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Investing.com -- Unilever ’s (LON:ULVR) Magnum ice cream business has set out growth targets as it prepares to separate from its parent company later this year.
In a statement ahead of its capital markets day, Magnum projected midterm organic sales growth of 3% to 5% starting in fiscal year 2026.
The guidance is based on market growth of 3% to 4% and was noted by the company as not intended to be achieved every year.
RBC Capital Markets said the goal is higher than Visible Alpha consensus forecasts for Unilever’s ice cream division, which stand at 2.7% and 2.8% for fiscal years 2026 and 2027. The company also said that the business expects limited impact from seasonality.
Magnum set out additional financial targets that include average annual adjusted EBITDA margin improvements of 40 to 60 basis points beginning in 2026.
Free cash flow is projected in the range of €0.8 billion to €1 billion in 2028 and 2029, once capital expenditures normalize at 4% to 5% of revenue.
The company said it will maintain a stable dividend policy with a payout ratio of 40% to 60% of adjusted net income, with the first dividend expected in 2027 for fiscal 2026 results, the report said.
The demerger from Unilever is scheduled for mid-November 2025, when Magnum will begin trading as a separate listed company. Unilever will retain less than a 20% stake after the split.
RBC’s analysts described the company’s growth targets as “ambitious,” pointing to the gap between management’s guidance and consensus expectations for the segment’s performance.