Packets of Walls Cornetto, Magnum and Ben & Jerry’s ice cream are displayed on March 20, 2024.
John Keeble | Getty Images News | Getty Images
Magnum Ice Cream Company, now the world’s largest standalone ice cream business, debuted on the Amsterdam stock exchange on Monday.
The stock opened at 12.20 euros, slightly below its reference share price of 12.80 euros. Secondary listings are also taking place in London and New York.
“We became the global leader in ice cream as part of the Unilever family,” CEO Peter ter Kulve said Monday ahead of the debut. “Now, as an independent listed company, we will be more agile, more focused, and more ambitious than ever.”
Unilever first announced plans to spin off its ice cream unit, which includes Ben & Jerry’s and Magnum, in March last year.
“The reason that Unilever decided to spin off Magnum is really because they haven’t been able to focus on it,” RBC’s James Edwardes Jones told CNBC’s “Squawk Box Europe.”
“They haven’t had the bandwidth to accommodate Magnum at the same time that they’re really pushing ahead on their personal care strategy. And as a result of that, the idea of the IPO of Magnum is that they’re going to have a dedicated management able to focus on costs, on capital expenditure and so on, really 100% focused on the ice cream business.”
The consumer goods giant faced pressure from investors to overhaul its sprawling business. Its ice cream division, which generated 7.9 billion euros ($9.2 billion) in revenue in 2023, would perform better as a stand-alone business.
Magum in September set a target to grow revenue between 3% to 5% in the medium term from 2026.
“There’s a strong emerging market angle, and it has a leading market share in its industry, with some very powerful brands,” said Russ Mould, investment director at AJ Bell. “On the downside, you have commodity exposure, you have this governance issue with Ben & Jerry’s, which is a major challenge, and you have a business that’s pretty much weather related,” he told CNBC’s “Europe Early Edition” on Monday.
“Also, there is the suspicion that, given that it has been perhaps run for cash, and it’s a fairly capital-intensive business, there’ll need to be some fairly substantial investment going forward as well.”
The consumer staples category is expected to face challenges due to health-conscious consumers and the booming weight loss drug business pioneered by Novo Nordisk and Eli Lilly. Magnum has suggested that these factors could cost the company about half a percentage point per year in revenue, Mould said, adding that management may come up with new formats to counter the trend.
A series of public disputes with the founders of Ben & Jerry’s has threatened to overshadow the spinoff.
Speaking to the Financial Times, Magnum’s CEO Peter ter Kulve called on Ben & Jerry’s co-founders Ben Cohen and Jerry Greenfield to “hand over to a new generation.” Cohen responded by accusing Magnum of attempting to silence the brand’s social mission. He previously called on Unilever to “free” Ben and Jerry’s.
— CNBC’s Matthew Ward-Perkins contributed to this report.
