Half Year 2026 Mayr-Melnhof Karton AG Earnings Call

August 20, 2026

Stephan Sweerts-Sporck: Welcome to this video conference call of the Mayr-Melnhof Group on our H1 results 2026. My name is Stephan Sweerts-Sporck. I am heading Investor Relations and Communications here at MM, and I will be the moderator in this call. Earlier this morning, we already published a press release, a half year report, and the CEO video statement, which is available from our corporate website, www.mm.group. Following our brief trading statement for Q1, we want to provide in this half year a more comprehensive update on our performance through this live presentation with our CEO, Peter Oswald, who is sitting next to me, and our CFO, Franz Hiesinger. Subsequent to the presentation, we will enter into a Q&A session. For this, I want to give you some technical information.

Speaker #1: Welcome to this video conference call of the Mayr-Melnhof Group on our first half-year results 2026. My name is Stephan Sweerts Falk. I'm heading Investor Relations and Communications here, and I will be the moderator in this call.

Speaker #1: Earlier this morning, we already published a press release, the half-year report, and the CEO video statement, which is available from our corporate website, mm.group.

Speaker #1: Following our brief statement, trading statement for the first quarter, we want to provide in this half-year with a more comprehensive update on our performance through a live through this live presentation with our CEO, Peter Oswald, who is sitting next to me, and our CFO, Franz Hiesinger.

Speaker #1: Subsequent to the presentation, we will enter into a Q&A session. For this, I want to give you some technical information: you may already queue for questions during the presentation by pressing the blue 'Live Q&A' button on your screen.

Stephan Sweerts-Sporck: You may already queue for questions during the presentation by pressing the blue Live Q&A button on your screen in the webcast and follow the instructions. Alternatively, if you cannot join through the browser, you have also a dial-in telephone number. Dial your country-specific number and enter the individual pin followed by the hash key. You can then register for asking a question by pressing zero followed by one on your telephone. I also want to inform you that this webcast will be recorded. I would now like to hand over to Peter to start the presentation.

Speaker #1: In the webcast and following the instructions. Alternatively, if you cannot join through the browser, you also have a dial-in telephone number. You dial your country-specific number and enter the individual PIN followed by the hash key.

Speaker #1: You can then register to ask a question by pressing 1-0, followed by 1-0, followed by 1 on your telephone. I also want to inform you that this webcast will be recorded.

Speaker #1: I would now like to hand over to Peter to start the presentation.

Speaker #2: Thank you, Stephan. Welcome, everyone, and thanks for your interest in our half-year results. We have basically four messages. Number one is that our results were mainly broadly in line with last year—slightly down, but broadly in line with last year—and significantly up compared to the second half-year.

Peter Oswald: Thank you, Stephan. Welcome everyone, and thanks for your interest in our half year results. We have basically four messages. Number one is that our results were mainly broadly in line with last year, slightly down, but broadly in line with last year, but significantly up compared to the H2. We will come to the individual items later, but the real positive surprise for us was the strong performance of Pharma, significantly up. Foods could again make a very strong result like we are always used to it, and in Board & Paper, the strong headwinds in terms of pricing led, despite a very successful FFF project, to a decline in our profitability. The second message is that Fit for Future is delivering far above our expectations, and it will deliver above expectations.

Speaker #2: And we will come to the individual items later, but the real positive surprise for us was the strong performance of Pharma, significantly up. Food could again make a very strong result, like we are always used to it, and imported paper—the strong headwinds in terms of pricing led, despite a very successful FFF project, to a decline in our profitability.

Speaker #2: The second message is that Fit for Future is delivering far above our expectations, and it will deliver above expectations. The third message is that our expansionary capex—and we will come to that in more detail—are on track, within budget, and will contribute to our earnings growth in 2027.

Peter Oswald: The third message is that our expansionary CapEx, we will come to that in more detail, are on track within budget and will contribute to our earnings growth in 2027. Last but not least, we said Monday morning, we announced that we have signed an agreement to acquire the Arnsberg mill from Reno De Medici, and we see substantial synergies here. Now, if we go to our Fit for Future project in greater detail, it strongly delivered in Q1 with EUR 105 million above our expectations. We expect for the H2, a year-on-year contribution of more than EUR 100 million, and in the next year, above EUR 60 million.

Speaker #2: And last but not least, as we said Monday morning, we announced that we have signed an agreement to acquire the Arnsberg mill from Reno de Medici, and we see substantial synergies here.

Speaker #2: Now, if we go to our Fit for Future project in greater detail, it strongly delivered in the first quarter with €105 million, above our expectations.

Speaker #2: We expect, for the second half of this year, a year-on-year contribution of more than €100 million, and in the next year, about €60 million.

Speaker #2: So all in all, we believe that by 2027, compared to the baseline in 2024, excluding TAN, there will be an earning enhancement of more than 330 million euro, which is well above the 250 million euro which we announced at the beginning of the year 2025 results announcement.

Peter Oswald: All in all, we believe that by 2027 compared to the baseline in 2024, excluding Tann, there will be an earning enhancement of more than EUR 330 million, which is well above the EUR 250 million which we announced at the beginning of the year with the full year 2025 results announcement. As already explained, it is a comprehensive program. The core of the program is operations, but procurement, top-line growth, SG&A, and supply chain also play a very important role. With this information, I hand over now to Franz Hiesinger, our CFO, who will explain our numbers.

Speaker #2: And as already explained, it's a comprehensive program. The core of the program is operations, but procurement, top-line growth, SG&A, and supply chain also play a very important role.

Speaker #2: And with this information, I hand over now to Franz Hiesinger, our CFO, who will explain to you our numbers.

Speaker #1: Thank you, Peter. I will briefly explain our financial key figures for the Group, and I'd like to use the like-for-like basis—that means basically excluding TAN, which we sold at the beginning of June 2025.

Franz Hiesinger: Thank you, Peter. I will briefly explain our financial key figures for MM Group on a like-to-like basis. That means basically excluding Tann, which we have sold at the beginning of June 2025. Our sales came in with EUR 1.85 billion, which is slightly down to the comparable prior year figures, but basically stable to the H2 of last year, mainly due to lower pricing. Our adjusted EBITDA came in with around EUR 200 million, which is quite up compared to the H2 of 2025, and shows, as Peter mentioned, a fairly strong performance. Our adjusted operating profit came in with close to EUR 90 million, also quite up compared to the H2 2025. Our EBITDA margin came in with 10.8%, which is quite an increase compared to both prior year and H2 2025.

Speaker #1: So our sales came in at €1.85 billion, which is slightly down compared to the prior year figure, but basically stable compared to the second half of last year, mainly due to lower pricing.

Speaker #1: Our EBITDA—sorry, our adjusted EBITDA—came in at around €200 million, which is quite up compared to the second half of 2025, and shows, as Peter mentioned, a fairly strong performance.

Speaker #1: Our adjusted operating profit came in at close to €90 million, also quite up compared to the second half-year 2025. And our EBITDA margin came in at 10.8%, which is quite an increase compared to both the prior year and the second half-year 2025.

Speaker #1: If we look at the operating cash flow, due to good working capital management, we achieved €145 million, and obviously, this is significantly better than the prior year.

Franz Hiesinger: If you look on the operating cash flow due to good working capital management, we achieved EUR 145 million and obviously significantly better than prior last year. Our capital expenditure with close to EUR 120 million, basically fairly stable to the prior periods, despite this includes already a lot of capital expenditure into our large Kwidzyn projects, which are well on track as Peter will explain later. If you look on our balance sheet, we are pretty happy to present a very stable position, very solid picture. Our equity ratio with 47% basically unchanged to year end. The net debt amounts to EUR 945 million, also way below EUR 1 billion, which brings us to a net debt adjusted EBITDA ratio of 2.4, which is quite well in our long-term range what we want to achieve between 2 to 2.5.

Speaker #1: And our capital expenditure was close to €112 million, basically fairly stable to the prior period. This already includes a lot of capital expenditure into our large-scale ROE projects, which are well on track, as Peter will explain later.

Speaker #1: So if you look at our balance sheet, we are pleased to present a very stable position and a very solid picture. Our equity ratio, at 47%, is basically unchanged from year-end.

Speaker #1: The net debt amounts to €945 million, also well below €1 billion, which brings us to a net debt adjusted EBITDA ratio of 2.4. This is well within our long-term target range, which we want to achieve, between 2 and 2.5.

Speaker #1: And finally, our free cash flow positively came in at €37 million, which also is a quite positive achievement for the first half year 2026. With this, I hand back to Peter.

Franz Hiesinger: Finally, our free cash flow positively came in with EUR 37 million, which also is a quite a positive achievement for the H1 2026. With this, I hand back to Peter, who will go more into details of the future.

Speaker #1: We will go into more detail on the divisions.

Speaker #2: Yeah, thank you, Franz. So let's go now into the operations of our three divisions, and let's start with our Food & Premium. Our Packaging division, I could almost say as always, delivered a strong performance.

Peter Oswald: Yeah. Thank you, Franz. Let us go now into the operations of our three divisions, and let us start with our Board and Premium Packaging division. I could almost say, as always, a strong performance. Profitability was slightly up compared to a year ago. The main, we are very proud that we could also increase our adjusted EBITDA margin by 90 basis points. They also enjoyed, because of the initiatives, a strong contribution from our FFF project by about EUR 27 million. Looking into the future, it was very important that we could sign with a number of customers multi-year contracts, some of them developing new products together. This is exactly where we are focusing on.

Speaker #2: Profitability was slightly up compared to a year ago. So the main thing—we're very proud that we could also increase our adjusted EBITDA margin by 90 basis points.

Speaker #2: And they also enjoyed, because of the initiatives, a strong contribution from our FFF project of about €27 million. Looking into the future, it was very important that we could sign, with a number of customers, multi-year contracts.

Speaker #2: Some of them are developing new products together. This is exactly where we are focusing. We don’t want to compete in all the tenders that are going on for the more commoditized business, but we want to be a development partner and work many years together with customers to improve their packaging footprint.

