Kwalty beat

Research evidence excerpt

Kwalty beat

rent base of

approximately 250,000 and a potential long-term ambition of ~1 million. The business

remains loss-making while MICC invests in distribution and new factories, but the early growth

response is encouraging. This matters strategically given Magnum's view that it is only a

matter of time before India becomes the world’s largest ice cream market.

European growth was high quality and strongly volume-led

Europe & ANZ delivered 4.2% OSG in Q2, comprising 5.0% volume growth and -0.8% pricing.

For H1, the region delivered 4.1% OSG and 4.8% volume growth, with France growing DD and

the UK MSD. Adjusted EBIT margin expanded 100bps to 14.6% despite a 50bp royalty headwind

from India.

Channel momentum is broadening beyond traditional retail

At-Home and Away-from-Home both grew MSD, while digital commerce maintained DD

growth. Away-from-Home benefited from cabinet expansion across India, Pakistan, China and

Mexico, while At-Home growth was supported by better availability, more frequent sales-force

visits and stronger merchandising. The breadth across channels reinforces the view that the

improvement is operational rather than dependent on a single geography or format.

Question marks

H2 still needs to deliver most of the reported margin improvement

Adjusted EBITDA margin declined 30bp in H1, so a meaningful H2 uplift is required to achieve

the FY guidance of 0-20bp expansion. The good news is that some raw materials should ease in

H2 (cocoa and chocolate), productivity savings should continue to come through and some TSA

effects incurred in H1 are expected to reverse. However, the call provided limited quantification

of the H2 bridge and only pointed towards a “modest profitability step-up”. The scale of the TSA