Magnum Ice Cream Aktie

Good morning, and welcome to the Magnum Ice Cream Company Webcast for First Half 2026 Results. My name is Rosea, and I will be your operator for today's call. Before we begin, please note that today's presentation is being recorded. [Operator Instructions]. With that, I'm pleased to turn the call over to Lloyd Midwinter, Head of Investor Relations. Lloyd, please go ahead.

Hello, and welcome to the webcast for the H1 2026 results of the Magnum Ice Cream Company. My name is Lloyd Midwinter, Head of Investor Relations. And I'm here with our CEO, Peter Ta Kulve; and our CFO, Abhijit Bhattacharya.

Our press release and this presentation are published on our Investor Relations website where a replay and transcript of this webcast will also be made available. Before we start, I would like to draw your attention to the cautionary statement regarding forward-looking statements and assumptions. This applies to the presentation and webcast, including the Q&A session.

In a moment, Peter will share some key highlights on our business performance, showing how we are executing on our strategy. Abhijit will then run through our financial results and outlook. We will then be happy to address your questions. So Peter, over to you.

Good morning, everyone, and thank you for joining. Lloyd. It's nice to have you with us. Welcome to TMICC. Let's start with the headline first.

We delivered a solid first half. The ice cream category keeps growing, and we outperformed it by achieving growth of 4.7%. Growth was balanced across volume value every region and each of our global brands. Importantly, our performance was driven by innovation and operational rigor. And this rigor and we got off to a strong start for the summer season. Disciplined execution of our productivity program delivered 90 million savings during the first half, helping us deliver underlying margin improvement and providing fuel for growth.

Adjusted EBITDA increased to EUR 880 million, 18.7% margin and adjusted EBIT margin was 15.3%, 50 basis point [indiscernible] transformation remains on track for end of '27. Looking ahead, while we are clear-eyed on the wider external challenges, we are committed to our strategy, confident in our ability to execute and reaffirm our full year outlook. Before diving into the results of the first half, I want to take a step back and remind you of our vision and strategy. It's been almost a year since we presented this at our Capital Markets Day and we're in the middle of our most important period of execution when you can see impact in action.

Our vision for the Magnum Ice Cream Company is simple. We want to make the most left ice cream in the world to grow the market and build a highly competitive snacking business for our shareholders and customers. And we will do that by delivering our strategy to grow the ice cream market as category leader. We are executing against that strategy, and today's results show that it is starting to work. I really do believe that life stays better with ice cream. We have a simple but powerful value creation model that underpins our performance. Strong brands and innovation that create desire and demand, execution rigor that converts demand into results and the culture and structure that empowers our colleagues to act like owners.

So on innovation, we will generate demand through building and activating our brands like the best in the beauty industry. Because light beauty, ice cream is a marketing and innovation lab category, and we will leverage our unique capabilities and scale to create unmatched desire for our products. Secondly, execution, execution matters, especially in ice cream. We aim to have the rigor of our bottling and soft drinks peers, getting the right product to the right place at the right price every time at some length of desire.

And lastly, on ownership culture. None of this is possible without the right culture. It is the harder thing for people outside the company to see, but it is the most powerful change we have made in the past 24 months. We are creating a culture with clear accountability, a simple structure and aligned incentives that empower enables every colleague. Everyone at the Magnum ice cream company is an owner and everyone is here to sell ice cream. This model will enable us to deliver against our medium-term targets for growth and returns. We're off to a solid start.

Now turning to our business performance during the first half. In the first half, we delivered EUR 4.7 billion revenue, achieving organic sales growth of 4.7%. We balanced volume and value to outperform the Global Ice Cream category with 2.5% volume and price up 2.2%. It's important to remember that this performance is against strong comparisons from the previous years. In the first half of 2025, we delivered organic sales growth of 5.8%. I'm proud of the team for delivering such a strong result. It shows our strategy is beginning to work.

All three of our regions contributed to growth, with Europe and ANZ up 4.1%, America 3.2 and EMEA growing 7.6%. Our focus on operational rigor meant the key summer selling season got off to a strong start. We gained share in all regions, including the U.S. our biggest market with $1.1 billion revenue for the first half. France and the U.K. were key growth drivers for Europe. EMEA was driven by double-digit growth for Turkey and Pakistan as well as India included from Q2. However, we also have some markets not yet achieving their full potential, which we see as future opportunity, and we are working with the local teams to get it right into the detail of the challenges and fix the issues.

For example, in Italy, we are making progress with our sales and share stabilizing after taking action to address declines. We have also renewed our team in Brazil and are making structural changes to be ready for the next peak season. This deep market focus work will take time to show in our results. but we are focused on setting ourselves up for long-term success in those countries rather than quick fixes. Our four leading brands Magnum, Ben & Jerry's, Cornetto and the [indiscernible] brands continued to drive organic sales growth.

Magnum delivered mid-single-digit growth driven by the successful launch of Magnum Signature La Pistache, ranked as the top ice cream innovation in Europe as well as [ La Peche ], [indiscernible] in Europe and ANZ as well as comes in multiple markets of Europe, ANZ and EMEA.

Ben & Jerry's gained further momentum and grew mid-single digit across the period. with performance accelerating to 9.2% in the second quarter for both the Americas and Europe and set with the new sticks in the U.S. and [ sandwich ] format, bringing new consumers to the brand. Stick and Sandwich formats of Ben & Jerry are as popular as our other brands, maybe even more so. but it is an innovation for Ben & Jerry, which customers are loving. It's allowing consumers on-the-go snacking with one of their favorite brands with their favorite flavors and they are in sizes that resonate with consumers on GLP-1. Ben & Jerry's social reach and engagements continue to grow and our annual free cone was the most successful yet, with more than 1 million scoops shared with consumers. I also handed out scoops.

Cornetto delivered low single-digit growth, following high single-digit growth last year, supported by the launch of Pistachio Max in Europe and Turkey and an improved windmill structure for its famous topping as well as on-trend fruit [indiscernible] variance in Europe, China and selected Southeast Asian markets. The [indiscernible] brand delivered mid-single-digit growth, driven by strong performance of Solera within the core range and newly introduced Solero Bomb Ball as well as continued momentum of Volcanix in Europe and Turkey.

Our core portfolio superiority was enhanced with the success of new range additions. New pine flavors for Ben & Jerry's dairies included Strawberry, Go Nutty, and [indiscernible] are within the top 10 of new ice cream products in the U.K., Netherlands and Germany. We're also taking our premium brands increasingly multi-format, expanding occasions, Magnum Sandwiches and ball bombs counts launched strongly in Turkey, Manager sticks made up 4 of the top 10 super premium novelties in the U.S. and Ben & Jerry's Sandwiches were the #1 new impulse asking product in the U.K. I have spent a significant part of my career in ice cream, and I cannot remember a time when this much innovation was successfully delivered into the market for Magnum and Ben & Jerry's.

We also continue to create our perfect portfolio with a clear offer across all price points. This included new launches for Popsicle in partnership with Hello Kitty and Bluey in the U.S. and reinventing quality walls to lead with a new improved dairy recipe in India. This is really important in India, the biggest dairy market in the world. Our category expanding innovation continued with the launch of [indiscernible] Pines in the U.S., delivering 6 quarters of double-digit growth and Ice Balls in Asia or [indiscernible] off to a good start in Iberia and the Benelux.

Our increased speed and risen in innovation is delivering results. We can do more than just flavor renovations. Our frontline first model and ownership culture is driving growth in all channels. The at-home channel grew mid-single digit, supported by improved service level, which enhanced availability. Growth was further supported by stronger in-store execution driven by more frequent visits from our dedicated sales force and a greater focus on merchandising. In the U.S., we continue to rebuild our business in the value and club segments.

The Away from Home channel delivered mid-single-digit growth, supported by continued expansion of our cabinet fleet in key markets, including India, Pakistan, China and Mexico, sets us up for a better key summer season. Digital commerce maintained double-digit growth, driven by solid execution and supported by strong collaboration with key partners as well as improved digital assets.

Across regions, we see decom driving category growth, and we are positioning ourselves as the category partner of choice for leading players in the space as we partner on marketing initiatives. It is one of the biggest long-term opportunities we see with decom changing consumption patterns in a way that can be structurally supportive to the ice cream category.

I'm pleased with the disciplined execution driving our productivity program, which delivered EUR 90 million of savings in the first half and remains on track to deliver the planned savings of EUR 0.5 billion in the medium term. Savings in the first half included EUR 70 million in the supply chain and EUR 20 million from overhead.

We continue to reduce waste, improve factory utilization and debottleneck our supply chain, where a proportion of these savings being reinvested in growth. I was very pleased to see that we were able to increase market share during the last week in June when there was a heat wave. Only when you get operational the thing really tight, you gain market share in heat waves. Our acquisition in India and Portugal were completed on 30th of March 2026 and 1st of April, respectively and they are successfully integrated to our results.

We have appointed 6 strategic partners as the backbone of our future technology stack, and we are building our systems, processes, and capabilities. We are now in the heavy lifting phase and the team are doing a fantastic job. All TSA access planned for the first half of '26 were concluded on time. and we continue working to exit remaining TSAs by the end of '27. We'll now share more details on financial results, and I will hand over to Abhijit, our CFO, to take you through the numbers.

Thanks, Peter, and hello to everyone on the call. I'm pleased to share we delivered solid financial results for the first half of 2026 driven by organic sales growth of 4.7%, balanced between volume and price. Adjusted EBIT margin was 50 basis points higher than the same period last year and adjusted EBITDA increased from EUR 853 million to EUR 880 million, although adjusted EBITDA margin was impacted by TSA and our acquisition in India.

Free cash flow was EUR 273 million, driven by working capital movements and higher EBIT. Based on this solid performance and looking ahead, we reaffirmed our outlook for the full year. Revenue was EUR 4.7 billion for the first half up from EUR 4.5 billion last year, with organic sales growth across all regions. This was achieved through a competitive balance of 2.5% volume growth and 2.2% price growth, building on a solid -- building on a solid comparator of 5.8% from the first half of 2025.

Reported revenue growth was 4.2%, including 2.3% favorable impact from acquisitions and 2.7% adverse foreign currency translation effects. ForEx translation effects related mainly to the strengthening of the euro against key currencies, particularly the Turkish lira and the U.S. dollar. Adjusted EBIT was EUR 716 million, up from EUR 666 million last year and adjusted EBIT margin of 15.3% and was 50 basis points higher than the first half of 2025 driven by improved gross margin resulting from productivity savings, pricing, which was partly offset by cost inflation.

Adjusted EBITDA was also up at EUR 880 million compared to EUR 853 million in H1 2025. Adjusted EBITDA margin was 18.7% versus 19% last year, primarily impacted by TSAs of 70 basis points due to previously allocated depreciation charges, which are now charged as cash costs and minus 30 bps due to the acquisition in India. We offset most of the headwinds, thanks to our productivity program and selected pricing actions.

Now turning to our regions. Europe and ANZ delivered a solid performance with 4.1% organic sales growth and share gains in key markets. Growth was volume driven, supported by innovation, better execution and favorable weather towards the end of the period. France and the U.K. were in the -- were the main growth drivers in the region with France delivering double-digit growth and the U.K. posting mid-single-digit growth.

In Italy, we continue to execute our turnaround plan, stabilizing share and market share following a prolonged period of decline. Magnum and Ben & Jerry's performed strongly, delivering high single-digit and mid-single-digit growth, respectively, supported by new formats and flavors. According to Nielsen, our Magnum and Ben & Jerry's innovations together with volcanic made up 6 of the top 10 Ice Cream Innovations in Europe for the first half of the year. Growth was also enabled by improved availability and on-shelf execution with key wins, including new listings.

Adjusted EBIT margin improved by 100 basis points despite the 50 basis points headwind due to lower royalties from India. Strong gross margin delivery was partially offset by previously allocated depreciation charged as cash cost according to the which adversely impacted adjusted EBITDA margin by 90 basis points. The Americas delivered organic sales growth of 3.2% and continued to gain market share in growth, the U.S. and Mexico, while executing our turnaround plan in Brazil where the business remained in decline.

Reported revenue was 1.1% lower than last year due to 4.1% adverse impact from ForEx translation. In North America, growth was driven by our leading U.S. brands with Yasso and Popsicle continuing double-digit growth and Ben & Jerry's outperforming the broader market, resulting in market share gains. Innovations continued to revitalize our U.S. portfolio. Strategic partnerships, including with Hershey and Disney supported growth across key brands, while Popsicle benefited from successful collaborations with Hello Kitty and Bluey. Ben & Jerry's delivered strong growth, especially during the second quarter, supported by the launch of Stick and Sandwich formats.

These launches plus Yasso pints represented 6 of the top 10 ice cream innovations during the first half according to Nielsen. Adjusted EBIT margin improved 140 basis points due to carryover pricing effect from the second half of 2025 and savings from our productivity program, which more than offset increased distribution cost. Adjusted EBITDA margin improved 50 basis points, driven by higher EBIT, partially offset by previously allocated depreciation now charged as cash costs.

EMEA continued to deliver strong growth with sales 7.6% higher. Turkey performed strongly with double-digit growth despite being impacted by measures imposed by the Turkish Competition Authority or TCA. These interim measures are focused on the use of cabinets in small retail outlets where no other freezer cabinet is directly accessible to consumers. 30% of our freezers need to be allocated to competing products or left empty. We are cooperating with the TCA to comply with the measures imposed. Elsewhere in the region, Pakistan continued double-digit momentum, while Indonesia achieved mid-single-digit growth and significant share gains.