Peter Oswald: We do not want to compete in all the tenders which are going on for the more commoditized business, but we want to be a partner of development and work many years together with customers to improve their packaging footprint. If you are a bit surprised why top line did not develop, first of all, it is not fully comparable because we have divested the plants in Baiersbronn and Leobersdorf, which are all adjusted. Well, they are adjusted for the big ton acquisition or the big ton divestment, sorry. It is not 100% comparable. Now, going to our pharma business, we saw a very strong development. The EBITDA margin improved by almost 200 basis points, so a very nice progress. If you think back, we came here from 6%, 7% EBITDA margin a number of years ago. Now we are on our way to 18%.

Speaker #2: If you are a bit surprised, the top line did not develop as expected. First of all, it's not fully comparable because we have divested the plant in Bangor and Leeuwarden.

Speaker #2: Which are not adjusted, were only adjusted for the big TAN acquisition or the big TAN, and so it's not 100% comparable. Now, going to our pharma business, we saw a very strong development.

Speaker #2: The EBITDA margin improved by almost 200 basis points, so that's very nice progress. If you think back, we came here from a 6% to 7% EBITDA margin a number of years ago, and now we are on our way to 18%.

Speaker #2: Now we have reached 14%—we have surpassed 14%—so we are on a positive trajectory. Also, here we succeeded in signing a number of multi-year contracts with our main customers, developing products together, and developing packaging solutions together.

Peter Oswald: Now we have reached 14%, we have surpassed 14%, so we are on a positive trajectory. Also here, we succeeded in signing a number of multi-year contracts with our main customers, developing products together, developing packaging solutions together. We can already go to the next page. Innovation is a very important part of our product offering, and here are just some examples where we have transformed in the first quarter from plastic packaging to, here for examples, to paper packaging, in this way, so to say, avoiding more plastics. We are not just a producer of folding carton, but we are a small producer of molded pulp solutions, and also here we could sign some interesting long-term contracts. The topic in pharma, the big topic is, counterfeit. That is really something which is very important topic for all of us.

Speaker #2: And so we can already go to the next page. Innovation is a very important part of our product offering, and here are just some examples where we have transformed in the first quarter from plastic packaging to, for example, paper packaging.

Speaker #2: In this way, so to say, we are avoiding more plastics. We also use—we are not just a producer of folding cartons, but still a small producer of molded pulp solutions, and also here we could sign some interesting long-term contracts.

Speaker #2: The topic in pharma, the big topic, is counterfeiting. That's really something which is a very, very, very important topic for all of us. Also, as consumers, if we buy a medicine, we want to be sure that it's the original medicine and not just a fake product.

Peter Oswald: Also, as consumers, that if we buy a medicine, we are sure that it is the original medicine and not just a fake product. We are very proud about our highly effective micro-optics technology, which gives us a good competitive advantage. Now, moving on to our Board & Paper division. There, we were faced with lower prices, and the price deviation was about EUR 70 million. Thanks to our FFF project, where we could achieve by EUR 59 million profit improvement, we could almost balance this, but not completely. In terms of variable costs, it was a rather favorable environment. H1 compared to the H1 of last year, our costs for paper and recycling were somewhat lower, pulp was a bit lower. Boot costs were broadly flat. Energy costs were a bit lower despite the already starting Iran war.

Speaker #2: And we're very proud of our highly effective micro optics technology, which gives us a good competitive advantage. Now, moving on to our Board and Paper division.

Speaker #2: There we were faced with extremely low prices, and the price deviation was about €70 million. Thanks to our FFF project, where we could achieve a €59 million profit improvement, we could almost balance this, but not completely.

Speaker #2: In terms of variable costs, it was a rather favorable environment. The first half of the year, compared to the first half of last year, our costs for paper and recycling were somewhat lower.

Speaker #2: Pulp was a bit lower, wood costs were broadly flat. Energy costs were a bit lower, despite the already starting year-round war. The situation has now changed, and I will come to this point then in the outlook.

Peter Oswald: The situation has now changed, and now we come to this point in the outlook. Our fixed costs are down even though we produced somewhat more. Talking a bit about the top line, the outstanding thing, which I already mentioned, was that prices were significantly lower compared to the H1 of last year because they have been sliding for most grades throughout the year and there was a trough again at the beginning of this year. The good news, however, is that we see a positive price momentum in some grades, not in all grades. We hope that this gathers momentum in the H2 of the year. In terms of volumes, we were very pleased, because we could gain market share in Europe both for WLC, so for our recycled cartonboard as well as for our fresh fiber folding boxboard. That is important.

Speaker #2: Our fixed costs are down, even though we produced somewhat more. Now, talking a bit about the top line, the outstanding thing—which I already mentioned—was that prices were significantly lower.

Speaker #2: Compared to the first half of last year, they've been sliding for most grades throughout the year, and there was a drop again at the beginning of this year.

Speaker #2: The good news, however, is that we see a positive price momentum in some grades—not in all grades. And we hope that this guards us momentum in the second half of the year.

Speaker #2: In terms of volumes, we were very pleased because we could gain market share in Europe, both for WAC—so, for our recycled carton boards—as well as for our fresh folding box boards.

Speaker #2: That is important. We've seen that overseas markets have become less and less attractive, also because of the tariffs in North America. So, it is important to sell, so to say, around our own chimney.

Peter Oswald: We have seen that the overseas markets become less and less attractive, also because of the tariffs in North America, and so it is important to sell, so to say, around your chimney. One reason of that is obviously that we have very good products and we have improved these products. Another reason is our good service. By good service, we do not mean that we have more friendly sales representatives than other companies do, but we are located, especially in FBB, on the continent in Europe. Serving out of Friesach and of Polička, we are much closer to our customers. We can react much quicker, and this is something which is highly appreciated. Now let us make also a deep dive beyond these H1 results into our overall competitiveness for the paper, because given the disappointing results, this is obviously important.

Speaker #2: And one reason for that is obviously that we have very good products, and we have improved these products. Another reason is our good service. And by good service, we don't mean that we have, frankly, more sales representatives than other companies do, but that we are located especially in FPP on the continent, in Europe.

Speaker #2: So, serving out of Greece and out of Collegiamo, we are much closer to our customers, we can react much quicker, and this is something which is highly appreciated.

Speaker #2: Now, let's also take a deep dive beyond these half-year results into our overall competitiveness in import and paper, because given the disappointing results, this is obviously important.

Peter Oswald: These results, by the way, are very much in line with other competitors in our industry. First of all, it is reported where we sit on the cost curve, and the good news is that 80% of our capacity is in quartiles 1 and 2, so above average. I think that is a very important message. Then we have some more detailed charts which show what is the age of our machines compared to the competition. It is on the right-hand side, that it is newer than the average of the industry. If it is on the left-hand side, it is older. On the y-axis, you can see the capacity. Here you see the first, the right upper chart is on FBB, and here you can see that we have more modern machines with a lower technical age, which is obviously very good news.

Speaker #2: These results, by the way, are very much in line with other competitors in our industry. So, first of all, it's important we have to visit the cost curve.

Speaker #2: And the good news is that 80% of our capacity is in quartile one and two, so above average. I think that's a very, very important message.

Speaker #2: Then we have some more detailed charts which show what is the age of our machines compared to the competition. So it is on the right-hand side, and it's newer than the average of the industry.

Speaker #2: It's on the left-hand side, it's older, and on the y-axis you can see the capacity. Here you see—the first, the right upper chart is on FPP—and here you can see that we have much, so we've more modern machines with a lower technical age, which is obviously very good news.

Speaker #2: In terms of size, we are hovering around the average. I'm not worried about that at all, because a very big machine is only useful if you can produce very homogeneous products.

Peter Oswald: In terms of size, we are hovering around the average. I am not worried about that at all because a very big machine is only useful if you can produce very homogeneous product. If you have many different products, and even worse, if you do not just produce FBB, but WLC liner, all other sorts of products, then actually the big size of the machine is not of any advantage at all. On the lower chart, you can see that in the right upper section, which is newer machines and bigger machines, all three machines are MM machines. So Neuss from Leitzen Gernsbach. Količevo is also a relatively modern machine, but a bit smaller than the average. We could expand it, but do not do it in the current market environment.

Speaker #2: But if you have many different products, and even worse, if you do not just produce FPP, but CUK, liner, and all other sorts of products, then actually the big size of the machine is not of any advantage at all.

Speaker #2: On the lower chart, you can see that in the right upper section—which is newer machines and bigger machines—all three machines are machines.

Speaker #2: So, noise from Leiten and Ernstbach. Collegio is also a relatively modern machine, but a bit smaller than the average. We could expand it, but we don't do it in the current market environment.

Speaker #2: The only one which is in the left lower part is from light and PM2. But as this is part of a group with two machines of a size, with two machines, we're also saying it's very good.

Peter Oswald: The only one which is in the left lower part is Leitzen PM2, but as this is part of a group with two machines, of a site with two machines, we also think it is very good. In summary, we have a very strong cost position from the cost curve. Let us go now to the next slide. It is not just where you sit on the cost curve, which is important, it is also what is your capacity utilization. Having a great machine which is 70% utilized is not what delivers the results. Here, the good news is that we could steadily improve our capacity utilization, and we are now at an average of 87%, specifically for FBB. To create the equation, it is 80%.

Speaker #2: So in summary, we have a very strong cost position from the cost curve. But let's go now to the next slide. It's not just where you sit on the cost curve which is important.

Speaker #2: It's also about what your capacity utilization is. Having a great machine that is only 70% utilized does not deliver the results. And here, the good news is that we have been able to steadily improve our capacity utilization, and we're now at an average of 87%.

Speaker #2: Specifically for FPP, to preempt here any question, it's 80%. The third aspect which drives your profitability is: do you produce products for markets which reward your products, or do you have to dump them?

Peter Oswald: The third aspect which drives your profitability is, do you produce products for markets which reward your products, or do you have to bounce them all over the world? The very good news is that we could pass now for our holding half import in Europe. Both recycled and virgin team together, we can sell more than 90% in Europe. We have deliberately cut back on overseas markets, as the price competition against Chinese import tariffs in the US is just not very attractive. Last but not least, it is not just about machinery, it is not just about capacity utilization. It is at the end of the day, about people running it. In terms of operational excellence, with the CapEx, which we did in 2023, we were struggling a bit to adopt to this new machine set up.

