Wall’s Cornetto, Magnum, and Ben & Jerry’s ice cream packets will be on display on March 20, 2024.
John Keeble | Getty Images News | Getty Images
Magnum Ice Cream Company listed on the Amsterdam Stock Exchange on Monday, completing a long-awaited spin-off. unilever The company is trying to reinvigorate growth amid challenges from health-conscious consumers and a high-profile dispute with Ben & Jerry’s.
The stock opened at 12.20 euros, slightly below the base price of 12.80 euros. As of 10:30 a.m. London time, the last traded price was 12.87 euros, giving the company a market capitalization of about 7.9 billion euros ($9.2 billion). Secondary listings are also taking place in London and New York.
“As part of the Unilever family, we have become the world leader in ice cream,” said CEO Peter Ter Kurbe. “As an independent, publicly traded company, we will be more agile, more focused and more ambitious than ever.”
Unilever first announced plans to spin off its ice cream division, which includes Ben & Jerry’s, Magnum and Cornetto, in March last year. The company is now the world’s largest independent ice cream operator.
“The reason Unilever decided to spin off Magnum is actually because they can’t focus on Magnum,” RBC’s James Edwards-Jones said on CNBC’s “Squawk Box Europe.”
“They were really moving forward with their personal care strategy, but they didn’t have the bandwidth to accommodate Magnum at the same time. As a result, the idea for Magnum’s IPO was to actually focus 100% on the ice cream business, with a dedicated management team that could focus on things like costs and capital expenditures.”
The consumer goods giant was facing pressure from investors to overhaul its vast business. The company’s ice cream division will generate revenue of 7.9 billion euros ($9.2 billion) in 2023, and will do better as a standalone business.
In September, Magum set a goal to increase sales by 3% to 5% over the medium term starting in 2026.
“The fact that they’ve been operating as a standalone business since July of this year really strengthens their ability to focus[on the in-scream business]. Based on that, I think you can see how they could probably get to the lower end of that range, but anything above 3% to 5% feels very ambitious,” Edwards-Jones said.
Future challenges
“They have a strong focus on emerging markets, a very strong brand, and an industry-leading market share,” said Russ Mold, investment director at AJ Bell. “The downside is that we have commodity exposure, we have governance issues with Ben & Jerry’s, which is a big challenge, and the business is very weather-related,” he told CNBC’s “Europe Early Edition” on Monday.
“We also suspect that it will continue to require fairly significant investment, given that it is probably a cash-run business and is a fairly capital-intensive business.”
The consumer staples category is expected to face challenges due to health-conscious consumers and a booming weight loss drug business pioneered by Novo Nordisk and Nordisk. Eli Lilly. Magnum suggested that these factors could reduce the company’s annual sales by about 0.5 percentage points, adding that management may come up with new formats to counter this trend.
Magnum Ice Cream is currently continuing a long-running public dispute with the founders of Ben & Jerry’s that dates back nearly 50 years.
Founders Ben Cohen and Jerry Greenfield have become increasingly outspoken about their dissatisfaction with the direction of the brand, which they sold to Unilever in 2000. In September, the pair launched the Free Ben & Jerry’s campaign, calling for Ben & Jerry’s to become an “independently owned company with socially engaged investors.”
“No matter how much Unilever and Magnum try to distance themselves, Ben & Jerry’s social mission has always been inseparable from the brand itself,” Cohen said Monday.
“[Magnum’s]attempt to dismiss our campaign shows that they recognize the risk that our vocal community poses to the rest of the ice cream business. This risk cannot be shrugged off, and pretending that a spin-off will eliminate it shows how deeply they misunderstand this brand and its supporters.”
In an interview with the Financial Times, Magnum CEO Peter Ter Kulve called on Ben & Jerry’s co-founders Cohen and Greenfield to “pass on to a new generation.” Cohen responded by accusing Magnum of trying to silence the brand’s social mission.
—CNBC’s Matthew Ward-Perkins contributed to this report.