India, which is included in the perimeter from the second quarter onwards, also delivered double-digit growth. Growth was moderated by China, which was impacted by unfavorable weather towards the end of the period. Reported revenue increased 9%, including 6.8% favorable impact from our acquisition in India and 5.2% adverse ForEx translation effects. Growth was driven by innovations from our global brands such as the Magnum Sandwich in Turkey and market-specific launches, including the Cornetto Multilayer Sticks.

This was underpinned by driving consumption occasions and expanding market penetration through festive activations as well as joint business plans with retail partners, resulting in greater product availability and consumer reach. Adjusted EBIT margin declined by 190 basis points due to significant external headwinds including material cost inflation and measures imposed by the TCA as well as our acquisition in India. Material cost inflation had a more significant impact in EMEA during the first half when compared to other regions due to the more lengthy supply chain, which means that cocoa consumption in the first half was done from purchases made at higher prices.

These impacts were partly mitigated by selective pricing actions and disciplined execution of our cost management program. Adjusted EBITDA margin decreased by 270 basis points, also reflecting previously allocated depreciation charged as cash costs.

I'll now take you through the key margin developments compared to last year. Adjusted EBITDA margin increased 70 bps for the first half, excluding the impact of 70 bps related to TSAs with previously allocated depreciation now charged as cash cost and 30 bps from our acquisition in India. Operationally, 190 basis point savings from our productivity program and 160 basis points from select pricing actions more than offset 200 basis points commodity and other supply chain cost inflation with 80 basis points in reinvestment and other costs, including advertising and promotion, TSA markup and double run costs. Moving to cash flow.

It's important to remember the company was a division of Unilever during the first half of 2025 and we are now a stand-alone company. Free cash flow was $273 million for the first half of 2026, up from $138 million last year. with the year-on-year increase primarily driven by favorable working capital movement and EBIT. Interest cost was $80 million higher and tax charges, $38 million lower reflecting our stand-alone financing and operating structure for H1 2026 compared to operating as a division of Unilever with limited interest costs and allocated tax charges.

Also, as already mentioned, previously allocated depreciation is now charged as cash costs, resulting in $24 million lower depreciation and amortization. Excluding the factors related to the separation from Unilever, comparable free cash flow for H1 2026 would have been $99 million, up from $72 million last year. This was driven by higher EBIT, partly reinvested as additional CapEx with around 40% of CapEx for the first half related to freezer cabinets. The working capital movements were mainly related to the interim operating model with Unilever.

Our net debt to adjusted EBITDA ratio was 2.5x, at the end of H1 in line with our capital allocation policy. We are mindful of continued uncertainty in the global environment. And we are taking mitigating actions. Our focus is on executing our growth strategy and productivity program, and we are reaffirming our full year outlook. We expect organic sales growth to be between 3% and 5% and adjusted EBITDA margin to improve by 40 to 60 basis points on a comparable pyramid basis with 2025.

Reported improvement in adjusted EBITA margin is expected to be between 0 and 20 basis points, primarily due to the impact of our acquisition in India. For the full year, we expect adjusted items to be in line with previous estimates and the adjusted effective tax rate to be around 27%, excluding the impact of prior year tax settlements which is at the upper end of our midterm plan. While net finance cost is estimated to be around $160 million compared to the $180 million previously communicated.

One housekeeping point. In Q3 2026, expected customer season and turns will be accounted for in the same quarter as related sales rather than when the returns occurred. This mainly relates to Turkey and shipped a portion of revenue between the quarters, reducing Q3 and increasing Q4 by equal amounts. This has no impact on half year or full year reported results. We have published comparable growth rates in the appendix of our press release to help with your modeling and our capital allocation policy is unchanged. We will focus on delivering organic growth, productivity and cash. I'll now hand back to Peter for a short summary before the Q&A session.

Thanks, Abhijit. Our solid performance for the first half of '26 was driven by innovation and operational rigor. We delivered 4.7% organic sales growth. balancing volume value and EUR 90 million productivity savings resulting in underlying margin improvement. Looking ahead, we are committed to our strategy confident in our ability to execute and reaffirm our full year outlook. Our key summer selling season got off to a strong start, and we look forward to sharing future updates.

We'd now be happy to answer your questions. Please ask no more than two questions at one time so others can participate. And if you have further questions, please feel free to contact me in the Investor Relations team. The operator will now provide instructions and coordinate the Q&A session.

[Operator Instructions]. And the questions come from the line of Warren Ackerman from Barclays.

Hopefully, you can hear me okay. Good morning, Peter, Abhijit, Lloyd. So two for me. First one is just on the trading on the top line. Obviously, very strong in the quarter, but you do actually have a tougher comp in the third quarter on a 2-year stack. I was just wondering how much of that volume we should move across to the third quarter. Maybe you can talk about the exit rate in July, given the heat way you assume it's been very strong. And maybe any kind of update to kind of market share, how you're seeing market share data at the 12-week data versus 52-week data, just to really understand that piece would be would be helpful.

The second one actually is a little bit around kind of emerging markets. So on this Turkey thing with the TCA, is there any risk that your super normal margins in Turkey actually need to come down now because you have to open up freezers to some of the competitors? And how do you feel about the kind of margin dynamic between very high Turkey margins and very low margins in India and Brazil and the investment that you need to make? Are we kind of -- should we be expecting kind of like a bit of a step down in Rest of World margins. And obviously, that's going to be offset by Europe and other places. But just is there an issue on Turkey? And how do you feel about that versus India and Brazil?

The ice cream market is going from strength to [ strikes ]. We always expect that increased penetration and new occasions and increased distribution would drive emerging markets. we were not sure, but the trend to us portion control and calorie control is driving developed markets as well, most notable in the U.S. And all the hard work stepping up execution and innovation is starting to pay off. We had share gains 9 out of 10 quarters over. Since we started we're an innovation leader in the U.S. and Europe. Last year, we had a massive, massive share tick up, as you will remember, this year, we started a little bit weaker in a number of European countries, but we gained share in the U.S. We gained share in Europe overall, massive step-ups in some country. And China sales were a little bit weak, but we gained share. We gained massive shares in China. So all in all, we feel good about shares. But as expected, it's a competitive market, it's hard work takes the best of us. When you look at the -- when you look at the second question, one second.

Just on Turkey, I just wonder on the margins and then what's going on...

Yes. Good. A couple of years ago, we had an investigation by the antitrust authorities, and we complied with all this investigation, but our shares kept on growing. We believe that one of the core strengths of the Turkish business is actually its innovation rates and the way they develop new brands and expand their portfolio. We now have to open up our cabinets in the small outlets. We fully comply with that, but we gained a little bit of share in hard discounters and e-commerce.

Yes. Our Turkish business is extremely healthy. We believe it will go back over the full year to both volume and -- volume growth and continues at high value growth level. So we're in good space. Margins in Turkey indeed are very healthy. There is no reason why they should not stay healthy. We are very committed to our investments in India. Whilst we are building the business, the profitability will improve. But that's actually not the main thing we need to build a stronger business. We need to grow very fast.

In Brazil, we're in the middle of a turnaround. Yes, it's going a little bit slower than I had hoped to, but these are all structural changes it will take. Its fine. Brazil is also not our largest country. Does that answer?

Yes, it does. It does. I mean on Brazil, are you able to tell us, Peter, how it did in the quarter sequentially just to understand that part as well?

Yes, Brazil was still flattish, slightly down, but we're now making structural changes to the portfolio, be price channel. Hopefully, next season, the results will come through. Okay. Next question, please.

So we are now going to proceed with our next question. And the question comes from the line of Celine Pannuti from JPMorgan.

Good morning, everyone. My first question is on the guidance. Obviously, right now on top line H1, you came at the top end of your rent. H2 As you said, you face slower -- easier comp versus last year. And you mentioned that you're off to a strong start in the summer, and we can clearly see that the has been good so far in Europe. So first of all, am I right to expect you to be at the top end of the region, why you don't want to qualify that in your outlook? And then my second question probably is related. On the margin front, margin came better. I presume that better top line should translate as well in better operational profitability. And so it looks to me that it's quite conservative now, the margin guidance of 0 to 20 basis points. Could you take me through what are the incremental negative versus the beat in H1 and the potential upside from the operational benefit?

Thanks, Celine. We have made good progress in H1. It's encouraging, but we still have half a year to go. Today, we affirmed our outlook to achieve 3% to 5%. We were in outlook in guidance in the first half. And we have said that we will improve EBITDA in line with guidance. we're committed to our strategy, and we're confident in our ability to execute Yes, previously communicated, we expect improvement in H2. We still do. And yes, we basically stay within the guidance.

Maybe, Celine, just to add a bit on your question about the margin in the second half. It's important to know that we are 30 basis points behind in the -- at the end of the first half. So we have to actually -- to improve. For the full year, we have to have a margin improvement in the second half. So that's why we still hold to our outlook for the year.

We are now going to proceed with our next question. And the question comes from Guillaume Delmas from UBS.

Two questions from me as well. The first one is on your commodity cost outlook. I mean, what extent it has changed since you last updated us at the end of April since we've seen energy prices coming down. And looking at the back half, I mean do you expect a net benefit, I mean, thanks to cocoa or still like some headwinds? And if so, how will it compare to the 200 basis points adverse effect we saw in the first half. So that's my first question.

And then the second one, a question on your Cornetto brand. Out of the 4 -- out of your 4 leading brands Cornetto is the one reporting a more muted organic sales growth in that first half. Wondering what has been weighing on the brand's growth? And what are your ambitions for Cornetto going forward? So I would assume some nice acceleration.

Yes. Thanks for the question. As we have always also indicated at the beginning of the year, in the first half, we were basically still running with relatively high chocolate prices. They will be easing off in the second half of the year. We have TSAs in the first half of the year, which will reverse back in the second half of the year. Energy has gone up and down and then up again.

Overall, we therefore stick with guidance will deliver a modest profitability step-up in the second half year. Cornetto is very interesting. Cornetto is the leading cone brand in the world, whilst we're not even sell codes in the U.S. The last 2 months in China were relatively weak. Weather was poor. Shares were good. but that weighted on the Cornetto growth figures. We actually have a really interesting innovation funnel in cones. We have premium codes, which we now do via Magnum, which is a massive 50% price up versus normal Cornetto cones. So we have now a good, better, best portfolio.

We also branched out Cornetto into Sandwiches and Sticks, which helped drive the brand. It's all about creamy and crunchy. So yes, it is a very successful global brand, but it's skewed towards Europe and Asia. Cornetto, by the way, is on fire in India, which is very good to see.

We are going to proceed with our next question. The questions come from the line of Jeff Stent from BNP Pariba.

Just a quick coating question. Could you just elaborate on what this changes to the treatment of customer returns? And also, that seems to impact pricing, which I can't quite a mind around. If you could just help us understand that, that would be great.

Abhijit, can you take that?

Yes. So typically, what happens in Turkey is what we sell in -- partly in Q3 and in Q4, what remains unsold, we take back at the end of the year when we also redo our cabinets. Now in the past, those returns were all accounted for in Q4. And what we are doing now is we change that to account for it in Q3, partly and in Q4 so that the returns are accounted for matching with when the revenue is booked. So -- and then of course, when you do that, it has a bit of effect on volume and a bit of effect on price. But for the half, it has no impact at all. So it's just more to help you in modeling Q3 and Q4.

It's also the correct accounting treatment for this.

Exactly.

But how did you book a return when it's not being returned?

Sorry, I can't hear you, Jeff.

Well, I'm saying how do you book a return when the product hasn't been returned? Are you making estimates of the returns in Q3?

As a profession. It's a profession.

And the question comes from the line of Robert Jan Vos from ABN AMRO ODDO BHF.

Yes. I have two questions as well. First 1 is on the Americas. Volumes were about flat in the second quarter, same as Q1. Can you provide some color on that? For example, in Q1, you said that volume growth was 1.8% in the U.S. I understand that Brazil is down still. But maybe elaborate on how volumes developed in the U.S. in the second quarter?

And my second question is on EMEA and then particularly on China. You posted high single-digit organic sales growth in China in Q1 according to what you said at Q1. What was it -- and was the drag purely weather? Or did you also see some other impacts that held back growth in China? Those are my questions.

Okay. Thank you very much. Two interesting questions. In the U.S., we see structural changes to the ice cream market Historically, there's a lot of vanilla ice cream that is used as a topic on Apple Pie, they put it in soft drinks to call it a float. That marketing market is declining and there is very strong growth in hand health, calorie control, portion control and debt is driving the American market. As you can imagine, this is really good for us because that is where we have the cost strength of our portfolio.

And our 3.6% growth in the U.S. is driven on the growth of handheld ice cream in America. So that is -- so you don't get a lot of volume, but you get a lot of pieces and price because handheld is more premium than buckets of ice cream.

So the second question on China. I spent 2 weeks in China this year. And let me talk a little bit about what happened this year and the structural changes in we -- you had a very good first quarter. And then the weather in May and June, especially in the East, where we are strong, was not very good and that impacted sales. But structurally, you see something very interesting that the growth in the convenience channel is leveling up, and there is a new channel called the snacking channel, which is growing like gangbusters. Number of stores opened, growth of the channel.