Speaker #2: All over the world. And the very good news is that we could pass now for our folding carton boards in Europe, so both recycled and virgin team together.

Speaker #2: We can sell more than 90% in Europe. So, we've deliberately cut back on overseas markets, as the price competition against Chinese import tariffs in the US is just not very attractive.

Speaker #2: And last but not least, it's not just about machinery. It's not just about capacity utilization. It's, at the end of the day, about the people running it.

Speaker #2: And in terms of operational excellence, with the capex which we did in 2023, we were struggling a bit to adapt to this new machine setup.

Speaker #2: But now we have fully regained our leadership in operational excellence, and also Greece and Kotka have improved very much. So, in summary, we have a very strong market position.

Peter Oswald: Now we have fully regained our leadership in operational excellence and also Kwidzyn and Kotka have improved very much. In summary, we have a very strong market position. Yes, we have this extreme market share fight, especially in FBB, and we have to live with it for some time. Finally, we see that we are in a very strong position, and that gives us confidence for the future. This leads me to the outlook. There are negatives and positives for next year. First of all, not really a negative, but just to remind you about H2, we always do our annual maintenance stops in Kwidzyn and in Kotka mills. We do it in other mills as well, but there they are not so relevant. This has a negative effect of about EUR 35 million.

Speaker #2: Yes, we have this extreme market share, especially in FPP, and we have to live with it for some time. But finally, we see that we are in a very strong position, and that gives us confidence for the future.

Speaker #2: And this leads me to the outlook. So, there are negatives and positives for next year. First of all, not really a negative, but just to remind you, in the second half we always do our annual maintenance stops in Greece and in the Kotka mills.

Speaker #2: We do it in other mills as well, but there they are not so relevant. And that has a negative effect of about €35 million.

Speaker #2: The real bad news is that, due to the Iran war, we are faced with higher transport costs—up about 10%. Energy costs, chemicals—not directly related now to the Iran war—are slightly higher. Wood and paper for recycling costs are also up.

Peter Oswald: The real bad news is that due to the Iran war, we are faced with higher transport costs of about 10%. Energy costs, chemicals, and those directly related now to the Iran war, slightly higher wood and paper for recycling costs. There is, we see at the moment, still a subdued consumer demand. On the positive side, we have our pockets of growth in our pharma business, our GLP-1 products. We see a nice development in beauty, beverages, and pet food. As I already mentioned, we see a positive price trend in some board and paper grades. Last not least, Fit for Future will deliver again with a contribution of more than EUR 100 million. This is the specific outlook for H2 of this year. If we look more to 2027, I think there are a number of We are not commenting here on the market.

Speaker #2: At the moment, we still see subdued consumer demand. On the positive side, we have our pockets of growth—these are in our pharma business, our GLP-1 products; we see a nice development in beauty, beverages, and fast food.

Speaker #2: As I already mentioned, we see a positive price trend in some oil and paper grades. And, last but not least, Fit for Future will deliver again with a contribution of more than €100 million.

Speaker #2: So this is the specific outlook for the second half of this year. If we look more to '27, I think there are a number of— we're not commenting here on the market.

Peter Oswald: That is too far away to predict. What are the things which we can improve? First of all, as already mentioned, the acquisition of the Mayr-Melnhof Karton Aktiengesellschaft Amstetten mill has a lot of synergy potentials. Just to remind you, the deal is not closed yet. It is only signed. We are still waiting for the competition clearance. Secondly, very important, we have several CapEx in Kwidzyn amounting to about EUR 100 million. The benefits will flow through. They will start to flow through end of this year, but maybe then next year. It is three important investments. One is the new continuous digester, which will significantly reduce our energy and CO2 costs and also material usage. Secondly, we get the new winder, which will enable us to produce more packaging kraft paper.

Speaker #2: That's too far away to predict. But what are the things that we can improve? First of all, as already mentioned, the acquisition of the Raynaud-Demetrigis-Armsberg mill had a lot of synergy potentials.

Speaker #2: Just to remind you, the deal is not closed yet. It's only signed. We're still waiting for the competition clearance. Secondly, very important, we have several capex in Switzerland.

Speaker #2: Amounting to about 100 million. And the benefits will start to flow through at the end of this year, but mainly next year, and it's three important investments.

Speaker #2: One is the new continuous digester, which will significantly reduce our energy and CO2 costs, and also material usage. Secondly, we get the new winder, which will enable us to produce more packaging kraft paper.

Speaker #2: We could sell more here, but we can't deliver it because of this bottleneck in winding. And also, there's more unproduced wine paper in Greece.

Peter Oswald: We could sell here more, but we cannot deliver it because of this bottleneck in the winding, and also more uncoated fine paper in Greece. Thirdly, we have invested in a new sheeter, which will help us to service this express service much more, which we have installed for Poland. We will roll it out to Germany, where our customers can ask very short-term deliveries. We need this sheeting capacity in order to react on very short notice. This is very well received. It is a unique position which we have. Only those who are really close to the customer can offer this. Then we have a number of packaging expansionary CapEx in packaging. One is in Romania, a new machine. We have invested in several machines in the US, and that will positively contribute in 2027. Last not least, Fit for Future is not done.

Speaker #2: And thirdly, we've invested in a new sheeter which will help us to service this express service much more. We've installed it for Poland, so we'll roll it out to Germany, where our customers can ask for very short-term deliveries. But we need this sheeting capacity in order to react on very short notice.

Speaker #2: This is very well received; it's a unique position, which we have—only those who are really close to the customer can offer this. Then we have a number of expansionary capex projects in packaging.

Speaker #2: One is in Romania, a new machine. We've invested in several machines in the US, and that will positively contribute in '27. And last but not least, Fit for Future is not done.

Speaker #2: It will not just deliver for the next half-year; it will also deliver in the future, for 2027. And I'm fairly optimistic that we can upgrade the expectation again in the next half-year results announcement.

Peter Oswald: It will not just deliver for the next H1, it will also deliver then in the future for 2027. I am fairly optimistic that we can upgrade then the expectation again in the next H1 results announcement, so for the full year of 2026. Let us wait and see. So far, our expectation is above EUR 60 million. All in all, to wrap things up, we believe that in comparison to these market circumstances, we have delivered a good result. We are very well-placed for the future, but we have to endure the price situation, especially on the FBB side. Just now, for some time, as the market leaders are not willing to shut down their capacities, we have just to be patient until this happens. With this, I will hand back to Stephan, and we are looking forward to your questions.

Speaker #2: So, for the full year of '26—but let's wait and see. So far, our expectation is above €60 million. And so, all in all, to wrap things up, we believe that in comparison to these market circumstances, we have delivered a good result.

Speaker #2: We are very well placed for the future, but we have to endure the price situation, especially on the FPP side, just now for some time, as the market leaders are not willing to shut down their capacities. So we just have to be patient until this happens.

Speaker #2: So, with this, I would hand back to Stephan, and we are looking forward to your questions. Thank you.

Peter Oswald: Thank you.

Speaker #1: Thank you, Peter. Thank you, Franz. We'll now start our Q&A session. For your questions, please press the blue Q&A button in the webcast and follow the instructions.

Stephan Sweerts-Sporck: Thank you, Peter. Thank you, Franz. We will now start our Q&A session. For your questions, please press the blue Q&A button in the webcast and follow the instructions. You will receive a confirmation once you have entered the queue. If you wish to withdraw your question, please press Cancel. All those participants joining by telephone may register for a question by pressing 0 followed by 1 on their telephone keypad. By pressing 0 1 again, you can withdraw the question. You may ask your question once your name is announced and you are live. If you would like to ask a question, please press blue Q&A button or dial 0 followed by 1 on your telephone keypad now. First question, we got already one by Markus Remus from Oddo BHF. Markus, please. You are live.

Speaker #1: You will receive a confirmation once you have entered the queue. If you wish to withdraw your question, please press Cancel. All those participants joining by telephone may register for requests by pressing zero followed by one on their telephone keypad.

Speaker #1: By pressing zero, one again, you can withdraw the question. You may ask your question once your name is announced and you are live. If you would like to ask a question, please press the blue Q&A button or dial zero followed by one on your telephone keypad now.

Speaker #1: So, first question, we have one already from Marcus Ramis from Auto BHF. Marcus, please, you're live.

Markus Remus: Hi. Good morning, gentlemen. Thanks for the presentation and the details that you incrementally provided. I have a couple of questions and will take them one by one, if you do not mind. Firstly, regarding the savings targets. Congrats to the upgrade of your achievement, but can you help us understand a bit better how you calculate the number, specifically, talking about the top line effect, and then just thinking about procurement. Is that based on an if/if kind of calculation? Because procurement prices are volatile as well. Anything you can help us to understand this better is appreciated. Then also just to get it straight, are we talking about fixed costs exclusively? That would be the first one. Thank you.

Markus Remis: Hi. Good morning, gentlemen. Thanks for the presentation and the details that you incrementally provided. I have a couple of questions and will take them one by one, if you do not mind. Firstly, regarding the savings targets. Congrats to the upgrade of your achievement, but can you help us understand a bit better how you calculate the number, specifically, talking about the top line effect, and then just thinking about procurement. Is that based on an if/if kind of calculation? Because procurement prices are volatile as well. Anything you can help us to understand this better is appreciated. Then also just to get it straight, are we talking about fixed costs exclusively? That would be the first one. Thank you.

Speaker #3: Hi, good morning gentlemen. Thanks for the presentation and the details that you incrementally provided. I have a couple of questions, and we'll take them one by one.

Speaker #3: If you don't mind—so, firstly, regarding the savings targets: congratulations on the upgrades and on your achievement. But can you help us understand a bit better how you calculate the number? Specifically, I'm talking about the top-line effect, and then just thinking about procurement.

Speaker #3: Is that more of a “based on an as-if” kind of calculation? Because procurement prices are volatile as well. So, anything you can do to help us understand this better is appreciated.

