3B of senior unsecured bonds in November 2025 and a €100M term-loan drawdown to settle the inter-company payable that arose from the asset transfers. The "before" balance sheet was a carve-out abstraction; the "after" balance sheet is what shareholders actually own.
The company received investment-grade ratings (Standard and Poor's BBB, Moody's Baa2) at issuance. Average debt maturity is 7.5 years, spread across four bond tranches with no near-term refinancing wall.
Debt stack at year-end 2025
EBIT interest coverage drops from triple-digit (carve-out: tiny intercompany interest) to a real-world 4.3× in 2025, and that 4.3× is on only partial-year interest; the run-rate coverage is the number that matters and won't be visible until FY2026. At ~€120M of full-year interest against current Adjusted EBIT of €917M, the run-rate coverage is roughly 7–8×, which is consistent with the BBB/Baa2 rating.
Liquidity and working capital
The receivables and DSO blow-out is not a credit-quality issue — it is the inventory subsidy sitting on the asset side of the balance sheet until the Transitional Period ends. Without that, DSO is ~30 days, consistent with a packaged-food peer.
Goodwill and intangibles are 16.6% of total assets (€1,241M of €7,488M). That is low for a brand-led consumer staples company — Unilever runs 47% — because most of the brand portfolio (Magnum, Ben and Jerry's, Cornetto, Wall's) was internally developed and never carried at acquired-asset value on the balance sheet. Book value materially understates intrinsic value, which is why P/B (13.2×) and ROE (17.9%) are simultaneously high.
Returns, Reinvestment and Capital Allocation
The carve-out years show inflated returns (ROIC 34% in 2022, 15% in 2023–24) because the carve-out balance sheet carried very little debt and only fragmentary working capital. The 2025 ROIC of 9.5% is the first standalone read, and it lands below the food-major peer average. Whether that recovers depends on (a) margin expansion delivering on the 40–60bps medium-term target, and (b) the working-capital normalization that follows the Transitional Period.
Capital allocation in 2025
Capex stepped up from €321M to €357M (+11%, now 4.5% of revenue) and per the 20-F is being directed at cabinet fleet expansion and capacity bottlenecks in growing markets. That is reinvestment at the cycle's right end. Management's framework — payout 40–60% of adjusted net income, maintain investment-grade ratings, retain capacity for bolt-on M and A — is consistent with the current cash uses. There is no buyback program; the India business acquisition (~€300M of facility committed) is the only material announced inorganic call on capital in 2026.
Share count and per-share metrics
Share count is effectively fixed at the demerger basis: 612.3M shares basic, 615.6M diluted (issued 8 December 2025). There is no pre-IPO share-count history because TMICC did not exist as a standalone entity. Per-share FY2025 figures: EPS €0.48 basic, Adjusted EPS €0.93, FCF/share €0.21 (calc) or €0.06 (mgmt FCF), Book value €1.02, Tangible book €(1.00). The negative tangible book is a function of the carve-out goodwill allocation — a non-cash artefact, not a solvency flag.
Segment and Unit Economics
The regional split is decision-useful even though the IFRS segment file did not populate. The 20-F gives a clean regional income statement view:
Read this carefully: AMEA is 25% of revenue but, at 22.9% Adjusted EBITDA margin against the 13–14% in mature markets, it is contributing well above its revenue weight to the Group profit pool — closer to 35–37% of Adjusted EBITDA. AMEA is also the only region with double-digit organic growth and meaningful volume expansion (+4.5%). The investment case is structurally a bet on AMEA mix-shift inside a stable global topline. Europe and ANZ is the productivity restructuring story (Italy turnaround); Americas (US growth, Brazil/Canada drag) is the execution story.
Brand contribution
The four leading brands (Magnum, Ben and Jerry's, Cornetto, Heartbrand) generated 11% of global revenue of the top 5 ice cream brands; Magnum's high-single-digit organic growth and Cornetto's MAX cone launch were the standout 2025 momentum points. Innovation cadence — Magnum Bonbon, Cornetto MAX, Ben and Jerry's 25 new flavour/format combinations, Yasso brought in-house — is consistent with a company trying to defend pricing power inside a mature category.
Valuation and Market Expectations
Valuation must be read in light of two unusual facts: (1) the price series only began on 8 December 2025, so there is no own-history to anchor multiples against, and (2) GAAP earnings are depressed by ~€318M of separation/restructuring adjusting items, so trailing P/E (28.1×) materially overstates the underlying earnings multiple. Look through to EV / Adjusted EBITDA of 10.4× and trailing Adjusted P/E of ~17× (€15.85 / €0.93 Adj EPS) for the cleaner comparison.
Bear / Base / Bull
At today's €15.85 and 10.4× EV/Adj EBITDA, the stock prices in base-case execution — meaningful but not heroic margin expansion, AMEA continuing to lead, and a clean exit from TSAs by end-2027. The asymmetry favours the upside if H2 2026 confirms underlying margin recovery, because no one will own this stock at a multiple this low if mid-teens EBITDA expansion is durable. The asymmetry favours the downside if AMEA decelerates while the productivity program fails to offset commodity inflation, since at current leverage there is no buffer.
Peer Financial Comparison
MICC uses Adjusted EBITDA margin (15.9%); peers use reported EBITDA margin. MICC P/E uses trailing IFRS EPS (€0.48); on Adjusted EPS (€0.93) the P/E is 17.0×, in line with the food-major average.
What the peer table says. Against the food-major set, MICC sits cheaper than Nestlé, Mondelez and Hershey on EV/EBITDA, slightly more expensive than Unilever and General Mills. Margins are visibly below Unilever (17.9% op) and General Mills (17.0% op) but management's medium-term guide is to close exactly that gap — 16.9% Adj EBITDA in 2024 → 40-60bps × multiple years gets you to the 19-20% range these peers operate at. The pure-play ice cream focus is the bull thesis; the leverage is below GIS and MDLZ and similar to HSY/UL. Where MICC genuinely scores worse is FCF yield (1.5% reported vs 5–8% across peers), but that is the one-off bucket distorting the trailing number, not the underlying.
The cleanest comparable is Unilever itself (former parent, retains 19.85% stake) — 17.9% operating margin, 18.5% FCF margin, 7.7% FCF yield. That delta of ~10ppts on operating margin between MICC and UL is the bull-case prize: closing half of it justifies the current valuation, closing all of it materially rerates the stock.
What to Watch in the Financials
Closing call
What the financials confirm: TMICC is a stable-revenue, modest-organic-growth, mid-teens-EBITDA-margin pure-play with one genuinely attractive regional engine (AMEA) and a credible productivity program that has demonstrated two consecutive years of market-share gain. The business engine is fine.
What the financials contradict: a clean buy-on-fundamentals case at face value. Trailing GAAP earnings, FCF and ROIC all look weak because the demerger took a knife to all three simultaneously. Anyone screening on consensus 2025 numbers will pass on the stock for the wrong reason.
The first financial metric to watch is the H1 FY2026 Adjusted EBITDA margin print (likely September 2026). A 16.5–17.0% landing with mid-single-digit OSG validates the 40–60bps medium-term commitment and strengthens the case for a 12–13× EV/EBITDA multiple. Below 16.0% the bull case is on the back foot.