And we are pivoting our portfolio and sales approach to these channels. But you also see, which is very interesting. That the growth in Tier 1 and Tier 2 cities, the Chongqing, the Beijing, the [indiscernible] is more muted and the growth in Tier 4, 5 cities is very strong, and we are pivoting our machine more to lower tier cities, and that's why we're still very confident and bullish on the potential of the Chinese market.

We are now going to proceed with our question. And the questions come from the line of Maxime Stranart from ING Bank.

I hope you can hear me well. Actually, one question on my side. So if we look at the improvement in adjusted EBITDA margin in H1 actually on a like-for-like basis, way above what you expect on the medium term. So could you elaborate on what actually went well in H1? And what do you believe are the challenges going forward?

Secondly, maybe moving on TSAs, could you maybe elaborate on what has been done so far? And what are the main building blocks that still need to be achieved? That would be all for me.

Yes. If you look at the margin improvement in the first half. It's in line with what we had expected, primarily driven by the productivity program that is running a little bit from pricing, of course. So those are the two big drivers. It's not -- we had some impact on energy prices, which were also in the first half. So it's not way above the midterm expectation. It's in line with what we had planned. I think if you look at the TSCs, what we have exited so far has been most of the service TSAs, which Unilever was providing us what is left to be done is to move out of the IT-related TSA.

So as we kind of roll out our new IT stack from November and December onwards, we will then, on a country-by-country basis start exiting from those TSAs as well, which will run until the end of next year.

We are now going to proceed with our next question. And the questions come from the line of Bingqing Zhu from Rothschild & Redburn.

I have two. So the first one is about Indian. So you posted a double-digit growth in Q2. So that was the first period in the pyramid. Can you unpack what drove that? I think in last quarter, you mentioned some capital expansion, quite a lot of capital expansion in the market, shipped to dairy ice cream price reset. And how sustainable is that pace? And at what point do you think India will become a meaningful contribution to the group growth? That's my first question.

And the second question, I want to ask about the U.S. distribution. I think in the press release, you flagged rebuilding the value in the cloud segment and also growing digital commerce. Can you give us an update on the progress in these channels? And again, when we might see a meaningful contribution from these channel kind of channels and the represented channels in the U.S. So two question there.

Thank you, Bingqing. Yes, on India, we basically did the following thing: a, we built a new team. All the people now running the business, our new structure. We put more resources in it. So lots of work on the organization. Then we changed pricing. And we brought pricing more in line with core snacking price points. Our ice cream was a little bit overpriced. Then we move from feasible fat to dairy, which is very meaningful in an Indian context. We then doubled down on our premium brands, Cornetto, Magnum and the Indian market is responding very well on that.

And last but not least, we rebuilt our sales system. Historically, ice cream business was selling in industry cabinets at retailers and we are turning it into a more Turkey like cabinet driven model where we placed cabinets, last year, 50,000, this year, 50,000 a and we rebuild our distributor base, put the sales reps in. So wholesale change of the Indian system, and it seems to be working. It's obviously also still a big investment. It's therefore a loss-making business.

But that will improve as we get more scale and as we are building out on new factories in India. What is the limit in India? I've said that earlier occasions, we now have approximately 250,000 cabinets. I can imagine we have 1 million because ultimately, India will be the largest ice cream market in the world. In the U.S., yes, the in Unilever, the business had pulled out largely out of club and the value channel. We are building value channel. We are building distribution in certain accounts, we are back to our historic levels.

Other accounts, we still have a little bit to go. In clubs, we do a pretty decent job in Sam's I would still like a broader portfolio in Costco, and we are working that with our account teams, good progress, but we're not there yet. And over the coming years, that still is a good growth opportunity for us.

We are now going to proceed with our next question. And the questions come from the line of Tom Sykes from Deutsche Bank.

I just had a couple of questions on pricing. So when do you start the pricing negotiations with major retailers for next year's selling, please? And then on out-of-home, what's the difference in pricing power that you see in out-of-home versus large retailers? And do you see, I guess, if cocoa falls, do you tend to hold on to that a little bit more in the product you sell to out-of-home versus the product that you sell to larger retailers.

And I know it's early, but when we think about that sell-in for next year, I mean, are you expecting next year's growth to be a bit more volume-led than pricing led given what is likely at the moment to have happened to raw materials?

Thanks, Tom. Yes, basically, we start discussing our full portfolio plans and marketing plans with retailers in September. So that is where we evaluate the season before, take the learnings, and these are also learnings on stocks and out of stocks, portfolio, what work and not work. And we mostly concluded at the beginning of the year after. I expect that it will be this year the same as it was last year. The pricing strategies and out-of-home all and in-home are a little bit differently.

In out-of-home, you mainly price versus broader snacking price point. So you want to be in line with the bottle of gold, the back of chips, the bar of chocolate and that sort of drives out-of-home pricing. Obviously, a very fragmented channel where we have 3 million cabinets the pricing power of the individual retailers is a little bit lower, but you still want to be in bands of consumer acceptance. And as you know, this business is volume driven. We now have 8 quarters of volume growth. This is also what we like because it drives the economics of the business. But that is the sort of out-of-home pricing in home pricing.

We have strategic pricing brands versus competitive products versus retailer own brands, and we stay very disciplined to that.

We now have time for one final question. And the questions come from the line of Jeremy Kincaid from VLK.

I will make it quick. Just with your organic growth it was positive on the volume side and the price side for all of your regions, except for organic price growth within Europe, which was negative. I was just hoping if you could talk to that a little bit more.

And then my second question was on your innovation rates. It's clearly very high at the moment. I'm just wondering if you have any measure of how much growth those new products contributed to your bottom line or even your organic growth this quarter? And do you think this rate of innovation is required going forward?

Yes. Clearly, innovation is one of our core growth drivers. We said that there is one -- the most important thing is that your core products are better than the same likewise products or competition. So there's always a lot of renovation to keep what lead then we expand. We look country by country, what are the formats? What are the price points? Do we have a good portfolio fill-in, then we have this strategy of taking the core brands in different formats to address different occasions.

And last but not least, we addressed new benefits. We believe this is sort of 40% of our growth of the business. is driven by innovation. So clearly, very important. And we have created an engine that we can deliver this year on year, hopefully, every year a little bit better, but time will tell. On pricing in Europe, we are a volume-led growth business. So we are very focused on getting our pricing right. It's a little bit up, it's a little bit down. It's dynamic. As you know, we were very proud that also last year, we grow volume even in the chocolate segment, for me it's a sign that we are quick click on the reel dealing with pricing issues to keep the volume growing, we'll continue to do that.

Okay. So that's it for the questions. Thank you very much to everyone for joining the call. If you do have follow-up questions, please get in touch with Investor Relations, and we'll be happy to help.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a good rest of your day.

Good morning, and welcome to the The Magnum Ice Cream Company webcast for the Q1 2026 Trading Update. My name is Razia, and I will be your operator for today's call. Before we begin, please note that today's presentation is being recorded. [Operator Instructions]

With that, I'm pleased to turn the call over to Michele Negen. Michel, please go ahead.

Good morning, everyone. Welcome to the Magnum Ice Cream Company's Q1 Trading Update Webcast. My name is Michele Negen, Head of Investor Relations, and I'm here today with our CEO, Peter Kulve; and our CFO, Abhijit Bhattacharya.

The press release and investor presentation were published on our published on our Investor Relations website this morning. The replay and full transcript of this webcast will be made available after the call.

Before we start, I want to draw your attention to our cautionary statement on the screen. You will also find the statement in the presentation published on the website. In a moment, Peter will take a few minutes to talk you through the highlights of our top line performance during the first quarter of 2026. After that, we will open the floor for Q&A with Peter and Abhijit.

And with that, Peter, over to you.

Good morning, everyone, and thank you for joining us for our Q1 trading update. I'm pleased to share that we had an encouraging start to 2026. Before I get into the details, let me give you the headline. The ice cream category continues to grow. We are executing well on our strategy and whilst we are mindful of the heightened uncertainty in the global environment, particularly in the Middle East, we are reaffirming our full year outlook.

In Q1, we delivered organic sales growth of 4.5% with a healthy split between volume growth of 2.9% and price growth of 1.6%. The India and Portugal, we're not in the parameter and paid royalties for the use of the TMICC brands. This was recognized in revenue, OSG and OPG. Excluding these royalties, in Q1 2026, the underlying sales growth was 4.7% with underlying price growth of 1.8%.

Our revenue came in at nearly EUR 1.8 billion, down 1.2% versus Q1 2025. The decline was entirely driven by foreign exchange. The strengthening of the euro created a translation headwind of 5.5% in the quarter. I'm especially pleased with the volume contribution -- this represents the kind of quality growth we aim for and reflects the work that we have done on innovation and execution. We are seeing this working across the business. with every region contributing to our growth. In Europe and ANZ, we grew 4.6% organically, excluding royalties, with positive price contribution excluding royalties, of 0.3%. Volumes were up 4.3%, helped by strong innovations.

Germany and the U.K. delivered high single-digit growth. Italy is still a work in progress. We are improving our distribution and point-of-sale execution there, and I'm convinced we'll get it right. In the Americas, we delivered 2.6% organic sales growth. The U.S., our biggest market, delivered organic sales growth of 3.2% and with a positive volume growth of 1.8%, led by Yasso and Popsico, which both delivered double-digit organic sales growth in the quarter.

Ben & Jerry's grew low single digit as we launched new formats. I will come back to that. The work we have done over the last 18 months to build a truly competitive U.S. business is showing up in the numbers. Sales in Brazil declined in the quarter. We continue to execute our turnaround plan, focused on new innovations more targeted promotional and pricing activities and increased distribution.

In EMEA, we delivered our strongest regional performance at 7.9% organic sales growth with both volume and price contributing. Turkey and Pakistan delivered double-digit growth, while China had a strong seasonal opening driven by innovation including our Pistachio and Blumen Magnum stick a new connect of flavors such as [indiscernible] lemon with light cheese doesn't sound delicious. Our innovations are exciting and contributing to category growth. I'll come back to this to give more color through the lens of our brands.

Our productivity program is on track for the full year with good progress during the quarter. As I've said before, productivity is a core pillar of our strategy. and gives us the fuel to reinvest behind our brands. All scheduled Q1 TSA exits were concluded on time and remain on course to finalize all remaining TSA exits by the end of 2027 as planned.

I would also like to share a brief update on the separation process and the parameter of the business. When we announced our full year '25 results, we said we would be incorporating India and Portugal to the group in '26. We expected this to happen in H1 '26 and and I'm pleased we have already completed the acquisition of our India business on the 30th of March, and we also acquired the business in Portugal on April 1. These businesses will be reflected in our consolidated results from Q2 onwards. On input costs, we expect the increase in the cost of energy across the supply chain including raw materials, energy, packaging and freight to be offset by tailwinds from commodities or mitigating actions and our productivity program.

Whilst we are mindful of the heightened uncertainty in the global environment, particularly in the Middle East and the associated knock-on facts to input cost our regional direct exposure remains limited, and we are taking mitigating actions. Our focus is on executing our growth strategy and productivity program and we are reaffirming our full year outlook. We expect organic sales growth for '26 to be between 3% to 5%. And and an adjusted EBITDA margin improvement of 40 to 60 bps on a comparable parameter basis with 2025. The reported improvement in adjusted EBITDA margin is expected to be between 0 and 20 bps, primarily due to the impact of the acquisition of the India business.

As communicated earlier, we expect the improvements in the year to be weighted more in the second half of '26 due to the phasing of TSAs and the benefits of cocoa pricing.

Now let me take a moment to share with you some more color about our brands, the innovations that are driving our growth. Magnum delivered mid-single-digit organic sales growth supported by the launch of Magnum Pistachio & Peach across the EU and Turkey. We also continued the rollout of the BonBons format across Europe and the [indiscernible]. These are fantastic examples of what we mean by taking a premium brand into new formats to unlock occasions.

Ben & Jerry’ was overall flat in Q1. Americas delivered low single-digit growth, while Europe and ANZ lapping double-digit growth in Q1 last year declined. I mentioned earlier the launch of new formats in the U.S. and Europe. The new Ben & Jerry’ centric and bar formats have been well received, and we expect momentum to build. And in the U.S., Ben & Jerry’ innovations are ranking in the top 10 SKUs with 4 of the top 10 super premium, a strong signal that the brand is continuing to resonate with consumers.

Cornetto delivered low single-digit growth supported by the launch of Pistachio Max in Europe and Turkey and new flavors that supported a strong seasonal opening in China. The Heartbrand delivered high single-digit growth driven by Twister Freeze, the Minecraft stick, Volcanix, the 5-layer chocolate ice cream stick and Solero BonBons rolling out across multiple European markets. Alongside the strong performance of grape ice balls in Southeast Asia.

I also want to call out as Yasso specifically. Yasso is another great example of what we mean by format innovation that expands the category moving from stick to pines unlocking new consumption occasions and new shelf space. It's the kind of thinking we are applying systematically across the portfolio. For those of you based in the U.S. do look out for them. They're delicious.

Before we go to Q&A, let me close with a few shorts that I would like you to take away from our performance this quarter. The ice cream category continues to grow around the world. Consumer demand for our category is good, and we are well placed to capture this. Our growth this quarter has been broad-based with a good balance of volume and price. -- and growth across all regions. On execution, the investments we have made in our frontline first model are delivering results. We are improving brand availability across our 3 channels, growing distribution points and deploying more freezes in high-growth markets.