Speaker #3: And then, also, just to get it straight, are we talking about fixed costs exclusively? So that would be the first one. Thank you.

Speaker #2: Yeah, yeah, thank you. And obviously, so I mean, we have valuation guidelines of about 30 pages, so I can't go through all of them.

Peter Oswald: Yeah. Thank you very much. All clear. We have valuation guidelines of about 30 pages, so I cannot go through all of them. We have, just to give you comfort, we were supported by a consultant in this exercise who was results-based. He was incentivized in a results-based situation. We had no intention also for our own purposes and for the fees we have to pay to inflate our numbers. Just going through briefly. First of all, it is only recognized, any saving or profit improvement is only recognized when it is at least 1 month in our books. In some cases, it is for obvious reasons, 3 or 6 months already in our book because of volatility. The biggest contribution comes from, as I said, from operations.

Speaker #2: We have just to give you comfort we were supported by a consultant in this exercise who was based very results based so it was incentivized in the results based situation.

Speaker #2: So, we have no intention, also for our own purposes and for the fees we have to pay, to inflate our numbers. But just going through briefly: first of all, saving or profit improvement is only recognized when it is at least one month in our books.

Speaker #2: In some cases, it's for obvious reasons—three or six months are already in our book because of volatility. The biggest contribution comes, as I said, from operations. In operations, it's typically things like reducing broke, shortening changeover time on machines, improving energy efficiency, and using the heat which goes into the air in a new way.

Peter Oswald: In operations, it is typically things like reducing broke, shortening change over time on machines, improving energy efficiency, using the heat which goes into the air in a new way. There must be clearly identified initiatives, and there must be a result. Typically in operations, we observe it for 3 or 6 months. If the reduction of energy, if the reduction of broke, if shortening of change over time, et cetera, has really happened for a number of months to say this is something sustainable. In procurement, we typically work against, it must be an improvement against an index. In some cases, it is easy to find these indices. Let us say if our prices go down by EUR 50 and the index goes down by EUR 50, then it is not a saving.

Speaker #2: And so, there must be clearly identified initiatives. Then there must be a result, and typically, in operations, we observe it for three or six months—if the reduction of energy, if the reduction of broke, if shortening of changeover time, etc.

Speaker #2: ...has really happened for a number of months to say this is something sustainable. In procurement, we typically work against—there must be an improvement against an index. In some cases, it's easy to find these indices. So, let's say if part prices go down by €50 and the index goes down by €50, then it's not a saving.

Speaker #2: If the index, the PIKS, goes down by €50 and we have agreed to a contract following the PIKS index but with a higher discount, which was previously X and now it's X plus 3%, then the 3% would be an additional saving.

Peter Oswald: If the PIX index goes down by EUR 50 and we have agreed a contract following the PIX index, but with a higher discount, which was previously X and now it is X plus 3%, then the 3% would be an additional saving. In sales, it is either price increases, which go again above a typical market. We did not have a lot of price increase initiatives. It was more on supplement prices. We ask if the order volume is small, if the run is very short, if it has to be delivered in a very short time, then we have typically agreed surcharges and sometimes our salespeople forget to implement them. We have not agreed on them, and here it was about to make sure that where we have higher costs, we also get being better paid.

Speaker #2: In sales, it must be—it's either price increases, which go again above a typical market. So it would be—we didn't have a lot of price increase initiatives.

Speaker #2: It was more on supplement prices. So we ask if the order volume is small if the run is very short if it has to be if it has to be delivered in a very short time then we have typically agreed surcharges and sometimes our sales people forget to implement them or have agreed on them and here it was about to make sure that where we have higher costs we also get being better paid.

Peter Oswald: Volume increases were also counted, but again, only, if the overall customer, the overall site, the overall section overall was growing. There were some successful initiatives getting new customers, but it is not counted because the division as such did not show, or the part of the division did not show the right growth. Then I left off SG&A. There it is pretty simple. It can be about personnel, can be about other costs, services from service providers. That in most cases is pretty easy to determine.

Speaker #2: Volume increases were also counted, but again, only if the overall customer, the overall site, or the overall section as a whole was growing. So, there were some successful initiatives getting new customers, but it's not counted because the division as such didn't show, or the part of the division didn't show, the right growth.

Speaker #2: So then I left off SG&A. There it is pretty simple. It can be about personnel, can be about other costs, services from service providers, and that's in most cases pretty easy to determine. So if you make a new contract, you get a 10% discount.

Markus Remus: Yep.

Markus Remis: Yep.

Peter Oswald: If you make a new contract, you get a 10% discount. To your question, is it fixed costs or variable costs? It is more variable costs actually as fixed costs because many savings like material savings in the production, et cetera, in operations are in more cases variable costs than fixed costs.

Speaker #2: To your question, is it fixed costs or variable costs? It is more variable costs, actually, than fixed costs, because many savings—like material savings in the production, etc.—are variable.

Speaker #2: In operations, costs are in more cases variable costs than fixed costs.

Speaker #3: Okay, okay, understood. Thank you very much. Can you maybe also give an indicative breakdown between the segments? I would assume that a large chunk is attributable to Board & Paper, but...

Markus Remus: Okay. Understood. Thank you very much. Can you maybe also give an indicative breakdown between the segments? I would assume that a large chunk is attributable to MM Board & Paper, but

Markus Remis: Okay. Understood. Thank you very much. Can you maybe also give an indicative breakdown between the segments? I would assume that a large chunk is attributable to MM Board & Paper, but

Speaker #2: Yeah, so we have this—sorry, I went over it. But in the presentation, you see per division, we said exactly which division saved how much.

Peter Oswald: Yeah. We have it. Sorry, I went over it, but in the presentation, you see per division, we say exactly which division saved how much. If I go back, we had the breakdown of, what was it now? 27 million in Food and Premium, 16 million in Pharma and Healthcare, and 59 million in Board and Paper. We have given this breakdown.

Speaker #2: So, if I go back, we had the breakdown of—what was it now? So, €27 million in Food & Premium, €16 million in Pharma & Healthcare, and €59 million in Board & Paper.

Speaker #2: So, we have given this breakdown. And if you calculate this and you sum it up, you will see a gap of €2 million, which is group costs.

Markus Remus: Okay.

Markus Remis: Okay.

Peter Oswald: If you calculate it and you sum it up, you will see a gap of 2 million, which is through the costs.

Speaker #3: Okay, thank you very much. Secondly, on your remarks regarding pricing in board and paper, I mean, we have been talking about the overcapacities in the industry, and I think in the full-year call you also said that you expect your competitors to adjust capacities.

Markus Remus: Okay. Thank you very much. Secondly, on your remarks regarding pricing in Board and Paper, we have been talking about the overcapacities in the industry. I think in the full year call, you also said that you expect your competitors to adjust capacities. You basically now repeated this statement. What makes you so sure that your competitors will do the first step? Coming to the, or staying with the capacity topic, maybe you can also explain a bit the rationale behind the acquisition of the Arnsberg plant, which is, as I understand, loss-making at the moment. You are adding capacity in a business which is ailing at the moment. How much investment into Arnsberg is needed, and how quickly can this turnaround be achieved? Thank you.

Markus Remis: Okay. Thank you very much. Secondly, on your remarks regarding pricing in Board and Paper, we have been talking about the overcapacities in the industry. I think in the full year call, you also said that you expect your competitors to adjust capacities. You basically now repeated this statement. What makes you so sure that your competitors will do the first step? Coming to the, or staying with the capacity topic, maybe you can also explain a bit the rationale behind the acquisition of the Arnsberg plant, which is, as I understand, loss-making at the moment. You are adding capacity in a business which is ailing at the moment. How much investment into Arnsberg is needed, and how quickly can this turnaround be achieved? Thank you.

Speaker #3: Basically now repeated this statement. What makes you so sure that your competitors will do the first step and coming to the or staying with the capacity topic maybe you can also explain a bit the rationale behind the acquisition of the Arnsberg plant which is as I understand loss making at the moment so you're adding capacity in a business which is ailing at the moment how much kind of investments into Arnsberg is needed and how quickly can this turn around be achieved?

Speaker #3: Thank you.

Speaker #2: Yeah. So first of all, it's not that nothing has happened; we just don't see it in the numbers yet. So, we've seen in FPP one market participant—I think that's what you use these days instead of "competitor"—going bankrupt. The question is now if production will be shut down or if there is someone who buys it.

Peter Oswald: Yeah. First of all, it is not that nothing has happened. We just do not see it in the numbers yet. We have seen in FBB one market participant, I think is what you use these days instead of competitor, are going bankrupt. The question is now if production will be shut down or if there is someone who buys it. There was an announcement. This was our former company, which we sold a number of years ago, EUR 150 million. This is now bankrupt. One part, Eerbeek, is in the Netherlands, is reported to have found a buyer. They have announced the startup on 15 August, which did not happen. It was postponed. We will see how this works out. I can just say in terms of volumes, we are already benefiting from this.

Speaker #2: There was an announcement, so this was our former company which we sold a number of years ago for €150 million. So, this is now bankrupt. One part there, back in the Netherlands, is reported to have found a buyer.

Speaker #2: They announced the startup on the 15th of August, which did not happen. It was postponed, so we will see how this works out. I can just say, in terms of volumes, we are already benefiting from this.

Speaker #2: So we will see how this works out, and we will see who the next company will be. And finally, yeah, I can't predict if one of the big players will just continue as is or finally take a decision, but as it is, we don't know when this will happen.

Peter Oswald: So we will see how this works out, and we will see who the next company will be. I cannot predict if one of the big players will just continue as is or finally take a decision. So we do not know when this will happen. On the recycling side, we have seen a change. Also the fact, it was now the former insolvency Shareholder lost all shares and the bondholders had to take a big cut. I think now that this competitor is owned by hedge funds, they will, I think, be more rational in terms of going forward. Exactly, we do not know. So why did we buy, in an oversupplied industry, another player? It is simply because we have, in Germany, the infrastructure, Arnsberg is fairly close to our mill in Neuss.

