The Magnum Ice Cream Company N.V.

Good morning and welcome to 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. At this time, all participants are in a listen-only mode. After the presentation, we will move into the Q&A session. Instructions for the Q&A session will be provided at that time and we will take your questions one by one. With that, I'm pleased to turn the call over to Michelle Nege. Michelle, please go ahead.

Good morning, everyone. Welcome to the Mecklenburg Ice Cream Company's Q1 Trading Update webcast. My name is Michelle Nege, Head of Investor Relations, and I'm here today with our CEO, Peter Tarkova, and our CFO, Abhijit Bhattacharya. The press release and investor presentation were published on our Investor Relations website this morning. The replay and full transcripts 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 this 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 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%. India and Portugal were not in the perimeter and paid royalties for the use of the TMICC brands. It 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 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 headwinds of 5.5% in the quarter. I am 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 UK 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 US, our biggest market, delivered organic sales growth of 3.2%, with a positive volume growth of 1.8%, led by Yasso and Popsicle. which both delivered double-digit organic sales growth in the quarter. Ben & Jerry 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 continued to execute our turnaround plan, focused on new innovations, more targeted promotional and pricing activities, and increased distribution. In AMEA, 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 blue mint magnum stick, and new Cornetto flavors, such as sorbet amalfi lemon with light cheese. Doesn't it 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 H126, 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, our mitigating actions, 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 costs, 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 three to 5% 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 zero and 20 bps, primarily due to the impact of 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 COCO 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 and Peach across the EU and Turkey. We also continued the rollout of the Bumble format across Europe and the Cone. These are fantastic examples of what we mean by taking a premium brand into new formats to unlock occasions. Ben and 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 US and Europe. The new Ben and Jerry's sandwich and bar formats have been well received, and we expect momentum to build. And in the US, Ben and Jerry innovations are ranking in the top 10 SKUs, with four of the top 10 super premiums. 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 Ha brand delivered high single-digit growth, driven by Twisted Freeze, the Minecraft Stick, Volcanics, the five-layer chocolate ice cream stick, and Celerobulbons, rolling out across multiple European markets. Alongside the strong performance of grape ice balls in Southeast Asia. I also want to call out Yasso Pines specifically. Yasso is another great example of what we mean by format innovation that expands the category. moving from sticks to pints, unlocking new consumption locations and new shelf space. It's the kind of thinking we are applying systematically across the portfolio. For those of you based in the US, do look out for them. They're delicious. Before we go to Q&A, let me close with a few thoughts 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 three channels, growing distribution points, and deploying more freezers 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 and 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 growth through innovation and availability, delivering our productivity program, and reinvesting behind our brands. With that, let me head back to Michel to take your questions. Thank you.