As I shared in the previous slide, Innovation is driving our performance, helping us to win with consumers. We are well set up for the summer season with better customer engagement. Our outlets activating earlier and innovation rollout showing the frontline first model is working. We are on track with separation. I'm pleased to have India and Portugal as part of the total group.

And finally, we will remain operationally agile as we continue to watch the external environment carefully, and we are taking mitigating actions. In summary, an encouraging start of the year built on sound execution as we prepare for the season ahead. We continue to execute on strategy driving grocery innovation and availability, delivering our productivity program and reinvesting behind our brands.

With that, let me hand back to Michele to take your questions. Thank you.

Thank you, Peter. As we move to questions, I would like to ask you to be mindful and ask your questions in relation to this trading update while limiting it to 1 question each so we can get around as many of you as possible.

With that, I hand over to the operator for instructions on how to ask your questions. Thank you.

[Operator Instructions]

We are now going to proceed with our first question. The questions come from the line of David Roux from Morgan Stanley.

Well done on the the update. I just had a question around commodity costs. I mean you flagged a tailwind from commodity costs through the rest of the year, notably cocoa. But perhaps could you just talk a bit about how are you thinking about dairy and sugar inflation into the second half? And will this be a net sort of headwind and tailwind. And can you just remind me how much of your dairy exposures to liquid milk versus milk powder?

David, this is Abhijit. Thanks for the question. So when we did our year-end call, we were not fully covered or hedged for the year. You do that progressively -- and I think the way the cocoa prices have developed give us a little bit of tailwind. Similarly, on dairy a little bit of tailwind as well, -- so we have -- and a little bit on palm oil as well. So overall, on all these 3 elements, we've got a little bit of tailwind compared to the place we started off the year. And that's helping, of course, to partially offset the headwinds that we get from the whole fuel situation with the crisis in the Middle East.

We are now going to proceed with our next question and the questions come from the line of Warren Ackerman from Barclays.

Good morning, Warren here at Barclays. Ask 1 question, but I want to give it go. Can you maybe, Peter, kind of sort of dive into a couple of the geographies in a bit more detail. I mean Brazil and India both been in turnaround mode, India obviously coming into perimeter. How should we think about those 2 big ones the balance of the year? And then maybe just related on North America, it seems like things are picking up a little bit. Can you maybe kind of go into a little bit more detail of what you're seeing in terms of market trends, categories, et cetera, and brands?

Let me start with the U.S. The ice cream market continues to grow with approximately 3% latest readings that is driven by consumers moving out of bulk ice cream into handheld ice cream, better quality, higher price or more healthy. as we discussed before, GLP-1 strengthens this trend. So American market is solid. We look at weekly shares, monthly shares, but when you look at the last couple of trend lines our share is good in these markets, driven by some really successful innovation like the Bluey [indiscernible] like the Yasso pines, which now are taking really serious share. So innovation and execution growth in the States on the back of a good market.

Then when you look at India, last year, we basically changed everything in India. We moved from -- fat ice cream, which made us a frozen dessert to dairy, ice cream. We are progressively changing the portfolio, doing a major step-up of quality. Reprice corrected and brought us the portfolio in line with core snacking price points. We basically built a completely new team, and this is literally completely and we changed our distribution approach. Unilever traditionally did not invest in cabinets nor in distributors with cold stores, and we basically brought the our classic Turkish distribution model to India, and we started to invest behind it.

We now see volume picking up. And as I said before, India is the largest dairy market in the world. Within time, it will also be the largest ice cream in the market, in the world, and we'll take -- we will work very hard to take our fair share there. Profitability is still not very good. We are investing behind the business, but especially need to make a supply chain intervention because historically, we had 1 factory and with our current growth rates, we need 4 factories. And we're working on -- and when we do that and we get the growth and get the premium brands growing, Magnum is growing plus 50% at the moment. At the third moment, profitability will come.

That is 2 good stories. In Brazil, we changed all management because I believe we have an execution problem. And we did have an execution problem, but it's slightly more so our pricing is not correct. We are not in line with cost snacking price points, and I need to do a portfolio adjustment which will take time just like it took time in India. Fundamentally, Brazil is a very good, fast-growing ice cream market.

We are now going to proceed with our next question. And the questions come from the line of Robert Jan Vos from ODDO BHF.

I thought that your [indiscernible] wire had a bit more cautious tone about trading than the solid growth that you reported this morning. Is it fair to assume that growth accelerated in March and related to this momentum continue in April?

It is the beginning of the year, and we stand firm with the guidance that we have given last year, the 3% to 5% growth to 40 to 60 bps underlying margin improvement. And what is really pleasing that operational rigor is improving in this business. That was the core problem, whether that was channel and customer execution, marketing and innovation execution, our demand creation programs. And we also seem to have more grip on cost and productivity. So that is basically driving the results.

We are now going to proceed with our next question. And the questions come from the line of David Hayes from Jefferies.

So my question is just on the Asia risk in terms of out-of-home behavior is changing? And I guess, in terms of energy uses freeze some of these markets in Southeast Asia, they aren't use air conditioning. So we're thinking is that a risk for freezes in store outlets. So just wondering, a, is that a dynamic that you're seeing markets like the Philippines, Indonesia and what the percentage of sales exposure would be to those kind of markets, that kind of dynamic?

Thank you, David. As you know, some Asian markets have subsidized energy markets like Indonesia. They don't have that in Philippines. I think we see a little bit the same as we saw during COVID that when -- it hasn't happened yet, but it could happen when consumers go under stress they go less on trips. They don't take the car anymore, but stay around their houses, which tends to be a good thing for us because we have very fine based distribution. You literally find us arms legs of desire in Asia. -- maybe you can't afford to go to a restaurant anymore, but you can still afford to have a nice ice cream after your [indiscernible].

So in general, we don't see anything yet. But when people stay more around their houses, that tends to be a tailwind instead of working against us.

We are now going to proceed with our next question. And the questions come from the line Celine Pannuti from JPMorgan.

So my question is on the growth and the balance of the year. So basically, you started very strong Q1 with the the growth at the top end of your 3% to 5% range. Obviously, we know there is a timing of Easter, which we've seen in other companies like the segment like softdrinks and beer, for instance. Would you agree that -- and can you quantify to which extent that has helped? And then obviously, we are mindful that it is a tough comp in the second quarter. So if you could give us a bit of color on that. And I presume the other 1 on Q2 is the impact on Middle East in Turkey, which is 1 of your big markets. Are you expecting a low incidence of tourism to have an impact? I know it's a broad market share you have there with not just risk, but if you could give us a bit of an overview of your thinking around that big and profitable market.

Okay. Let me start with Turkey. Turkey had a very strong start of the year, approximately 5% and of our sales goes to tourists. So it's not a big impact. But assume because 1 of the -- you guys wrote an article on tourism in Turkey, but assume that the tourists are down, that's 20% or 5%, not assuming that the cheap -- would go to Turkish tourists. So this is not going to have a really big impact on the business. And when I go to Q1, our most important festival this quarter is actually a Ramadan because as we know, as part of our occasion-based growth model, we activate all these festivals, but a really good Ramadan this year, Indonesia, Pakistan. We had a good Chinese New Year, which is a large 1 as well. And Easter was a little bit earlier in April than last year, and that will have a marginal impact on our Q1 sales. Just a little bit, nothing meaningful.

We are now going to proceed with the next question. And the questions come from the line of Jeff Stent from BNP Paribas.

Just a point of clarification on the commodities. So you said compared with where you were at the start of the year, dairy and palm oil are now more of tailwind, yet when I look at any price index for dairy powders or palm oil, they've increased quite markedly. So if you could just elaborate why those are now more of a tailwind, but that's so much at odds with what's happened to market prices?

Yes. Jeff. So we actually covered pretty in the year and basically, the prices that we covered for the full year are better than the prices that we had assumed. So the assumptions that was there was slightly higher. So that gives us to -- in our model a bit of a tailwind to partly offset the headwind that we talked about.

We are now going to proceed with our next question. And the questions come from the line of Antoine Prevot from Bank of America.

So I wanted to drive a bit more on Europe and Australia, very good volume mix there. Could you impact a bit the drivers here, especially because it's significantly better than what I can see on the scanner data. So anything to flag here? And could you quantify -- I mean, you said Easter is not big, but I guess, see some benefit into Europe. So any quantification of the impact for this year on Q1.

What we said when we presented ice cream for the first time last year, is that what the business really needs is operational rigor. -- and our operational rigor is improving. We were earlier with our innovation this year. They were ready in time. We were earlier with activation of outlets we have better customer programs. And that's in Europe because in Australia, we're obviously in core summer. And that is basically driving this extra little bit of growth. And that's why we're also confident to reaffirm our guidance for the year. The impact of Easter 10 days earlier in April, as I said to Celine, is really marginal, doesn't have a really big impact.

Our business in Australia, we don't often discuss Australia had been struggling for a number of years, but our [ minthol ] factory performance has really come back after many years of struggle, which helps. So we have supply. Our innovation programs are good. And generally, we have a good run in Australia with good shares for the first time in many, many years.

We are now going to proceed with the next question. And the questions come from the line of Bingqing Zhu from Rothschild & Co Redburn.

I think when -- in the Capital Markets Day, you've outlined the target to grow the cabinet freezer number by 2% per year over the next 5 years. Can you share the progress on which regions or market we will see the most addition and of course, the number is not just about numbers. Can you also talk about what you're doing to enhance freezer deployment or maybe raise the return on investment on your existing freezers just getting ready ahead of the summer season?

Bingqing, this is a very good question. When I talk about operational rigor, obviously, the cabinet system is really important. It's not just buying the cabinets, but having the distributors the IT systems, the replenishment, the maintenance in order. It's very operational intense, and we made really good progress. Hence, we can start outlets earlier. When I look at India, I believe in India, we have placed 50,000 cabinets and activated them over a 2-month period. So we really develop a muscle to do this really well. And then when you have a portfolio that rotates with brands that are attractive -- at attractive price points, you relatively quickly get volume going through these assets. And then as we have said before, in 2, 3 years' time, we have fewer payback on a new cabinet.

But it's all about operational rigor and it's not perfect yet. It's never perfect, I suppose, as a CEO, but we are getting better.

We are now going to proceed with the next question. The question comes from the line of Karel Zoete from Kepler Cheuvreux.

Yes. I have a question on the Americas. So in the U.S. market, you did 2% volumes even better on top line growth. But Americas in total is down. Can you speak a bit about the other markets, for example, Mexico, Latin -- and related to that, what can we expect around World Cup activation. Is that going to be potentially a trigger for the category as well?

who the [indiscernible] Karel. Yes, World Cup activation. Events are for us an opportunity to draw people to the cabinets and to the retailer shelves -- and in different countries, we have activations, whether that is special ice creams or promotions -- and this 1 just like America 250 is 1 of these occasions that you can make the category relevant, especially when lots of people come together in their houses. -- ice cream is a fantastic way to celebrate.

But going back to your first question, yes, the United States had a very strong start of the year on the back of a strong ice cream market. Volume-wise, South America was weaker. Main culprit is Brazil, where we had declining volumes as we haven't got the core price positioning of the category right. And we're working on that, but it always takes time before you have realized most of your portfolio at different price points with different different executions.

We are now going to proceed with our next question and the questions come from the line of Samantha Darbyshire from Goldman Sachs.

My question is kind of more around the mechanics of how you actually sell in your products in Q1. And -- and I'm just thinking about this because in Q4, you bought back some stock from the freezer cabinets. And as we come into Q1, does that impact selling back in -- do you have any kind of retailer buy-in ahead of the weather getting better, so not just thinking about Easter, but do you have any material impact there? Just trying to understand because we're not quite as familiar with the mechanics of how this business works, yes.

Good question, Sam. We have in-home channels, grocery channel, and we have cabinet channel. In grocery, retailers have winter assortments and summer assortments. And our job is to get as large possible share of the shelf and then later share of promotion. And I think this year, we were across the world, very successful with our shelf programs, which will definitely have helped in Q1. Then when it comes to cabinets, cabinets get activated at the beginning of the season. Sometimes retailers don't have a lot of stock in their cabinets anymore. And then you load -- you basically replenish these cabinets to be ready for when the sun is there and you place new cabinets or you reallocate cabinets from poor locations to better location. And that is the sort of work that happens in Q1 and still also in Q2.

Maybe clarify, Sam, you mentioned about taking cabinets back in Q4. I just want to clarify that, that was nothing out of the order. In the Q4 call, Peter was just explaining that's how normal business works. We take cabinets back, refurbish them and put them out in the trade. So there is no impact of taking stock back and then giving it back in the Q1 numbers. We really run and this is our deep, deep belief, we run the business on fundamentals and operational rigor that is in the complexity of an ice cream business, that's the only sensible thing to do.

We are now going to proceed with the next question. And the question is from Maxime Stranart from ING Bank.

I hope you can hear me this time. So 1 question on my end. We have talked a lot about innovation in this quarter. could you maybe elaborate on the contribution of those new products you have launched over the last 12 months of top line growth and how the older portfolio has performed as well -- that would be all for me.

It's still early days to see what's going to be the big winner of our innovation. But we have, as presented also at the CMD changed our innovation strategy. Historically, this business did a lot of flavor innovation, flavor rotation innovation. And although that's important to activate the brands it doesn't tend to drive growth. When you really structurally want to drive growth, you need to make your brands relevant in different occasions. And moving from a Ben & Jerry’ pine to a Ben & Jerry’ sandwich is a really good example of that. it's very difficult to eat Ben & Jerry’ [ pint ] when you're driving a car.