Speaker #2: On the recycled side, we've seen a change. So also, the factor—it was not a form of insolvency, but it was a sort of—the shareholder lost all shares and the bondholders had to take a big cut. And I think now that this competitor is owned by hedge funds, they will, I think, be more rational in terms of going forward, but exactly, we don't know it.

Speaker #2: So why did we buy another player in an oversupplied industry? It's simply because we have, in Germany, the infrastructure—Arnsberg is fairly close to our mill in Neuss—and therefore we see that, in terms of SG&A costs, you can do a lot. But also in production areas, like maintenance, for instance, you could install one maintenance center service in both mills.

Peter Oswald: Therefore we see that in terms of SG&A costs, you can do a lot. Also in production areas like maintenance, for instance, you could install one maintenance plant for servicing both mills. So we see a number of opportunities and therefore we think that at the end we can create value with this acquisition.

Speaker #2: So we see a number of opportunities, and therefore we think that, in the end, we can create value with this acquisition.

Speaker #3: And regarding the investment need, and the kind of prospective turnaround already next year?

Markus Remus: Regarding the investment needs and the prospective turnaround already next year?

Markus Remis: Regarding the investment needs and the prospective turnaround already next year?

Speaker #2: Yeah, we don't see any significant investment needs.

Peter Oswald: Well, we do not see any significant investment needs.

Speaker #3: Okay.

Markus Remus: Okay.

Markus Remis: Okay.

Peter Oswald: It is really about reducing costs, but also being more rational in terms of pricing, filling the machines better, specializing the machines together with our other machines. Because a lot of productivity comes at the end of the day that you have the mill where you can specialize on products and not make changeovers all the time. If you combine several assets, you have more opportunities to do that.

Speaker #2: It's really about reducing costs, but also being more rational in terms of pricing, filling the machines better, and specializing the machines together with our other machine. Because a lot of productivity comes at the end of the day when you have a mill where you can specialize on products and not make changeovers all the time. And, obviously, if you combine several assets, you have more opportunities to do that.

Markus Remus: Mm-hmm. Okay. Thank you. Then one question regarding further restructuring costs in the H2. Is there anything on the horizon? Also regarding the maintenance cost, EUR 35 million you mentioned for the Q3. I recall that last year this was more spread over Q3, Q4.

Markus Remis: Mm-hmm. Okay. Thank you. Then one question regarding further restructuring costs in the H2. Is there anything on the horizon? Also regarding the maintenance cost, EUR 35 million you mentioned for the Q3. I recall that last year this was more spread over Q3, Q4.

Speaker #3: Okay, thank you. Then one question regarding further restructuring costs in the second half: is there anything on the horizon? And also regarding the maintenance costs—€35 million you mentioned for the third quarter.

Speaker #3: I recall that last year this was more spread over Q3 and Q4. Is it this year pulled forward into Q3, or is there an additional impact then also in the final quarter?

Markus Remus: Is this year pulled forward into Q3 or is there an additional impact then also in the final quarter?

Markus Remis: Is this year pulled forward into Q3 or is there an additional impact then also in the final quarter?

Speaker #2: No, there's no additional job. So, the €35 million refers to the full second half-year, but as we've moved it forward—last year it was September/October, this year it is August/September.

Peter Oswald: No, there is no additional charge. So the EUR 35 million refers to the full H2. But as we have moved it forward, last year it was September, October, this year it is August, September. So by end of September, it is done. So the Q3 results will be more impacted and the Q4 will, compared to last year, not be impacted, whereas last year we had this cost. Restructuring, we cannot really predict here anything concrete, because it has to be discussed with unions, et cetera. But we can assume that we will work on our footprint. Without being specific about any mills or plants, we will do restructurings.

Speaker #2: And so by the end of September, it's done. So the third quarter result will be more impacted, and the fourth quarter will, compared to last year, not be impacted, whereas last year we had these costs.

Speaker #2: The restructurings—we cannot really predict anything concrete here because it has to be discussed with unions, etc. But you can assume that we will work on our footprint and, without being specific about any mills or plants, we will do restructurings.

Speaker #3: All right, thank you very much. I have a final question before I get back into the line for bookkeeping questions. Firstly, I would be interested in the factoring level at the end of the first half.

Markus Remus: All right. Thank you very much. A final question before I get back into the line to bookkeeping questions. Firstly, I would be interested in the factoring level at the end of the H1. Then you mentioned that in 2027, the CapEx figure, or at least my interpretation, will go down. The reference, the EUR 160 million normalized CapEx. Is that what you are seeing as maintenance level in the current state of the company? Is the decline to below EUR 200 million something we should expect for 2027?

Markus Remis: All right. Thank you very much. A final question before I get back into the line to bookkeeping questions. Firstly, I would be interested in the factoring level at the end of the H1. Then you mentioned that in 2027, the CapEx figure, or at least my interpretation, will go down. The reference, the EUR 160 million normalized CapEx. Is that what you are seeing as maintenance level in the current state of the company? Is the decline to below EUR 200 million something we should expect for 2027?

Speaker #3: And then you mentioned that in 2027 the CapEx figure—or at least my interpretation—will go down. You referenced the €160 million normalized CapEx.

Speaker #3: Is that what you're seeing as maintenance level in the current state of the company? And is the decline to below €200 million something we should expect for 2027?

Peter Oswald: No, that was. I first come to the CapEx. Maybe I was not precise enough. I meant end of 2027. We have long-term CapEx of EUR 180 to 200 million, including, this is not just maintenance CapEx. Maintenance CapEx is more like EUR 110, 120 million. But realistically, we want to stay competitive and there are growth opportunities in some areas of the business. Overall, we should think about EUR 180 to 200 million per annum.

Speaker #2: No, sorry. First, coming to the CapEx—maybe I was not precise enough. I meant end of 2027. So, we have long-term CapEx of €180 to €200 million, including—this is not just maintenance CapEx.

Speaker #2: Maintenance CapEx is more like €110–120 million. But realistically, we want to stay competitive, and there are growth opportunities in some areas of the business.

Speaker #2: So, overall, we should think about €180 to €200 million per annum. This year and next year are elevated mainly because CapEx is increasing, and that is not all paid this year.

Markus Remus: Yeah.

Markus Remis: Yeah.

Peter Oswald: Next year. This year and next year are elevated mainly because of the CapEx increasing. That is not all paid this year. Some of this will come next year. This year and next year are elevated. Without giving you a precise number for next year, we should wait for that. But it will be roughly where it is this year, maybe a bit down.

Speaker #2: Some of this will come next year, so this year and next year are elevated. And without giving you a precise number for next year, we should wait for that.

Speaker #2: But it will be roughly where it is this year, maybe a bit down.

Speaker #3: Okay.

Markus Remus: Okay.

Markus Remis: Okay.

Speaker #2: And if we have another year of elevated CapEx, because maybe of—

Peter Oswald: We have another year of elevated CapEx because mainly of increasing. Regarding factoring, the net factoring amount was below EUR 340 million. That is basically the same figure as we had in 2025.

Speaker #1: Regarding factoring, the figure is a net factoring amount that was below €340 million. And that is basically the same figure as year-end 2025.

Speaker #3: Okay, thank you. That's very helpful. Thank you, gentlemen.

Markus Remus: Okay. Thank you. That's very helpful. Thank you, gentlemen.

Markus Remis: Okay. Thank you. That's very helpful. Thank you, gentlemen.

Speaker #2: Thank you. Thank you, Marcus, for your question. The next question comes from Michael Maschalinger from Erste Group.

Stephan Sweerts-Sporck: Thank you. Thank you, Markus Remus, for your question. The next question comes from Michael Marschallinger from Erste Group.

Stephan Sweerts-Sporck: Thank you. Thank you, Markus, for your question. The next question comes from Michael Marschallinger from Erste Group.

Michael Marschallinger: Yes, hello. Good morning. Thanks for taking my questions. Firstly, I would touch on the pricing regards and then comments in the body paper you made. With this overcapacity still persisting, what supports the expectations of improving prices? Could you please quantify which price improvement are we expecting H2, which specific grades and which regions?

Speaker #3: Hello. Yes. Hello. Good morning. Thanks for taking my questions. Firstly I would touch on the pricing regards in comments in body paper. You made so with this overcapacity still persisting what supports the expectations of improving prices and could you please quantify which pricing improvement we expect in H2 which specific grades and which regions please?

Peter Oswald: Yeah. That's a very different question, obviously. We only know what has happened until today and not what will happen. We see some both. Let's say, we have to really separate out recycled cartonboard and virgin cartonboard. In recycled cartonboard, we have seen now with several closures which have taken place in Spain, in Holland, in Germany over the last years, end markets growing, that we are much closer to a balanced situation. Therefore, we've seen real price increases. We implement pricing increases in April to June and some now in July, and we see this trend to continue. Here we are, I wouldn't say we don't have a balanced market, but we are close to a balanced market.

Speaker #2: Yeah, that's a very secret question, obviously. Yeah, we only know what has happened until today and not what will happen. But we see somewhat—so, let's say we have to really separate out recycled carton board and virgin carton board.

Speaker #2: In recycled carton board, we have seen now several closures which have taken place in Spain, in Holland, and in Germany over the last years, and markets are growing.

Speaker #2: That we are much closer to a balanced situation. And therefore, we've seen gradual, we've seen real price increases. We implemented pricing increases in April through June and some now in July, and we see this trend continuing.

Speaker #2: So here we are. I wouldn't say we don't have a balanced market, but we are close to a balanced market, and there we have seen during this year an overall increase in prices, even if it's still somewhat lower than where it was last year.

Peter Oswald: And there, we have seen during this year, an overall increase in prices, even if it is still somewhat lower than where it was last year. Then we have the virgin grades, FBB, and here we see the two market leaders, the one market leader, so to say, trying to get market share in order to shift volume from the US to Europe, and the other one, who has built a new mill, obviously wants to build their mill. And here it is difficult to predict when they will act. The only positive news is that, positive is now an inappropriate word, but for us, positive thing is now that with the insolvency of pulp, we will for sure get some additional volume, but it will not solve the overall pricing issue. So for this part, I am not predicting anything.

