2D·

Going public tomorrow

Tomorrow is finally the IPO and as a long-term investor $ULVR (-0.6%) investor am curious to see how it develops. I am very excited about the development of TMICC, I have almost every brand in the freezer.

Nuqqx

@Nuqqx

4Wk·

Spin Off Unilever -> Magnum Ice Cream Company. What are your thoughts?

$ULVR (-0.6%) has announced that it will spin off its global ice cream division, including brands such as Magnum, Ben & Jerry's, Langnese and Cornetto, into an independent company called The Magnum Ice Cream Company (TMICC).

The reasons for this:

Unilever sees the ice cream business as having a strong seasonal component, high capital commitment and complex supply chains - these are very different from its core beauty, personal care and food businesses.
The spin-off is intended to release value: TMICC should grow independently, with a targeted focus on brands, realize economies of scale and offer investors a pure "ice cream playground".

Key data of the spin-off

TMICC will be headquartered in the Netherlands and plans to be listed on the stock exchanges in Amsterdam, London and New York.
Unilever will retain a minority stake of less than 20% after the spin-off and will reduce this over time.
Employment conditions for around 6,000 Eiskrem employees in Europe/UK have been secured in advance for at least three years to ensure stability during the transition phase.

Opportunities & risks

Opportunities:

TMICC can fully specialize in ice cream, allowing it to operate more flexibly and potentially achieve higher margins.
Investors gain a clearer investment vehicle for the global ice cream market - potential for valuation premium.

Risks:

Seasonal and weather-dependent business, cold transportation chains, competitive pressure and fluctuations in raw material and energy prices remain challenges.
At the same time, brands such as Ben & Jerry's are struggling with strategic tensions: e.g. conflicts over the social mission vis-à-vis TMICC/Unilever.

Question for the forum:

What do you think about the spin-off of Unilever's ice cream business into the Magnum Ice Cream Company? Do you think that TMICC really is really better positioned to increase growth and margins - or is there a risk that the spin-off will bring more risk than benefit?

Disclaimer:

I am invested and Unilever is a SWAN (sleep well at night) stock for me in my dividend portfolio, in fact one of my largest positions.

13 Comments

Michey777@Michey777

I think the ice cream business will stagnate in the long term, if not shrink. I already find the prices in the freezer section of discount stores far too expensive and the own brands are almost as good in terms of taste (just my opinion and referring to the competing product for BenJ, among others). Accordingly, the competition there is all the higher. When I remember that I used to get a Magnum every time I went to the gas station, I rarely reach for it today given the size + price. As I said... In my opinion, the price-performance ratio of the products has not been right for a long time and Unilever didn't split it off for nothing. They no longer see it as a growth area and that's why it finally had to go. So Unilever yes, ice cream definitely not.

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Nuqqx@Nuqqx

@Michey777 I fully agree with you, or rather I can understand your thinking, but I actually see it somewhat differently.
The spin-off is logical, Unilever has no desire for expensive cold chains, as we have seen with The Vegetarian Butcher, and the current CEO is only a fan of drugstores anyway, just like the activist investor N. Pelz - that's where you earn good money.

I think it's also a kind of liberating blow for long-neglected brands. Now you can focus on the TMICC brands in marketing and don't have to share a budget with Domestos, Axe & co - Unilever hasn't done much for the brands in recent years.

Q3 figures were not outstanding, but the summer was also simply subterranean in many regions and especially after good figures in the previous year!

For me, TMICC's brands are absolute childhood and also absolute drivers of innovation in the frozen food sector. I'm keeping an open mind and am looking forward to the development, I will definitely hold on to my shares. :)

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Michey777@Michey777

@Nuqqx then good luck :) I'll put it on my watchlist for the next few years, keep an eye on the progress and I might be proven wrong.
It's childhood for me too, which is why I'm all the sadder about how it turned out :)

In my opinion, product innovations are needed, marketing is no longer enough. When I read how much of Walmart's products are being replaced by private labels, for example, I wonder whether ice cream will remain an anchor product.

Good investment :)

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NichtRelevant@NichtRelevant

@Michey777 I agree with you to a certain extent. The ice cream is good, but I'm not sure how expandable and fast-growing Magnum will be as a company.
The biggest concern for me is the countless discount store own brands that are putting pressure on the established brands, and not just in ice cream. This not only affects Magnum, but also the major food manufacturers as a whole. Traditionally, I find $KHC, $NESN, $KO, $UL etc. exciting defensive investments. However, the question is whether an investment in large retail chains such as Costco, Walmart or Target is not better advised.

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BeachPlease@BeachPlease

@Michey777 When Magnum ice cream came onto the market - it was huge, Magnum, almost obscenely large - I thought as a child. Then there were these Magnum mini things...and then it was over. Similar to the Negro kisses, cocoa, vanilla (and coffee) have become really expensive.

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Gerald@Irlandfan

@BeachPlease When I was a child, the 300g Milka bar was still huge. Oh wait....

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Silas W.@DynasticGrind

I'm selling $ULVR and giving the Magnum papers to my nephew, who is their biggest fan, judging by last summer.

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S.A.U.@SAUgut777

Perhaps Unilver will then see some growth again 🤷🏻‍♂️

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Krush82@Krush82

What is the valuation?

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Ichbinak63@Ichbinak63

In the past, milk ice cream was 70% milk and few ingredients, today it's the opposite - less milk and cream + chemical kit. Corporations only sell fake ice cream

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Nuqqx@Nuqqx

@Ichbinak63 But I think the buyers are partly to blame. I mean, we all want the best items at the lowest prices...somewhere the manufacturers have to cut back. Just take a look at how often high-priced and high-quality items come onto the market and quickly disappear again because people are not prepared to pay the FAIR price for good food...

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KevinE@KevinE

@Nuqqx has changed dramatically anyway. There used to be vanilla, chocolate, strawberry and 2-3 nut varieties. Today it's pistachio-macadamia, cookie dough and Dubai chocolate-juniper.... And hardly anyone buys vanilla anymore.

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Schrauber1113@GordenShanway

23H

I only have 24 in my portfolio.
If I understand correctly, I have after split. 21 Unilever and 4TMICC ....

Or am I on the wrong track?

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