The sandwich is made for on-the-go consumption. And by the way, also incredibly addictive delicious. But -- so our innovation is shifting to occasions and formats -- and I believe next year, the operational rigor and execution and sales that will also help to drive category growth. And when you are the 1 who drives category growth, it tends also to be good for your shares.

We are now going to proceed with the next question. And the questions come from the line of [ Andre Candria ] from UBS.

Good morning, and thank you, Peter Abhijit and Michele. One for me, please, on your margin guidance. Obviously, you've already spoken about your costs increasing as a result of the crisis in the Middle East with 1 of the offsets being commodity tailwinds from cocoa, dairy and palm oil. However, could we see your gross margins essentially expand less over the full year as a result of these with SG&A being used more as a source of savings? And within that, will you still seek to grow your A&P this year versus last .

Andre, let me give you some color on that. As you know, the situation with the inflation of specialty related to oil is quite fluid. So we work on a number of scenarios to see what mitigating actions we trigger at what point of time. But let me give you 3 big buckets. So the first 1 is on revenue growth management, where we look at our discounts, et cetera. So that we expect to recover about 1/4 of our headwinds through better and more rigorous revenue growth management. About 1/4 of the headwinds will be mitigated through what I spoke about earlier, the tailwinds that we have on commodities compared to the start of the year. And the remaining half will come through a certain acceleration of productivity measures that were in the pipeline, but we have quickly kind of underpin them and make the investments necessary to get them.

Now regarding advertising and promotion, we continue to spend what we mean to all advertising. We are not forced to cut advertising to make the targets. Having said that, I think Peter mentioned in our Q4 call, we have shifted agencies. We are moving to much more digital content creation and some of those productivity measures will come. But in terms of working media and what is visible to our consumers, we will continue to invest what we need to -- and no cuts there.

And the question come from the line of Tom Sykes from Deutsche Bank.

Yes, just a follow-up on this sell-in commentary that you've given. I mean you've historically made 70% of your EBIT in H1. So just to clarify some of the things you said -- did you say you started a little bit earlier. So does that mean that there's a bit of extra sell-in, if you like, ahead of consumption rates is the actual cabinet square footage higher? And do you expect, therefore, the sell-in ahead of the season in the Northern Hemisphere to be higher?

And given your cost commentary, isn't that all largely H2? I mean your costs must be covered and largely sort of sorted for H1. Maybe there's a bit of inflation. Doesn't that mean you will largely know your EBIT for H1, which is your highest semester?

Thank you, Tom. Yes, we were -- as we said in our last call, we were largely covered for H1 with most of our costs, including energy. So you're right. So that brought us a little bit of time to do all the mitigating actions for H2. And last year, we had 380 bps cost inflation. -- which was, of course, quite a shock to the system. But we developed a real muscle to develop with cost shop. So that was the advantage of this unfortunate cocoa spike. So we built a muscle to deal with shops.

Then coming to cabinets, we have said at the Capital Markets Day that growing our cabinet fleet and distribution versus declining what happened in the Unilever days. Actually, we would give 0.5% to 1% of additional growth and that is coming through. Activation of the fleet always happens in Q1 and early Q2. And yes, maybe we do it now with a little bit more disciplined, but that's not the big change. But we're actually growing distribution, whether that is shelf positions, in grocery, that is shelf positions in grocery or whether that is out-of-home. And you're right, that's helping to drive growth. in line with plan, I have to say. So also no surprises there.

We are now going to proceed with the next question. And the questions come from the line of Jeremy Kincaid from VLK.

My question is on the Ben & Jerry's brand. Growth there slowed in the first quarter, it was flat overall and declined in Europe and ANZ. So I'm just curious about how we should think about the trajectory for that brand for the rest of '26. [Audio Gap] and if you're seeing any impact from ongoing brand reputation concerns in certain markets?

Brand health of Ben & Jerry is really solid. You could even argue noise -- more noise is good for the brand. Momentum of the brand, shares of the brands are very solid. Last year, we had 14% growth in Europe, ANZ in the first quarter was very difficult to beat that. We had a different trading strategy for this year. But the real big news is that we take Ben & Jerry’ now very forcefully and rigorously out of the pines in other formats that unlock new occasions. I'm convinced Ben & Jerry will have a very good growth trajectory in 2026 on the back of innovation and strong demand creation programs.

With no further questions showing, I will now hand over to Michele to close the call.

Yes. Thank you. Thanks, everyone, for joining the call today. Much appreciated. Any follow-up questions, don't hesitate to reach out to us, and have a nice day for now.

Bye-bye.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Good morning, and welcome to The Magnum Ice Cream Company Webcast for the Full Year 2025 Results. My name is Heidi, and I will be your operator for today's call.

Before we begin, please note that today's presentation is being recorded. [Operator Instructions]

With that, I am pleased to turn the call over to Michele Negen. Michele, please go ahead.

Good morning, everyone. Welcome to The Magnum Ice Cream Company's First Full Year 2025 Results Webcast. My name is Michele Negen, Head of Investor Relations, and I'm here today with our CEO, Peter ter Kulve; and our CFO, Abhijit Bhattacharya.

The press release and investor presentation were published on our Investor Relations website this morning. The replay and full transcript of this webcast will be made available after the call as well.

Before we start, I want to draw your attention to our cautionary statement on the screen. You will also find this statement in the presentation published on the website.

In a moment, Peter will talk you through the key elements of our performance in 2025 and how we are executing on our strategy. Abhijit will then look at the financial performance in further detail by talking you through revenue, profitability, cash flow and looking at the financial outlook for 2026 before Peter closes. After that, we will open the floor for questions.

So Peter, over to you.

Good morning, everyone, and thank you for joining us today. I'm pleased to welcome you to The Magnum Ice Cream Company's first full year results call as a separate publicly listed company. This is an important moment for our business as we present our performance as a focused global ice cream company and outline what we're going to do to position TMICC for sustainable, profitable and competitive growth.

2025 was a foundational year for Magnum. It was a year of operational and strategic progress and delivery against a challenging macroeconomic climate and serious headwinds from commodity inflation at an unprecedented level of 380 basis points. At the same time, we completed the demerger and set up the business with the right structure, governance and most importantly, talent and culture to drive accountability and profitable growth.

In headline terms, we delivered a solid performance in 2025, with full year organic sales growth of 4.2%, and I was particularly pleased that volume grew by 1.5%. Every region contributed to growth with market share gains across most markets. This was supported by improved availability, innovation, strategic pricing and operational rigor.

To build on the volume growth in 2024, we made the decision to price competitively across brands and geographies to enable volume growth despite this intense cost inflation. In the year, we also right priced our portfolio in several geographies and corrected trade margins in China and Southeast Asia. These actions were geared towards getting our business fundamentals in the right shape, and it worked.

Forex movements and TSA-related cash costs affected adjusted EBITDA margin. But excluding these impacts, adjusted EBIT at constant exchange rates was up by EUR 48 million as disciplined execution of our productivity program supported by select pricing actions partially offset the impact of commodity price inflation. The strength of the Magnum brand was evident as we maintained volumes despite price increases to mitigate cocoa inflation.

Before I talk about our strategy and performance in more detail, a word on quarter 4. The final quarter of the year is our smallest quarter, representing around 15% of full year sales. Many of our typical faster growing away-from-home markets, such as Turkey and China, have a limited contribution in this period. In these markets, we used this time of the year to take back cabinets and trade stock to get the cabinet fleet ready for next year's season.

As a result, in Q4, the Americas drive over 50% of Q4's revenue compared to around 1/3 for the full year. This year, disruption in food stamps in the U.S. and a late start to the Brazilian season impacted the fourth quarter. While we continue to outpace the category, both in the Americas and globally, it was more challenging, which led to a decline of less than 1% OSG in the quarter.

As this is our first results call since the separation from Unilever, I want to take a step back and remind you of the market opportunity and strategy we outlined at the Capital Markets Day in September. The ice cream market is resilient. In many ways, we are the lipstick of foods. I just returned from Brazil, and it was interesting to hear direct from consumers that even economically challenged families make space for ice cream in their family budget.

In 2025, the market continued to grow by 3% to 4%, in line with the last 10 years. This growth was again driven by penetration and distribution build in emerging markets, in more developed markets by the trend from larger to smaller and more premium handheld portions and increasingly better for you, high protein, local, real fruit products.

Our thinking on GLP-1 has evolved even since the Capital Markets Day in September based on the premium treat substitution effect. When people eat less overall, the question is which treat is the winner. And the data is telling an increasingly clear story. When on GLP-1, people still treat themselves and ice cream is a very competitive treat. The category premiumizes as people choose smaller portions, better quality and when on offer, more real fruit and protein. We believe that GLP-1s will accelerate the premiumization of the category, which is good for Magnum.

Further, as consumers using GLP-1s are eliminating low-quality munching categories first, categories like premium chocolate, premium ice cream and protein snacks could gain share in the overall snacking market. Increasingly, these trends are guiding our innovation and portfolio strategy, and you will see that come through today. Our vision for TMICC in this market is simple. We want to make the most loved ice cream in the world to grow the market and build a highly competitive snacking business for our shareholders and customers because life tastes better with ice cream. And we're going to do that by delivering our strategy to grow the ice cream market as category leader.

Our plan is built on 3 pillars: growth; productivity; and reinvestment. As its course, that means combining the strengths of our brands with a business system designed specifically for ice cream, enabling faster decision-making, sharper execution and disciplined capital allocation to maintain an investment-grade balance sheet.

Our growth strategy is built around growing consumption occasions with market-making innovation, pricing competitively across all snacking and refreshment price points, rolling out premium brands internationally and take the multi-format, driving digitally led demand creation and massive out-of-home visibility, increasing our availability across channels, especially e-commerce and in emerging markets away-from-home.

Importantly, this growth is enabled by a EUR 500 million productivity program that resets our supply chain and structural cost base. This gives us the fuel to reinvest behind our brands, capability and leadership through disruptive innovation, increased demand creation and best-in-class digitized execution. The strengths of our portfolio, channel management and global footprint give me confidence in our strategy and our ability to win in the market.

We own some of the most iconic brands, Magnum, Ben & Jerry, Cornetto, and then, of course, what we call the Heartbrand, which encompasses brand names like Good Humor, Ola, Algida, Wall's and sub-brands like Solero, Calippo, Carte D'or and Twister. The strength of our brands has translated into leading market share positions across most channels in our core markets and critically in the fast-growing digital channel, which is growing double-digit.

So we have a well-balanced portfolio, world-class brands that grow ahead of market, clear growth opportunities through our presence in fast-growing emerging markets and in established markets like the U.S., our biggest, China, the U.K., Germany and next to that, a very strong channel footprint.

Our performance in 2025 reflects the success of our strategy and the choices we made. A core pillar of that strategy is winning through scale, innovation and premiumization, not as one-off launches, but as a repeatable growth engine. In 2025, that engine delivered across our leading brands, combining premium formats and stronger execution to drive growth and share gains across the vast majority of our key markets, including the U.S.A., our biggest.

Magnum outperformed with the launch of Utopia and BonBons. Ben & Jerry gained share in the U.S. and Europe across the at-home and away-of-home channels with its unique socially led digital model, sustaining strong relevance. Cornetto grew ahead across its top 10 markets, supported by the Cornetto Max and a new stick format in China. And the Heartbrand grew through socially first excavations with our multilayer stick architecture now scaling from Asia into Europe to secure a first-mover advantage.

We are also extending this engine into the formats shaping the category, better for you and portion control. Yasso grew over 30% in 2025 as we expanded into the new formats in the U.S., while Breyers CarbSmart continued to grow. We also moved Magnum and Ben & Jerry into bites, and we are extending this to other brands, including Solero and Cornetto.

Finally, we are getting faster from idea to launch. Magnum Dubai chocolate in Turkey was delivered in 6 months from concept to shelf. But as all of us know, it's not just about innovation. It's about execution in market. Most markets are seeing meaningful channel shifts with growth moving to digital, convenience and value-led formats. Our strategy is to win where the mix is shifting and availability expansion across channels progressed significantly in 2025.

We were an early mover into digital commerce, and it remained our fastest-growing channel, delivering double-digit growth. In China, it is already more than 20% of our sales. Click & Collect is going from strength to strength in the United States and many European markets. In at-home, we grew mid-single-digit by stepping up customer execution with a new fully dedicated TMCC (sic) [ TMICC ] sales force, which enabled us to gain better shelf positions and promo effectiveness, whilst executing improved customer growth plans across markets. Away-from-home achieved mid-single-digit growth. This was supported by the second year of cabinet fleet expansion in relevant markets, progress on route-to-market digitalization and a stronger frontline organization.

Alongside delivering growth, we continue to successfully execute our productivity program across supply chain transformation, overhead reduction and tech-enabled productivity, delivering EUR 180 million further savings this year. This is on top of the EUR 70 million savings delivered in the second half of 2024, bringing cumulative savings to EUR 250 million.

Key actions included reducing SKU complexity and focusing resources on our most productive innovations. We freed up capacity for our global brands in local markets and invested in our factories to remove capacity constraints and hasten innovation speed to market. We are also making significant progress in reducing under-the-skin complexity, strengthening demand forecasting and seasonal planning using advanced weather forecasting models, which are being integrated into our planning systems, driving end-to-end cost discipline across procurement, logistics and overhead. This was evident across the regions, but particularly in the Americas.