Speaker #2: And obviously, yeah, so in the end we have the virgin grades FBB, and here we see the true market leaders. The ground market leader, so to say, is trying to get market share in order to shift volume from the US to Europe, and the other one was building a new mill.

Speaker #2: Obviously, they want to fill their mill. And here, it's difficult to predict when they will act. The only positive news—although 'positive' is now an inappropriate word, but for us the positive thing— is now that with the insolvency of Volt, we will for sure get some additional volume, but it will not solve the overall pricing issue.

Speaker #2: So for this part, I'm not predicting anything. We have to wait patiently until things will happen. For virgin, carton board called FBB. And then we have some other grades.

Peter Oswald: We have to wait patiently until things will happen for virgin cartonboard or FBB. Then with some other grades, so we have good price level in saturated kraft paper, with very weak prices in uncoated fine paper, but they are on the move up now currently, but difficult to see how it will go from here. Yeah, and that is more or less it.

Speaker #2: So, we have a good price level in separating craft paper. We have very weak prices in uncoated fine paper, but they are on the move up now, currently, although it is difficult to see how it will go from here.

Speaker #2: Yeah, and that's more or less it.

Speaker #3: All right. And just a follow-up: When would you expect the supply-demand balance to be reached in FBB with this mentioned insolvency?

Michael Marschallinger: And, just a follow-up. When would you expect the supply-demand balance to be reached in FBB with this mentioned insolvency?

Speaker #2: Now, on FBB, I'm not predicting it unless none of the two capacity leaders— I mean, all three of us have the same size in terms of what we sell into Europe.

Peter Oswald: Now, on FBB, I am not predicting it, unless if none of the two capacity leaders, we all three have the same size in terms of what we are selling to Europe, but the two others have much higher capacity, which is used to a certain extent for overseas sales and to a certain extent, it is simply empty. And it is very easy, as long as they do not shut capacity, there is no major improvement in prices, and I cannot predict it, and I think nobody can really predict it.

Speaker #2: But the two others have much higher capacity, which is used to a certain extent for overseas sales, and to a certain extent it's simply empty.

Speaker #2: And it's very easy, as long as they don't shut capacity, there is no major improvement in prices. And I can't predict it, and I think nobody can really predict it.

Michael Marschallinger: Understood. Thank you. Just one last question on cost inflation. Could you quantify the cost inflation you saw in the last H2 of the year across your major cost positions, energy, wood, recycled fiber, and what do you expect for the full year?

Speaker #3: Understood. Thank you. And just one last question on cost inflation: Could you quantify the cost inflation you saw in the last half of the year across your major cost positions on energy?

Speaker #3: Would recycled fiber—and what do you expect for the full year?

Speaker #2: Yeah, so let's start with something easier. Wood is marginally up; it's not so relevant. I mean, wood prices in Europe are generally on the move up in Scandinavia.

Peter Oswald: Yeah. Let's start with the more easy things. Wood is marginally up. It's not so relevant. Wood prices in Europe are generally on the move up. In Scandinavia, they're more on the way down. We benefited a bit in Kotkamills and we suffered a bit in pitches. Paper for recycling, the indices are gradually moving up. I just wanted to highlight they are somewhat higher than they were a few months ago. The more serious chemicals is a bit of a mixed bag, also difficult to quantify. Overall, I don't think it has a major impact. Then we come finally to the two main items, is transport. We have typically transport contracts with forwarders, which says a fixed price plus an adjustment for the diesel price.

Speaker #2: They're more way down, so we benefit a bit in Kotka and we suffer a bit in Kwitse Paper for recycling. The indices are gradually moving up.

Speaker #2: So I just wanted to highlight they are somewhat higher than they were a few months ago. The more serious chemicals is a bit of a mixed bag.

Speaker #2: Also, it's difficult to quantify. Overall, I don't think it has a major impact. And then, finally, we can move to the two main items, which are transport.

Speaker #2: So we typically have transport contracts with forwarders, which specify a fixed price plus an adjustment for the diesel price. So it's a question of whether you believe that oil prices will remain unaffected or come down because Iran is involved, and it's a matter of a few months.

Peter Oswald: It's a question of, if you believe that oil prices will rather be unaffected or come down because Iran is sold, then it's a question of a few months. If you believe in other scenarios which say the crisis will deepen, then obviously there is further inflation in transport costs overall. We will be a net beneficiary in Board & Paper because we don't have as high transport costs as our Nordic competitors, but it will affect us. In terms of energy, which is mainly for us gas price, but also electricity, it's again the guess on what happens in the Middle East and in Iran and what are the long-term consequences. I think all predictions have proved constantly wrong. Initially, it was when the war started, many said they would skyrocket, and they didn't.

Speaker #2: If you believe in other scenarios which say the crisis will deepen, then obviously there is further inflation in transport costs overall. We will be a net beneficiary in board and paper because we don't have as high transport costs as our Nordic competitors.

Speaker #2: But it will affect us. In terms of energy, which is mainly our gas price but also electricity, it's again the gas, on what happens in the Middle East and in Iran, and what are the long-term consequences.

Speaker #2: So, I think all predictions have proved constantly wrong. Initially, when the war started, many said there would be a skyrocket, and there didn't. They went up, but didn't skyrocket.

Peter Oswald: They went up but didn't skyrocket, and well, then at least I thought that the situation will at least calm down. All of a sudden it became even worse. I'm reading weekly newsletters on energy from experts who have the best knowledge available. But even here I've seen constantly wrong predictions. I'm just stating, so to say, that as we stand here as of today or as per yesterday, when we finish this, we see cost inflation from energy and transport. These are the main edge issues, and in transport it's about 10% more higher than last year.

Speaker #2: Then, at least, I thought that the situation would calm down. And all of a sudden, it became even worse. So, I mean, I'm reading weekly newsletters on energy from experts who have the best knowledge available.

Speaker #2: But even here, I've seen constantly wrong predictions. I'm just stating this to say that as we stand here today—or as per yesterday, when we finished it—we see cost inflation from energy and transport.

Speaker #2: These are the main issues, and transport is about 10% higher than last year.

Speaker #3: Okay. So you would expect further acceleration in H2 with the fall?

Michael Marschallinger: Okay. So you would expect further acceleration in H2 as well?

Peter Oswald: I think H2, I am pretty sure H2 will be worse than, or we will have higher costs than in H1. Just because as a matter of fact, they are higher in July and August, and now it is anyone's guess if things accelerate, so to say, throughout this quarter. Because gas prices go up even more, yesterday they reached a new high. So are these things getting worse or are these things getting better? Then the question is, of course, and here we are back to market balance. In a more balanced market, we will be able to pass on these prices to our consumers. In a market where there are significant overcapacities and unwillingness to cut capacity, no one dares to fully pass them on, then you have to live with them.

Speaker #2: I think H2—I'm pretty sure H2—will be worse, or we will have higher costs than in H1, just because as a matter of fact, they are higher in July and August.

Speaker #2: And now it's anyone's guess if things accelerate, so to say, throughout this quarter, because gas prices went up even more yesterday. They reached a new high.

Speaker #2: So, are these things getting worse, or are these things getting better? And then the question is, of course, and here we are back to market balance.

Speaker #2: In a more balanced market, we will be able to pass on these prices to our consumers. In a market where there are significant overcapacities and unwillingness to cut capacity, no one dares to fully pass them on.

Speaker #2: And then you have to live with them.

Michael Marschallinger: Okay. Cool. Thanks a lot.

Speaker #3: Okay, cool. Understood. Thanks a lot.

Speaker #2: Thank you. Thank you. There is still a possibility to ask questions. As a reminder, please press the blue Q&A button in the webcast or dial 0 followed by 1 on your telephone keypad.

Peter Oswald: Thank you.

Stephan Sweerts-Sporck: Thank you. There is still a possibility to ask questions. As a reminder, please press the blue Q&A button in the webcast or dial 0 followed by 1 on your telephone keypad. We have another question coming up from Markus Remus, another question from ODDO BHF. Please go ahead, Markus.

Stephan Sweerts-Sporck: Thank you. There is still a possibility to ask questions. As a reminder, please press the blue Q&A button in the webcast or dial 0 followed by 1 on your telephone keypad. We have another question coming up from Markus Remis, another question from ODDO BHF. Please go ahead, Markus.

Speaker #2: And we have another question coming up from Marcus Ramis. Follow-up question from Otto BHF. Please go ahead, Marcus.

Markus Remus: Yeah, thank you. Staying with Board & Paper for 1 more time, please. Now that you are about break even on an adjusted level in the H1, given what you said, some price increases are coming through, more savings. On the other hand is cost inflation. Is it fair to assume that the H2 should also kind of be slightly positive on an adjusted basis? Will you consider this as a realistic range?

Markus Remis: Yeah, thank you. Staying with Board & Paper for 1 more time, please. Now that you are about break even on an adjusted level in the H1, given what you said, some price increases are coming through, more savings. On the other hand is cost inflation. Is it fair to assume that the H2 should also kind of be slightly positive on an adjusted basis? Will you consider this as a realistic range?

Speaker #3: Yeah, thank you. Staying with board and paper for one more time, please. Now that you're about break even on an adjusted level in the first half, given what you said—okay, some price increases are coming through.

Speaker #3: More savings, on the other hand, is cost inflation. Is it fair to assume that the second half should also be slightly positive on an adjusted basis?

Speaker #3: Will you consider this as a realistic range?

Peter Oswald: Mayr, we do not give precise forecasts because we are constantly surprised by how things develop. I would say it this way, I would think it is a rather stable development, minus the annual maintenance shuts. This means the answer to your question is, I think on balance it will be down, but there is a huge variance because it is very difficult to judge whether, whatever it will be, 50, EUR 60 million. I am now referring to the division. If the 50, EUR 60 million contribution from FFF and some other positive developments outweigh higher energy and transport costs and some other cost inflation in variable costs. This is still unclear because I simply do not know, I mean, nobody knows whether in October the gas price will be at EUR 100 or let us say moderated back to EUR 40.

Speaker #2: Ma'am, we don't give precise forecasts because we are constantly surprised by how things develop. I would say, this way, I would think it's a rather stable development, minus the annual maintenance shuts.

Speaker #2: And this means the industry question is, I think, on balance, it will be down. But there is a huge variance because it's very difficult to judge whether it will be 50 or 60 million. I'm now referring to the division—if the 50 or 60 million contribution from FFF and some other positive developments outweigh higher energy and transport costs and some other cost inflation in variable costs.

Speaker #2: And this is still unclear, because I simply don't know. I mean, nobody knows whether in October the gas price will be at 100 euros or, let's say, moderated back to 40 euros.

Peter Oswald: In this way, we do not know it, but it will be a rather similar level minus this EUR 35 million.

Speaker #2: And in this way, we don't know it, but it will be a rather similar level minus this €35 million.

Peter Oswald: In this way, we do not know it, but it will be a rather similar level minus this EUR 35 million.

Speaker #3: Okay, then one question regarding pharma and healthcare packaging. We're seeing a certain trend in terms of the margin development—now, 8% on an adjusted basis in the second quarter, if I did the math right.

Markus Remus: Okay. Then one question regarding MM Pharma & Healthcare Packaging. We are seeing a certain trend in terms of the margin development now 8% on an adjusted basis in Q2, if I did the math right. What would you consider a target profitability level for that business? Apparently there is a lot of restructuring has been done in the past. How advanced are we? How much more homework do you see? This is a business which with kind of looking out 2027, maybe more 2028 can get to the profitability level of MM Food & Premium Packaging.

Markus Remis: Okay. Then one question regarding MM Pharma & Healthcare Packaging. We are seeing a certain trend in terms of the margin development now 8% on an adjusted basis in Q2, if I did the math right. What would you consider a target profitability level for that business? Apparently there is a lot of restructuring has been done in the past. How advanced are we? How much more homework do you see? This is a business which with kind of looking out 2027, maybe more 2028 can get to the profitability level of MM Food & Premium Packaging.

Speaker #3: What would you consider as a target ability level for that business? Apparently, a lot of restructuring has been done in the past.

Speaker #3: How advanced are we? How much more homework do you see? And is this a business which, looking out to '27, maybe more like '28, can get to the profitability level of Food and Premium?

Speaker #2: Yeah. So overall, I mean, first of all, if we talk about EBIT, we have to appreciate that there is also some customer amortization included, which isn't in the food business because that's a legacy business. Whereas this business is a business which we have acquired, and we had to capitalize on the customer relationships and write it off over time.

Peter Oswald: Well, overall, I think first of all, if we talk about EBIT, we have to appreciate that there is also some customer amortization included, which is in the food business because that is a legacy business whereas this business is business which we acquired and we had to capitalize on the customer relationships and write it off over time. So this way, I always think that EBITDA or EBITA would be a better measure. So it has to be very clearly above 10%, the EBIT margin finally, and we know that this is possible. With a number of operations which are more in the 15% range for operating profits, but equally you also have some legacy business which you have to think how you deal with it. On your question, is there a restructuring done? There I can say, yes, it is done.

Speaker #2: So, in this way, I almost think that EBITDA or EBIT would be a better measure, so it has to be very clearly about 10% the EBIT margin.

Speaker #2: Finally, and we know that this is possible, and with a number of operations which are more in the 15% range for operating profit. But equally, you also have some legacy business which you have to think about how you deal with it. On your question—is there a restructuring done? There I can say yes, it's done. Maybe there is a small plant where we still have a question mark, but otherwise it's a solid, sound business which we can support with growth.

Peter Oswald: Maybe there is a small plant where we still have a question mark. Otherwise, it is a solid, sound business which we can support with growth.

Markus Remus: The driver to bring up the margin with the kind of restructuring done is, of course, further cost discipline and to Fit for Future. But how much lever do you see from the top line coming? Because it is a business which, at least in the most recent past, has undershot market growth and I understand there have been some portfolio optimizations. But how should we think about the growth component?

Speaker #3: And the driver to bring up the margin with the kind of restructuring done is, I mean, of course, further cost discipline and fit for future.

Markus Remis: The driver to bring up the margin with the kind of restructuring done is, of course, further cost discipline and to Fit for Future. But how much lever do you see from the top line coming? Because it is a business which, at least in the most recent past, has undershot market growth and I understand there have been some portfolio optimizations. But how should we think about the growth component?

Speaker #3: But how much leverage do you see from the top line coming? Because it's a business which, at least in the most recent past, has undershot market growth. And I understand there have been some portfolio optimizations.

Speaker #3: But how should we think about the growth component?

Speaker #2: Yeah. So we believe that so yeah. We will be let's say it was a bit frustrating to see that with nice growth in some sectors.

Peter Oswald: Yeah. It was a bit frustrating to see that with nice growth in some sectors, and that will gain momentum, because it is a very slow moving industry in terms of it is a long approval process, et cetera. You do not want to deliver the packaging for products which have been for 30 or 100 years around, and it is just about price. But you want to be with new medical treatment, so to say, and work with the customer, and that takes then always several years. We see this pipeline constantly strengthening, which is very good, and we see that the bottom slicing is not completely finished, but is finally coming to an end. Top line will be an important part of it. Of course, there is still a lot of room for productivity improvement.

Speaker #2: And that will gain momentum, because it's a very slow-moving industry in terms of approval process—it's a long approval process, etc. And you don't want to deliver the packaging for products which have been around for 30 or 100 years, and where it's just about price.

Speaker #2: But you want to be with new medical treatment, so to say, and work with the customer, and that always takes several years. And so we see this pipeline constantly strengthening.

Speaker #2: Which is very good. And we see that the bottom slicing is not completely finished, but is finally coming to an end. So, top line will be an important part of it.

Speaker #2: Of course, we still have a lot of room for productivity improvement. But the main driver, hopefully—or it's not just hopefully; we believe it will definitely shift—to top-line growth.

Peter Oswald: The main driver, hopefully, not hopefully, we believe will definitely shift to top line growth. Not just any top line growth, but the top line growth with products which have a good margin because we have developed these products together with the pharmaceutical companies. We are in a top position with long-term contracts where our contribution to developing is also valued.

Speaker #2: And not just any top-line growth, but top-line growth with products which have a good margin, because we've developed these products together with the pharmaceutical companies. And so we are in a top position with long-term contracts where our contribution to developing it is also valued.

Markus Remus: All right.

Markus Remis: All right.

Speaker #2: I hope that has answered your question.

Peter Oswald: I hope that answers your question.

Speaker #3: Yes, definitely. Thank you very much.

Markus Remus: Yes, definitely. Thank you very much.

Markus Remis: Yes, definitely. Thank you very much.

Speaker #2: Thank you. The next question comes from Cole Apple from Jefferies. Hello, Cole. Your line is open. Hello? So perhaps Cole will dial in again, and then it will work.

Stephan Sweerts-Sporck: Thank you. The next question comes from Cole Mayple from Jefferies. Hello, Cole? The line is open. Hello? Cole, perhaps dial in again, and then it will work. Again, a reminder, this is the final call for questions. Please press the blue Q&A button in the webcast or dial zero followed by one on your telephone keypad. I see no more. Oh, Cole is here again.

Speaker #2: Again, a reminder—this is the final call for questions. Please press the blue Q&A button in the webcast or dial zero followed by one on your Peloton keypad.

Speaker #2: So, I see no more—oh, Cole’s here again. Hello, Cole.

Cole Mayple: Good morning.

Speaker #3: Good morning. Good morning. Apologies for that; I just tried to join in from the webcast. Peter, I wonder if you can help me out.

Peter Oswald: Fantastic.

Cole Mayple: Morning. Apologies for that. I just tried to join in from the webcast. Peter, I wonder if you can help me out. I would like to follow up on the slide you showed on your relative cost advantage, particularly on the recycled side. When I look at gas prices here, could you remind us how much hedging Mayr-Melnhof has? The reason I ask this is because you have pulp which consumes gas that has gone under, and I imagine they would not be able to hedge. You have Reno De Medici, whose Apollo has given back the equity stake, and that has just had the bond restructuring. I imagine a lot of your competitors might not have the same level of gas hedges. If gas stays higher, do you expect some of your competitors to take a lot more economic downtime, you to take a little bit more share?

Speaker #3: I'd like to follow up on that slide you showed on your relative cost advantage, particularly on the recycled side. When I look at gas prices here, could you remind us how much hedging Mayr-Melnhof has?

Speaker #3: And the reason I ask this is because you've got Bulb, which consumes gas, that's gone under, and I imagine they wouldn't be able to hedge.

Speaker #3: You've got Renault de Medici, whose Apollo has given back the equity stake, and they've just had the bond restructuring. I imagine a lot of your competitors might not have the same level of gas hedges, and, if expected, I mean your competitors are likely to take a lot more economic downtime. Do you expect to take a little bit more share?

Speaker #3: I mean, hopefully that resolves itself in some capacity, closures, but I'm just wondering: How are you positioned, actually? Even though higher costs are not great, do you actually have a relative advantage here?

Cole Mayple: Hopefully that resolves itself in some capacity closures, but I'm just wondering how you're positioned actually, even though higher costs are not great. Do you actually have a relative advantage here?

Speaker #2: Yeah, on the recycled side, I think we do have a bit of an advantage, obviously. I don't know. And we don't even know from Coles, because even if you go bankrupt, it's up to the administrator to terminate contracts.

Peter Oswald: Yeah. On the recycling side, I think we do have a bit of an advantage. Obviously, I don't know, and we don't even know from pulp, because even if you go bankrupt, it's up to the administrator to terminate contracts. So if they had hedges, they still have them today because he has to terminate them and someone else. The party, the counterparty cannot terminate it. So we simply don't know how much they are hedged. And we are not extremely well hedged. So it's somewhere below 50%. Unfortunately, you should have written your report on the gas price a bit earlier so that we had hedged more. So it is a slight advantage on FBB. I think it's a slight disadvantage, because in Greece we are fully integrated, producing our own energy to a very high degree.

Speaker #2: So, if they had hedges, they still have them today because he has terminated them, and someone else—the party, the counterparty—cannot terminate it.