The U.S. end-to-end supply chain reset enabled growth and realized efficiencies and cost savings through factory modernization, distribution optimization and improved procurement, continuing the process of exiting RTSA as planned with an expectation to be complete by the end of 2027.

These actions are not one-off. They are structural improvements that will continue to benefit TMICC in the years ahead and fuel our reinvestment strategy to power the flywheel of long-term growth and profit improvement.

We are reinvesting for growth and productivity. Cabinets are a key part of this as a critical enabler of growth and sometimes overlooked or misunderstood moat in our business. Our cabinets are like soft drinks chillers. They provide unique advantages that help us to maintain and grow market leadership. In 2025, we increased cabinet CapEx by around 10% to grow our market-leading fleet of 3 million cabinets. And we began deploying new technology to better forecast out of stock and to spot trends.

The impact of our growth strategy, combined with improved execution was proved out in each of our regions. In the U.S., our biggest market, we gained share for the second consecutive year, 24 basis points, and we are solid #1. We delivered organic sales growth of 1.7% and volume growth of 1.8%, which is high in the U.S. snacking industry.

2025 was a year of significant operational progress in the U.S. We finalized our organization with a dedicated ice cream sales force. Disciplined execution of our productivity program helped us to become cost competitive and reenter the club and value channel with good progress, but we have more to do. Joint customer plans with key omnichannel partners like Walmart and Target, delivered strong results across store and digital channels. Ben & Jerry and Yasso grew double-digit in e-commerce on year. And our performance on Amazon went from strength to strength.

In Europe, Australia and New Zealand, strong performance in the U.K., France and Spain led to an OSG of 3.3% and market share gains for the second year in a row with 37 basis points in 2025. Growth was driven by strong innovation and brand performance, but critically was enabled by operational rigor, improved physical availability, new value channel listings and strengthened partnership with key retail customers.

Our performance in Italy is still a work in progress, but the performance in the U.K. was truly outstanding. We not only drove strong sales, helped by favorable weather, but also took share. Overall, it may not have felt like that in London, but the weather index in Europe and ANZ was close to the long-term average.

EMEA delivered double-digit growth of 10.9%, with 4.5% volume growth and share gains. Turkey and Pakistan delivered double-digit growth. In Turkey, premium innovation and better distribution in the HoReCa channel drove volume growth. In Pakistan, growth was driven by an expansion of cabinets, seasonal packs and snacking formats. As mentioned before, in China and Indonesia, we delivered high single-digit growth and share gains by improved channel and customer execution. including right-setting trade terms and a strong innovation program. It was the first that a Chinese concept, the multilayer stick has become a global innovation.

Looking ahead, while the external environment remains uncertain, the ice cream market has good momentum, and we have a strategy that continues to deliver. We also have an exciting pipeline of innovation landing in 2026. As I said during the Capital Markets Day, the ice cream category had gotten a little bit stuck in nostalgia and creamy indulgence, and we are clear on the opportunity of bringing modern snacking and refreshment benefits to the ice cream category.

There are 4 distinct pillars to our innovation strategy, which I will talk you through. And on the slides, you will see some of the fantastic new products we are bringing to market in the year ahead.

Firstly is core superiority. We carefully benchmark every single core product versus the competition and continuously improve where appropriate. Over the last 18 months, we have relaunched 80% of our core products and have invested in better ingredients and formulations. Secondly, we perfect the portfolio by sharpening the right mix of format, flavor, pack and price to match occasions and channels. Especially in the U.S. and Europe, the teams have made great progress in optimizing our portfolio. Third is the global rollout of our premium brands. and a deliberate strategy to take their core brand promise into new formats to unlock incremental penetration and usage. The last pillar is category expanding innovation, taking ice cream into new benefit areas such as better for you. For example, we are launching an hydration ice cream, scaling protein propositions, introducing new high fruit content ices, and investing in nascent sugar replacement technology.

In regards to outlook, the ice cream market is expected to grow between the 3% to 4%. We expect organic sales growth for 2026 to be between 3% to 5% with underlying margin improvement.

Now I will hand over to Abhijit, our Chief Financial Officer, who will take you through the financial performance in more detail. Thank you.

Thank you, Peter, and good morning, everyone. I'll walk you through our financial performance for 2025, focusing on revenue, profitability, cash flow, capital allocation and our financial outlook for 2026.

Starting with revenue. For the full year, TMICC reported revenue of EUR 7.9 billion with an organic growth of 4.2%. Price contributed approximately 2.6 percentage points, reflecting disciplined revenue management and selective price increases to partially combat material price inflation. Most encouragingly, volume and mix was up by a healthy and competitive 1.5% despite cautious consumer sentiment in some markets, primarily the Americas. Innovation contributed meaningfully to growth in our premier brands, as Peter just highlighted with several super examples.

Geographically, all 3 regions contributed to growth for the year. Europe, Australia and New Zealand delivered a solid growth of 3.3%, led by strong innovations, a disciplined and strategic approach to pricing and improved execution in core markets, including stronger customer relationships and new value channel listings. Our productivity program delivered EUR 72 million of savings as planned.

The adjusted EBIT margin in the region declined operationally by 70 basis points and an additional 30 basis points due to lower royalties. Operational profitability in the region was impacted primarily due to raw material price increases, mainly cocoa. In addition to these factors, previously allocated depreciation costs, which are charged as cash cost from the second half of 2025 due to the transitional service agreements, impacted the adjusted EBITDA margin by 50 basis points.

Now let me move to EMEA, which is Asia, Middle East and Africa. EMEA grew by double-digits with strong momentum in many of our markets, notably Turkey, Pakistan, China and Indonesia. Across markets, we have expanded availability with more cabinets, met key snacking price points and continue to land premium innovations, including Volcanics, our first premium multilayered stick in Asia and Turkey. Profitability was impacted by rising cocoa price and hyperinflation in Turkey.

The Americas was resilient with continued market share gains and distribution expansion. In the U.S., we expanded availability with new value channel listings and more cabinets and helped to grow the market with premium ranges in higher growth segments. This led to strong volume growth in the U.S. of 1.7%. In Brazil, we have reset the team, our promotional and pricing strategy and invested in cabinets, and we are seeing early signs that this is working.

On an adjusted EBIT basis, margin was up 10 basis points for the region as the productivity program more than offset the inflationary impact of raw material prices. On an adjusted EBITDA level, the reduction of 60 basis points was primarily due to the impact of depreciation becoming a cash charge due to the start of the transitional service agreements in the second half of the year.

Now turning to profitability. Year-on-year on a reported currency basis, adjusted EBITDA declined by 100 basis points, of which 50 basis points was due to the translation effect of currency and 50 basis points due to the commencement of the transitional service agreements with Unilever in the second half of 2025, where depreciation charges will be charged as a cash cost during the period of the TSAs.

To give you a bit more color, let me start with gross margin, which was resilient, but impacted by commodity and other supply chain, cost inflation in 2025 of 380 basis points, primarily due to significant cocoa inflation. Selective pricing actions had an impact of 230 basis points, which helped offset part of the commodity headwinds of 380 basis points.

Supply chain productivity savings of 170 basis points, together with the pricing actions that I just mentioned, more than offset the massive commodity headwinds. In addition, there was a negative 50 basis points impact from FX translation. Therefore, operationally, excluding FX, we were able to improve gross margin by 20 basis points, while the reported gross margin was down by 30 basis points.

Secondly, our SG&A cost increased by 20 basis points, primarily due to double running costs as we ramped up our group functions, reinvested in our front line with more dedicated sales representatives and other strategic investments, for example, resetting the route to market in Italy. Our overheads productivity program delivered savings of EUR 40 million, which offset inflation for the year. These savings were driven by organizational simplification, tight control of discretionary spend, productivity initiatives across the functions. Importantly, we achieved this while continuing to invest behind our brands, particularly in marketing and innovation.

So to conclude, although the adjusted EBITDA declined in the year due to the factors just mentioned, our underlying performance was resilient as adjusted EBIT at constant currency increased by EUR 48 million as the significant raw material headwinds were more than offset with productivity savings, pricing, premiumization and operating leverage.

I'd like to spend a bit of time to help interpret the cash flow for the year, given that we are operating on an interim operating model till 2027.

Let me draw your attention to the next slide of the deck. The first thing is to make the free cash flow of 2024 and 2025 comparable. Since we were part of Unilever in 2024, we had very low interest cost as the interest cost for 2024 only covered entities dedicated to the ice cream business.

Further, due to the operation of the transitional service agreement with Unilever, depreciation costs are now part of cash costs charged to TMICC, hence, the so-called comparable free cash flow for 2024 is EUR 660 million. The comparable number for 2025, excluding separation-related costs, is EUR 602 million. The difference of the EUR 58 million comprises of 2 items: higher CapEx of EUR 31 million, of which around 1/3 is from additional cabinets and the rest for capacity and productivity; and number 2, the negative translation effect of foreign exchange of EUR 27 million.

Our cash flow further had the effects of the demerger costs and the transitioning of -- to the interim operating model, which amounted to EUR 564 million, leading to a net free cash flow of EUR 38 million. We ended the year with a net debt-to-adjusted EBITDA ratio of 2.4x, in line with our stated capital allocation policy.

A brief word on the effective tax rate. The effective tax rate as reported is 31.3%, excluding the impact of adjusting items such as hyperinflation, which is noncash and nondeductible VAT arising from the separation, the adjusted tax rate for the year was 26%, which is in line with our medium-term plan of 25% to 27%. For the year 2026, we expect the adjusted effective tax rate to be around 27%, at the upper end of our midterm plan.

I would like to provide some clarity on our perimeter. We had 3 entities that didn't transfer to us on December 6, 2025, the demerger date. Subsequent to that date, we've had the Indonesia business transferred to our company. We have secured the necessary permissions for the listing of the Indian business, and it will be listed in the stock exchange in India by around the middle of this month, which is earlier than planned. We then expect to acquire the Indian business in the first half of this year, subject to regulatory approvals. The last business that will move to us will be the Portugal business, which is expected to be acquired by us in the first half of this year. So our plans are now firmly on track.

We issued our debut bond on the 19th of November 2025 and received a good response. Our offer was oversubscribed by over 7 times, and we were able to secure our financing needs as a stand-alone company at very competitive interest rates.

In order to help you with your modeling in the initial years of us being a stand-alone company, I would like to give you some estimates for the year. We expect net finance cost to be around EUR 180 million for the year. We expect adjusting items for the year to be in the region of EUR 425 million to EUR 450 million, primarily for cost to build our new IT stack as well as separation and restructuring expenses. Going forward, we will publish on our website a company compiled consensus on a half year and full year basis. We will also publish the exchange rate impact based on actual movements in FX rates expected for the next half year, after this call, and publish an update just before the end of the half year and the full year.

Let me finish by giving you the outlook for the year. Looking ahead, while we are mindful of macro uncertainty, our expectations are as follows. We expect organic sales growth for the full year 2026 to be between 3% to 5%, with the ice cream market expected to grow between 3% to 4%. For the full year 2026, we expect adjusted EBITDA margin improvement of 40 to 60 basis points on a comparable perimeter basis. The reported improvement in adjusted EBITDA margin is expected to be 0 to 20 basis points, primarily due to the impact of the anticipated acquisition of the India business in the first half of 2026. We expect the improvements in the year to be weighted more in the second half of 2026 due to the phasing of TSAs and commodity prices.

Peter, back to you.

Thank you, Abhijit. To close before we go to the Q&A, we operate in a market that is large, is growing ahead of core foods, is highly resilient and has attractive returns. We are the largest ice cream company in the world with 160 years of expertise and heritage. We have a portfolio that is well positioned for growth with world-class innovation and strong brands, channel positions and geographic footprint. As a new stand-alone company, our governance is in place and operating effectively.

We are building a strong frontline focused organization with the capabilities and culture to capture the market and value opportunity. We have a clear strategy to deliver growth and improve productivity, and we are delivering on it with a solid full year operational performance that has proven that we can cope with even extreme input cost shocks. The day we listed in many ways, was the end of the beginning. Now the hard work begins, but we are ready as an energized, as a one Magnum team to deliver.

We will now take your questions.

[Operator Instructions] We will take our first question. And the question comes from the line of Warren Ackerman from Barclays.

Hopefully, you can hear me okay. It's Warren Ackerman here at Barclays. So I've got one question and one follow-up. So my main question is around the -- just to get a bit more clear on this EBITDA margin guidance because I think sell side has quite a wide range of estimates. So you're saying 0 to 20 bps kind of all in on a kind of comparable basis. Can you maybe say what India will be? I think we know that India was EUR 200 million last year with 0 EBITDA. But what's your expectation for India when you buy out? Is there -- so any color on India? And then what happens around the India royalty because I thought that was also a 20 bps headwind on EBITDA in '26? I'm just trying to understand this TSA phasing and commodity to try and sort of, if you can give us some -- a bit more color on those kind of moving pieces on the perimeter, but also a little bit on the phasing and the commodities? It's still a bit unclear to me on that.

And then the follow-up is really on the outlook for pricing. I guess maybe one for Peter. I mean, Peter, obviously, you've seen snacking prices are coming down big time in the U.S. from some of the U.S. food peers. Your commodity costs are coming down, particularly cocoa and you've got a depremiumization strategy as you go after mass and value. So there's lots of sort of factors that would seem to suggest that pricing should be kind of going down, strategy plus commodity. Is there a scenario where you think pricing in aggregate for Magnum could be negative in 2026? And so, yes, if you can maybe sort of address that pricing piece and how to think about the price volume equation within the organic sales growth guide of 3% to 5%?

Yes, good questions. I will start with the pricing question, make a couple of remarks on India, and then we'll let Abhijit explain the perimeter. This year, our raw material costs went up with 380 bps. And we decided not to fully price them and reinvest our 230 bps structural productivity savings to stay competitive, and it worked because this year, we grew volume and we grew value.

And particularly when you look at the U.S., where we grew volume with 1.8%, actually in value 1.7%. So we hardly priced in the U.S. and did that very deliberately. In the U.S., we have less chocolate in our portfolio. And I expect that our pricing will stay stable and that we will have mainly mix and volume-led growth. But in general, I feel actually really good about our American pricing and the tough choices and painful choices that we made this year.

In Europe, we price Magnum, but not in full. We are partly covered. So I expect in the Chocolate segment actually stable prices and overall, an environment of more volume than value-led growth. In emerging markets, I still see a combination of good pricing and on top of the underlying volume growth that we always see. So I think our pricing environment will be relatively stable because we never made the enormous increases that some of other people in the industry did.

Before I hand over to Abhijit, a little bit on China. As you know, I worked in China in the '90s. And when I look at the Indian market, it is actually like China in the early '90s or Turkey in the last '80s, very low per capita consumption. But with a booming economy, you see consumption going up rapidly in the cities and increasingly also in secondary and tertiary cities. It is the biggest growth opportunity in the industry.

At this moment in time, India is already the largest dairy market in the world. It would not surprise me that in 20 years' time, India is the largest ice cream market in the world, surpassing the U.S. We are lucky that we have a very good position in the -- in India from which to build, but it was not a very successful business over the last 20 years. Basically, it lost a lot of share. The profitability was flat. This year -- last year, it was in decline. So we're in a turnaround mode. But we are extremely lucky to have this business in our portfolio because we can use it as a base to build up a leading business.

Abhijit, over to you on perimeter.

Thanks, Peter. Let me explain the guidance a little bit. So what we have said is for the existing perimeter, right? So that is for the Magnum Ice Cream Company before the acquisition of India and Portugal, we expect profit to go up in the 40 to 60 basis points range. Now as you mentioned, the Indian business is around the EUR 200 million turnover. But because we are making investments there, it will come with a loss-making P&L. And that causes the headwind on one side.

And then because the India business was not part of the perimeter, it was paying the Magnum Ice Cream Company a certain amount of royalty because they were using our brands. Once it becomes part of our perimeter, that royalty will stop as well. And that's why we said that, that will cause a headwind in total, both because of the negative profitability of India and the stopping of royalties will have an impact such that the reported numbers that you see in 2026 in a perimeter that is including India and Portugal, will be in the 0 to 20 basis points. Does that clarify on the EBIT, then I take your question on the TSA phasing and commodities, Warren? Because...

Yes. And sorry, just on the final piece on the technicals and the noncash cash depreciation, is that still 20 bps headwind in '26 as well, just on the...

Yes.

So it's 80 bps of technicals, 40 bps India, 20 bps royalty, 20 bps depreciation?

Exactly. Exactly. And that is what I had explained in the earlier call that we did together with the sell side.

Then on TSA phasing and commodities, so the way it works is, of course, we have started with TSAs from the 1st of July last year. It phases out over time because as we build up our own organization, we stop services from Unilever that is done in a proper schedule that we have agreed between the 2 companies. So as we go through 2026, our TSAs during the year will come down. And then in 2027, they will come down further, and then we will exit all TSAs by the end of 2027.

The phasing of commodity prices, we expect some benefit, but it will come in the second half of the year because, as you've also heard from many other companies, all the cocoa prices have now come down. A lot of us are hedged already at higher prices. And that's why we've said that the improvement in our performance would be more second half weighted.

We will take our next question. Your next question comes from the line of Celine Pannuti from JPMorgan.

So my first question is on trying to understand the TSA again for '25 because there was a 50 basis points extra that we did not expect? So can you -- because you had the TSA impact, if I look at your bridge, you had a 20 -- minus 20 basis point net negative on the SG&A when you -- and then you had a noncash. So if you could explain that because I think that was new news this morning?

And then putting all together on what you said for the top line -- sorry, the margin expectation, your FX, your tax guidance and your net income, how should we look at EPS for the year on a year-on-year basis? Are we expecting a decline? If you could help us framing that?

My second question is on the overall environment. Peter, I heard you saying that you think that pricing should remain positive. If I look at Europe, you -- it seems that the volume was still negative in the fourth quarter. I appreciate it's a small quarter. And then you mentioned as well that the U.S.A., it was a tougher market environment. So I -- yes, I'm a bit struggling about what you're saying on the market growth of 3% to 4% and yet it seems that the exit rate at least in developed markets has weakened into the fourth quarter? So if you could help on that?

So let me answer Q4 first and then give the difficult questions to Abhijit. The overall year we grew ahead of our expectations at 4.2% with 1.5% volume share growth everywhere, with especially a very good third quarter. I don't know whether everybody appreciates that. But in '24, we grew more than 9%, and we did 4% on top of Q3. So actually not Q2, but Q3 was the remarkable quarter for us.

Let me give some context on Q4. In our seasonal out-of-home channel-driven businesses, we use Q4 to optimize the system, take cabinets back, replace them, optimize distributors, and did this in a very disciplined way to have a really good start in 2026. In the Southern Hemisphere, we had a particular good performance in Indonesia and ANZ. China is like Europe. It has the same seasonality. But Indonesia and ANZ did a really good job. Philippines was a little bit soft because there were a lot of typhoons this year, unseasonal. And in Brazil, we had a slow start of the season. You see that also with the beer companies, and it only started in December in earnest, and Brazil was weak last year. So we were really happy with this December pickup.

In Europe, we shifted the promo strategy last year, and we did the promo pressure more towards Q2 and Q3 as it gives higher returns as the market is larger. And this has proven to be a really good strategy with solid volume and value growth in Europe. and 3.3% overall growth is not bad. And actually 1.2% growth in Europe was a really good year.

The U.S. started well early October, but then became soft end October, November and especially November with the government shutdown, slip of the tongue, and food stamp challenges. It only picked up in the last weeks of December when the momentum came back in the market.

So having said all of this, there was nothing structural in Q4 that makes me worried about '26 and the predictions that we have for the market. I hope this answers, Celine. And then I'll -- when that is okay, I will hand over to Abhijit. Are you okay? I assume yes.

So let me clarify on the margin expectation and the tax guidance. Maybe first, let me start with the extra depreciation. So what I said is on the SG&A bridge, we increased our SG&A in the second half of this year, right? There were 2 big factors there. One was the double run cost. So basically, we were building up our organization as we were trying to take over functions from Unilever, that just brings additional cost. And the second one is the temporary service agreements, which comes with a certain tax markup. So that -- those are the 2 factors that increased our overheads by 20 basis points.

The 50 basis points, which you said, was not expected, actually. That is what in the earlier call I had mentioned, that depreciation which was allocated to us from Unilever used to come before separation as a noncash cost. So therefore, in the EBITDA, that used to be a depreciation that was deducted. When you go on to a TSA, Unilever charges us that depreciation as a cash cost, and that's simply a technical impact why it impacts the EBITDA because what was earlier a noncash cost will become, or has become a cash cost for the period of the TSA.

Then regarding the EPS, given all the moving parts, we are not guiding because also the separation cost and all of that. But if you look at an adjusted EPS for the year, taking out FX, yes, we will see a little bit growth in earnings, as we have said, and that should help the EPS to be around flattish or a little bit up for the year on an adjusted basis.

All right. That includes the tax rates being higher and the net financial costs as well?

Yes, yes.

Next question?

The next question comes from Jeff Stent from BNP Paribas.

Two questions, if I may, both very simple. The first one, could you just clarify whether or not 2025 profits, i.e., EBIT, EBITDA, were actually in line with your expectation?

And the second one, just to clarify the last point, you said taking out FX, you expected that EPS would be flattish. What do you expect based on current FX, what the sort of adjusted earnings will do just as current FX stands?

Thanks, Jeff. On the first question, yes, because we knew the massive cost inflation that we had at the beginning of our years and our plans had built this in, and we more or less ended where we ended, helped because this -- the productivity plan came through in full. Otherwise, we would not have been able to price as we did and basically have slightly -- slightly positive EBIT.

On the second one on -- or on the third one, Abhijit, over to you.

Yes. So maybe also on the 2025 EBITDA. If you remember, for the first half, we were already minus 30 down. And at that time, we had also said that we don't expect an improvement, maybe a slight decline. So that's where you see that the minus 30 only became minus 50. And then the additional 50 basis points was simply the whole depreciation thing that I just explained.

The EPS, look, it's very difficult to predict FX rates. In the next week or so, we will publish what is our FX expectation for the year. Now that will change, of course, because if we could predict it accurately, then we would be in a different business. But I will give you that outlook next week. When we say around flattish EPS, it could be a bit up or a bit down depending on where we end the year, but that is kind of -- it's not that there is a big decline in adjusted EPS. And the FX impact, we will give you some idea next week.

We'll take our next question. Your next question comes from David Woo from Morgan Stanley.

Just 2 questions from my side. Firstly, on the margin. If we take a step back and we look at the 2 main components of your medium-term margin expansion ambitions, you've got the cost savings and you've got the reinvestment, right? By the end of 2025, it looks like you've hit about 50% of your cost savings targets on a cumulative basis. Just out of interest by comparison, how much of your reinvestment spend have you done by the end of '25? And then I'll follow up with the next one.

I will hand over to -- but let me say a little bit what is -- what we did this year. We basically want to run the business on long-term fundamentals for the long run and aim for volume and competitive growth. With the 380 bps inflation, which was truly unprecedented last year, mainly dairy and chocolate, we decided to invest our 230 bps productivity savings to keep pricing competitive. That was a choice. We discussed it internally a lot, shall we do more profit and have less volume growth and less share. But we took the decision to invest behind the competitiveness of the business and as discussed with all of you, get this volume engine going for the second year. That was the big thing that impacted profitability this year.

Over to you, Abhijit, to further build?

Yes. So on the reinvestment part, there were 2 parts, as you will recall, David. One was the step-up in CapEx. So that we have moved up. We are now -- I think last year, we ended around the 4.5%. We were coming from 3.5% to 4%. We ended at 4.5%. So that is going as per plan.

The second part we said was to -- actually, there were 3 parts. We said we will invest in our sales force by adding dedicated sales force. That has also been done. 1,000 people. And then the last thing we had said was we will step up A&P, but we had said we will do that in 2 ways. We said, first, we will make the 12.5% that we spend more efficient. And then if necessary, we will take that up. And you would have seen we have announced our new collaboration or partnership with Publicis which gives us, despite being a separate stand-alone company, quite some leverage and efficiency in the spend that we do. And once we have captured that and we feel the need to do more, we have enough room to do that in the coming years.

Okay. That's clear. So just to clarify, so on the sales force as a percentage of revenue, the cost for the sales force will come down a bit from 2025, given those double costs you spoke about?

Yes, the double cost is not for the sales force. So the sales force is -- the sales force, the double cost is more for the support functions. So for example, if you have -- I take a number, 50 people doing payables from Unilever, we have to build up an organization of 50 people. They have to learn the work from Unilever and then Unilever winds down their people. That's the double cost.

Okay. So your head count...

It's more back office related.

Yes.

Okay. So your head count on the sales force is at steady state by the end of 2025, right?

Yes.

Steady state. And when possible -- I will add. Our business is very demand creation driven. When we see that more demand support works to drive growth, we'll do it. When more salespeople would lead to more sales, we would invest. We're actually pretty -- we try to keep head offices and regional offices and back offices as lean as possible, central teams as lean as possible and push the resources to the front line where they drive turnover growth.

Okay. That makes sense. And then just briefly on my follow-up question. You mentioned taking out some cabinets in Q4. Can you quantify the impact of this on OSG in Q4? And then how should we think about the phasing on the 2% growth in cabinets...

It's basically what we do. There are certain markets where like a convenience store, a 7-Eleven, the cabinet will stay in the outlet and in the low season just sells not a lot. There are also markets where a lot of the other outlets, small stores, leisure, we pull back at the end of the season. We take them with stock, and we basically resticker them, put the stock in really cold warehouses and make everything ready to start the season again. Same for regional distributors. We optimize their stock levels, and we make sure that the whole system is ready to basically -- yes, we are like farmers, to put the cabinets on the ground again when the season starts in February, March and April. This is a yearly process. So there was nothing new last year.

But as you can imagine, we basically said this is one of these fundamental issues. You need to do this with very big discipline because you can postpone it and have a little bit of extra sales, but we said best practice is to manage the whole out-of-home network with a lot of discipline, both at distributor level as well as outlet level. So that is basically it.

I think in general, of the 3 million outlets, but I'm now making it up a little bit -- but I think somewhere between the 500,000 and 700,000 cabinets come back every season. And we have 2,000 distributors, and you can imagine, it's very important that you manage that with a lot of discipline, that you don't have a lot of stock at the end of the season because it would destroy your Q1. And you want the cash back. So this is a very -- this is operationally intense activity system where discipline is really important, and we applied a lot of discipline this year.