Speaker #2: So, we simply don't know how much they are hedged, and we are not extremely well hedged. So it's somewhat below 50%. Unfortunately, you should have written your report on the gas price a bit earlier so that we had hedged more.

Speaker #2: But yeah, so it is a slight advantage on FPP. I think it's a slight disadvantage because in Q2 we are fully integrated, producing our own energy to a very high degree.

Speaker #2: In Kotka, we are only partly integrated with the pulp mill, and therefore we have somewhat higher energy costs to buy in. And therefore, we are a bit more dependent, and it's a difficult game, but by investing into the e-boiler from spring next year, we will have more options then to use electricity even for the heat, instead of buying the gas. At the moment, for heat we need the gas.

Peter Oswald: In Kotka, we are only partly integrated with the pulp mill. Therefore, we have somewhat higher energy costs to buy in, and therefore, we are a bit more dependent. It's a difficult game. By investing into the e-boiler from spring next year, we have more options than to use electricity even for the heat instead of buying the gas. At the moment, for heat, we use the gas, but we can play between gas and nuclear power. So that's our situation. I would say on the margin, maybe we have an advantage in recycled, and maybe with a slight disadvantage in virgin.

Speaker #2: But we can play between gas and nuclear power, so that's our situation. So, I would say on the margin maybe we have an advantage in recycled, and maybe a slight disadvantage in virgin.

Speaker #3: Perfect. And then maybe just following up on the acquisition from Renalt de Medici, you haven't given any valuation or price. Is there anything that you can comment on that?

Cole Mayple: Okay. Then maybe just following up on the acquisition from Reno De Medici. You haven't given any valuation or price. Is there anything that you can comment on that? I imagine when you're a core seller, you get a good price, but I'm just wondering a little bit more on the synergies there. You talked about SG&A, maintenance, location of the mills, but is this a WLC mill or a kind of a recycled kraft mill or is it more white top testliner?

Speaker #3: I mean, I imagine when you're a forced seller you get a good price, but I'm just wondering a little bit more about the synergies there.

Speaker #3: You talked about SG&A maintenance location of the mills, but is this a WLC mill, or a kind of a recycled cotton mill, or is it more white top testliner?

Speaker #2: No, it is a WLC grade in more of the light grammages. So what we then call WLC liner. I mean, we have agreed, or in the contract notes, to name the price. I mean, what we can say is it's not material.

Peter Oswald: It is a WLC grade in more the lighter grammages, so what we then call WLC liner. We have agreed or in the contract not to name the price. What we can say, it is not material, what has been invested there. We have to work on the costs and see how this works out all together and also how the overall market develops.

Speaker #2: What has been invested there, and, yeah, we have to work on the costs and see how this works out altogether, and also how the overall market develops.

Speaker #3: Thank you. And then just.

Cole Mayple: Thank you. Just-

Peter Oswald: But it is the consolidation of the market because, especially in Germany, we were historically fierce competitor. So, they were extremely aggressive.

Speaker #2: But if the consolidation of the market—because, yeah, especially in Germany, we were historically a fierce competitor, and, yeah, they were extremely aggressive.

Speaker #3: Thank you. Let's hope there is more economic downtime and that other players have fewer gas hedges for you going forward. But maybe following up on the cost point—you did mention wood costs, and I'd like to follow up on Poland.

Cole Mayple: Thank you. Let us hope there is more economic downtime and other players have less gas hedges for you going forward. Maybe following up on the cost point, you did mention wood costs, and I would like to follow up on Poland, considering that there has been some restrictions on harvesting levels. Is there anything that you can call out or any kind of lobbying that Mayr-Melnhof can do to kind of maintain reasonable wood supply to your mill, make sure that you do not have a situation where availability becomes an issue and wood costs continue to inflate?

Speaker #3: Considering that there have been some restrictions on harvesting levels, is there anything that you can call out, or any kind of lobbying that Mayr-Melnhof can do to maintain a reasonable wood supply to your mill and make sure that you don't have a situation where availability becomes an issue and wood costs continue to inflate?

Speaker #2: Yeah, of course, we are lobbying on that. And I wouldn't see it as particularly worrying. I think we've all evolved in the Nordics. You have various interest groups who say we should put more, and also EU legislation—more and more forest should be put aside to be preserved, be natural, and not used for harvesting.

Peter Oswald: Yeah, of course, we are lobbying on that. I would not see it as particularly worrying. I think with all over in the Nordics, you have various interest groups who say we should put more, and also EU legislation more and more forest should be put aside to be preserved and be natural and not used for harvesting. We are working on it. It is a sad story, but Poland has lost, I think 30,000 jobs in the wood converting industry, over the last three or four years because a number of specialist owners have gone bankrupt. The demand is adjusting to the supply. We do not see the price increases, let us say, are, of course, in contrast to the Nordics, but they come from a much lower level, and they are less than they are, for instance, in Austria or some other kind of Central European countries.

Speaker #2: So, we are working on it. I mean, it's a sad story, but Poland has lost, I think, 30,000 jobs in the wood converting industry.

Speaker #2: Over the last three or four years, because a number of especially sawmills have gone bankrupt. And so, the demand is adjusting to the supply.

Speaker #2: And we don't see the price increases, let's say, are of course in contrast to the Nordics, but they come from a much lower level and they are less than they are, for instance, in Austria or some other Central European countries.

Speaker #3: And then, just finally—maybe this is a question for Franz—but your contribution on Fit for Future, extra kind of €60 million into 2027?

Cole Mayple: Then just finally, maybe this is a question for Franz, but your contribution on Fit for Future, an extra kind of EUR 60 million into 2027, it is a big number. What kind of visibility do you have on delivering that? Because it is a big improvement, it is a big increase from the original EUR 250 million. Just what gives you the confidence in actually being able to deliver that number?

Speaker #3: I mean, it is a big number. What kind of visibility do you have on delivering that? Because that—I mean, it is a big improvement, a big increase from the original 250.

Speaker #3: So just what gives you the confidence in actually being able to deliver that number?

Speaker #2: Yeah. There is a number called the run rate. So what projects are what we call L4. So they are executed for at least one month—in many cases, several months—until we see that it's a sustainable improvement, as I explained earlier.

Peter Oswald: Yeah, there is a number called the run rate. Both projects are what we call L4, so they are executed for at least one month, in many cases, several months until we see that it is a sustainable improvement, as I explained it earlier. We are currently at about 270 L4 and L5. The spend has been there for more than a year. We have spend visibility. So this is already banked. Then we have an L3 number, which is everything has been prepared, everything has been identified. We are already in the testing phase, but we do not know if the full benefits will come through. In some cases, there is a higher uncertainty like in procurement. The tender has been done, but we have not received the offers yet, or have not finalized, have not signed something.

Speaker #2: And so we are currently at about 270 L4, and L5 has been there for more than a year. And we have then visibility.

Speaker #2: So this is already banked, and then we have an L3 number, which means everything has been prepared, everything has been identified. We are already in the testing phase, but we don't know if the full benefits will come through.

Speaker #2: And in some cases, there is a higher uncertainty, like in procurement. So, the tender has been done, but we haven't received the offers yet.

Speaker #2: Or haven't finalized, haven't signed something. In some cases, there is less. Like we see, yes, we have good success, but we still want to look one or two months more in order to do it.

Peter Oswald: In some cases, there is less, like we see as we have good success, but we still want to look one or two months more in order to do it. This is a very significant number, which gives us confidence that the 330 is really a very conservative number.

Speaker #2: And out of—and this is a very significant number, which gives us confidence that the 330 is really a very conservative number.

Speaker #3: Thank you.

Cole Mayple: Thank you.

Speaker #2: Thank you, Cole. So, since we have crossed the hour, I think we will come slowly to an end of this conference call. Thank you for your participation.

Stephan Sweerts-Sporck: Thank you, Cole. Since we have crossed the hour, I think we will come slowly to an end of this conference call. Thank you for your participation, the questions, the interest in MM. Peter, perhaps a final sentence before we quit.

Speaker #2: Are there any questions regarding the interest in the amendment, Peter? Perhaps a final sentence before we conclude.

Peter Oswald: Yeah. Sorry, I talked so much there is almost nothing to say. We have this adverse market situation in parts of our MM Board & Paper business, where we cannot logically judge how or when it can be changed. But being in a strong position in terms of cost curve, capacity utilization, sales focused on Europe, sitting in the middle of the continent, we feel that we are in a very good position. At the same time, we will develop our two packaging business, which has delivered a strong result further, and that will, going forward, I believe, show also more organic growth. In this way, this part of the business will grow and develop. In this way, I also want to use this opportunity to thank all our employees. They have done a fantastic job.

Speaker #1: Yeah. So, I talked so much, there is almost nothing left to say. We have this adverse market situation in parts of our board and paper business.

Speaker #1: And where we can't logically judge how and when it can be changed. But being in a strong position in terms of cost curve, capacity utilization, sales focused on Europe, sitting in the middle of the continent, we feel that we are in a very good position.

Speaker #1: And then at the same time, we will develop our two packaging businesses, which have delivered a strong result. Further, and they will, going forward I believe, also show more organic growth.

Speaker #1: And in this way, this part of the business will grow and develop. And in this way, I also want to use this opportunity to thank all our employees that have done a fantastic job.

Speaker #1: It's not easy if there are so many headwinds you have to face, but finally I'm confident. And we shouldn't forget that, comparing ourselves to many peers, the results for the first half year were more or less the same as the year before.

Peter Oswald: It is not easy if there are so many headwinds you have to face. But finally, I am confident, and we shouldn't forget that comparing ourselves to many peers, that a result like H1 was more or less the same as a year before. That doesn't sound very exciting in itself, but if you study a number of annual reports of other companies, then I think you will see that this is quite an achievement. In this way, we look positive to the future. Thank you.

Speaker #1: That doesn't sound very exciting in itself, but if you study a number of annual reports of other companies, then I think you'll see that this is quite an achievement.

Speaker #1: And in this way, we look positively to the future. Thank you.

Stephan Sweerts-Sporck: Thank you again, and we wish you a great day and say goodbye to all. Bye-bye.

Peter Oswald: Bye. Have a good day. Bye-bye.

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