Your next question comes from Karel Zoete from Kepler Cheuvreux.

I want to start with a question on cash flow and working capital because I guess this year has been some negative outflows on the working capital side of about EUR 200 million. You already provided more insights in cash flows. But how should we think about working capital going forward? The guide is minus 4.5% of revenues. What are your expectations on cash flow in '26?

And then the other question is much more about Latin America. Historically, I think Brazil used to be a good business. What are you doing to get the Brazilian business back on track as well as what you're seeing in Mexico? What are some of the interventions you've made in that market?

Okay. Karel, this is a really good question. I'm just back from Brazil, and I went there the week before Carnaval. So it was strictly business. Our brilliant -- Brazil is a really interesting country because the Brazilian ice cream market is on fire. But our Kibon business, which used to be a star 10 years ago, had sort of deteriorated. And why -- what was the problem? A, the market has grown mainly more premium and more cheaper, more affordable, and we got stuck in the middle, and we actually over a 10-year period had lost a lot of share.

Now what did we do? We first last year, replaced the full management team and all managers in the business. So we put a new team in place. Then secondly, our factories ran on very high waste levels and bad operational efficiencies. And I'm very pleased that we are making now really good steps to improve that. And over the coming years, we'll need to evolve the portfolio in Brazil and become more affordable and more premium at the same time. And that will take a little bit more time. As I said, we luckily -- it was really a horrible year. It was a horrible year before, and this year was not very good. But in December, we actually made really good progress as we hit the new season with good growth. And actually, in the beginning of this year, I can't say anything about it. I just got here. But I was just there, and we are in much better shape.

Yes. Let me, Karel, take your question on the cash flow. The interim operating model creates a bit of difficulty because it's a very complicated process where on an average basis, we get -- we have a subsidy from Unilever and then they manage our receivables and payables as part of the interim operating model. So it's not really a cash outflow. It's a temporary cash outflow, which will unwind when we get off the TSAs.

So the way to understand it is a couple of things. One is, if you look at our working capital as a company in terms of number of days, between '25 and '24, there is no change. So we have actually managed it well. We have a little bit of increase in terms of number of days on receivable, and we had a 2-day improvement in inventory. The payables have remained the same. So if you look at the operational working capital, and therefore, if you look at the bridge on the operational or comparable cash flow, as I have presented, you will see that there is no impact on working capital because we have managed that roughly flat year-on-year.

So that is also the reason why in the Capital Markets Day, we didn't give a separate guidance on cash flow for '26 and '27 because it's just very difficult to do. So therefore, we've said from '28 and '29, we will -- the guidance we have given, or the outlook we've given for cash flow will remain. As we go through the year, we will probably give some clarity, but this year and next year, just because of the interim operating model, it's difficult to give a outlook on that.

But stock creditors, debtors is all fully in control, and we are as tight as we ever were.

Yes.

Your next question comes from Robert Jan Vos from ABN AMRO ODDO BHF.

I have one left in the meantime. Your guidance for adjusting items, it implies a cumulative roughly EUR 750 million to EUR 770 million in 2025 and 2026 combined. If I recall correctly, your guidance was EUR 800 million for the years 2025 to 2028. So I was wondering, are you ahead of schedule timing-wise? Or should we anticipate that the EUR 800 million cumulatively will be exceeded?

Yes. Thanks, Robert. Let me clarify. So when we -- if you look again at the Capital Markets Day, we guided to EUR 800 million of separation cost, including the IT stack. And then we said we would have 80 basis points, if I'm not wrong, on restructuring. And basically, this EUR 425 million to EUR 450 million that I'm guiding for next year is including both. So therefore, it doesn't -- it's not a big shift in timing. It's pretty much, give or take a few million is in line with what we had said.

Next question comes from Bingqing Zhu from Rothschild & Co Redburn.

I want to shift gears a little bit. I have a couple of questions about EMEA. So you had a solid growth there, but it seems like from the presentation, you've maintained or gained market share slightly in that region. Can you touch on the market share performance in EMEA and how the competitive landscape is evolving in some markets with some local -- strong local player? And tied to that, at the Capital Market Day, you highlight the cabinet penetration in markets like Philippines, China and Indonesia still lagged others. Can you give us an update on the progress you've made this year in order to prepare for the high season next year? And then I have a follow-up, please.

Thanks, Bingqing, for the question. Yes. As you know, Asia is not a homogeneous sort of territory. So I will need to go in a little bit of country detail. We won share in China. And I'm very proud of that because it follows a long trajectory of share growth. We gained share versus most of the players and menu and are a solid #2. new organization, new sales approach. We reset trade margins and had a really good innovation program.

In Indonesia, for many years, we were under share pressure because the Chinese Ice, which is related to menu, had moved into Indonesia. And with new management and a new strategy, we basically were able to grow share. And the leader of China -- of Southeast Asia is the boss of China. So we apply all our China knowledge to compete. We also gained share in Thailand after a long period of weakness and massive share gains in Pakistan. I can't comment on India, of course. In Turkey, we lost a little bit of share, but that is planned because we don't always want to compete in the value segment versus DOBs, but it's a sort of planned environment. Overall, we gained share in the region.

Now talking about cabinets. China is actually less of a cabinet business because it's more e-commerce, more convenience stores who run their own cabinets. In the Philippines, we increased distribution. In Pakistan, we massively increased distribution. And in Indonesia, a little bit because main part of the year was to get the distributors, their margin and the portfolio in good order. So that is approximately where we were with distribution and share gains in the region. I love the region. I live so long in Singapore and in China. But it is still an area of really good growth for us. But it is not hyper growth like Asia. It's very solid, high single-digit growth, but not hyper growth, but very, very good still.

That's really helpful. Then my follow-up question is still on EMEA. That is your highest margin region. I understand that's helped by the channel mix. But how much further room do you see to improve productivity in the margin, especially it seems like a lot of focus is on driving top line and with the Indian consolidation being margin dilutive and you mentioned you continue to invest in India being high growth. How should we think about kind of medium-term margin in the region?

There are -- the main opportunity to improve margin in our business is Europe and U.S. We have pretty solid businesses in Asia. But like everywhere else, we can still improve the supply chain by further automation of the factories, improving layouts, robotization. But our real focus in Asia and EMEA is growth, growth and growth. Margin is for Europe and the U.S.

Your next question comes from David Hayes from Jefferies.

So 2 for me or 2 areas for me, I guess. Just on the food voucher flag that you made in terms of the U.S., I wonder if you can quantify that at all for the fourth quarter? And then should we think about that as a sort of 3, 4-year dynamic that we take account of? Because, as I understand it, there's kind of a fading of these food vouchers over a longer period of time. And just in terms of the dynamics of it, is this certain states taking out ice cream products from what is eligible for the vouchers? Or is it just an indirect effect that you have got less spend generally in grocery channels, and that's kind of knocking on to their purchase of ice cream?

And then the second area is on the freezer rollout. I wondered if you can quantify to what the freezer number went from and to, from the beginning to the end of the year? And it looks like when you look at the quality of the Indian subsidiary slides that perhaps almost half of the extra freezers are going to be based in India. Is that right? Or is that an additional number of freezers that we should look at once it's consolidated?

And then just a point of clarification still on freezers. Just what you were saying before about the fourth quarter freezer review, it sounded like there's almost a sale and return dynamic in the fourth quarter, which you see in other seasonal businesses that if you don't sell sun cream in certain retailers, then you basically give the money back as a negative sales dynamic in the fourth quarter. Is that what goes on? Is that what you're saying happened a little bit and then that just varies year-by-year in terms of the season success?

Okay. Thank you. Yes, most of the stuff last year went totally in line what we had planned for and what we had worked to. This government shutdown, the main impact was not the delay of the listing, but was basically government employees not getting paid. and food stamps which basically fell out in November, which had an impact on our business, but it actually came back in -- at the end of December, as I already mentioned, and we got further momentum. Approximately 6% to 8% of our turnover in the U.S., it comes from food stamps. It's, by the way in every food category in the U.S. So this is an important channel for us, but it was temporary.

Then when you look at the freezers, yes, indeed, India will be a core investment areas. And we actually saw last year a couple of things. We were able to negotiate freezers better than we did in the past because we put a lot of focus on it. So we got more bang for our freezer buck and invested more money behind freezers. And a large part of our new freezers, as we optimize them, go to the areas with higher returns. And this is also logic. There are not that many new swimming pools in Germany, but there are many new outlets and regions in India, in Pakistan, still in Turkey, that we can develop. But as you know, in -- because you've seen it, in India, we have a sort of a cabinet for every 2,000 to 3,000 inhabitants, in Turkey for every 250. So as the market develops, this massive growth opportunity will take a large part of our cabinets.

On your last question, on these cabinets, actually, as I already said during one of the other questions, there are many geographies where we put cabinets in, in certain channels and pull them back. There's nothing new, but that is the sort of dynamic how we run these categories. And I think some -- indeed, sunscreen businesses do that as well. You put your whole rack with all your sunscreens in. And at the end of the season, you take it out and then you bring it back again in the season. You have to see it like that. But it's not all of our freezers, but it is a part of our freezers. And you want to do that because you want to start the year with a bang again.

Your next question from Antoine Prevot from Bank of America.

One quick question for me. So on pricing for Europe in '26, please? I think you said you expect a broadly flat price environment. But I mean, with COGS deflation in 2H that you pointed out, I mean, what makes you confident you will not need some price rollback or reinvestments to remain competitive as you target volume growth there? And ultimately, Europe remains quite a competitive market on price?

Yes. As I said before, this is a business where we believe in volume-led competitive growth, and we have priced accordingly. At this moment in time, we feel that we are well placed in the European context, also analyzing the covers everybody has in the industry. And we do believe that we will still get a little bit of mix growth in Europe, as consumers everywhere. I didn't get the GLP question yet, but as the consumers everywhere going to more handheld units, more portion control, more premium products, so you get mix. But yes, we are price competitive, and we do expect because the European market is actually quite a healthy market, that there will also still be volume growth in the market. So a little bit of price, a little bit of mix and continued volume growth.

Your next question is from Maxime Stranart from ING Bank. [Operator Instructions]

The next question is from Jeremy Lindsay Kincaid from Van Lanschot Kempen.

I have one remaining one. Obviously, you closed the deal with Indonesia and transferred that business into your business clearly. However, I don't see any entry on the cash flow statement there for an acquisition. Can you help me understand the dynamics, please?

No. This was just part of the overall demerger dividend that -- it does not go out from the cash flow. It was just a delayed transfer which happened for technical reasons 1 day after we became a listed company. So you will not also see in our cash flow the price or whatever we have paid for all the other markets. So you should look at Indonesia as just any other market, just that the technical date of transfer was 1 day after we listed.

Yes. It is different than India and Portugal.

Your final question comes from the line of Guillaume Delmas from UBS.

Main question is on market growth because you anticipate another year of 3% to 4%. But would it be fair to assume that category growth this year should be more driven by volume mix rather than pricing given what's happening on the commodity cost front? And therefore, by extension, does it mean that for Magnum to comfortably reach the 3% to 5% organic sales growth in 2026, your volume growth would have to further improve compared to the 1.5% you've just achieved in 2025?

And then my second question, I mean, just a quick point of clarification. Commodity cost-wise, so you've signaled that we should have a contrasted picture between the first and the second half of '26. Just wondering if for the year as a whole, you anticipate commodities to be a headwind or a tailwind?

On the growth, as a global business, we believe that the American market will have low volume, still good mix as the glips drive also the underlying premiumization trend further, a little bit of price. Europe will be still volume based on the historic trends and mix. And Asia and the rest of the world will be a combination of price and volume. And actually, we expect that the overall global mix, although built up a little bit differently than 3 years ago, will still be into the 3% to 4% growth. What you also get is that certain really fast-growing markets like Brazil and like India become a larger part of the global pie.

So this 3% to 4% is pretty robust, and we feel good about our 3% to 5%. And why do we feel good about that? Because we have a good geographic mix. Our portfolio is more premium. And most of the accelerated growth is in premium segment of the market, handheld, portion control, premium. And, yes, so in this way, we believe that, again, it will be 3 to 5 years. And, yes, that is the year -- And yes, our volume growth of 1.5%, it will be 1.5%, 2% this year. And we will think with a little bit of mix and pricing, we'll end up between the 3% and 5% again.

On commodities, maybe good to clarify that 2025 was just a very specific year where we had close to 9% inflation on commodities. We expect that to be significantly lower, maybe in the low single-digit range this year. So there will be a little bit of a headwind, but not anything near as much as we saw last year.

This concludes today's question-and-answer session. I'll now hand the call back to Peter ter Kulve for closing remarks.

Thank you, Heidi. Thank you, Michele. Let me leave you with 3 messages. One, the ice cream market is healthy and resilient. It's partly the lipstick effect, but also increasingly GLP-1s that will help to premiumize the category -- further premiumize the category. Two, over the last 2 years, we took EUR 8 billion turnover out of Unilever and created a company with a hungry team, solid fundamentals and good governance. Performance was in line with plan and strengthening. Market shares are really good. We have positive volumes everywhere and have a good grip on profitability, as shown this year how we effectively dealt with this 380 bps cost spike. But in our thinking, it's still very much day 1, and I will keep it that way.

Thank you very much for being here today, and look forward to catching up with many of you over the coming weeks and months. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.