Welcome everyone, and thank you for joining us for the presentation of Mayr-Melnhof's 2026 half-year results. I am pleased to report a strong earnings performance, given subdued market conditions. Adjusted operating profit was broadly in line with the prior year on a like-for-like basis, excluding TANN, and showed a clear improvement compared with the second half of 2025. A major driver behind this performance was our Fit-For-Future program, which delivered a contribution of EUR 105 million in the first six months, year- on- year, well above our initial expectations. This contribution compensated mainly for lower selling prices in our Board & Paper business, and it underlined the increasing effectiveness of our profitability improvement initiatives across the group. We are particularly pleased with the strong development of our two packaging divisions. I will come to the details. Let me briefly turn to our financial performance of the group.
Adjusted EBITDA reached EUR 200 million, and adjusted operating profit around EUR 90 million. Marginally down from the previous year on a like-for-like basis, excluding TANN, and clearly ahead of the second half of 2025. Our adjusted operating margin slightly improved to 4.9% and adjusted EBITDA to 10.8%. Cash flow from operating activities improved significantly to EUR 145 million due to normalization in working capital. As a consequence, free cash flow was positive at EUR 37 million. Despite our above normal CapEx program, which will continue, by the way, until end of 2027, then our CapEx level will significantly come down. At the same time, our balance sheet remains strong, with an equity ratio of 47% and net debt to adjusted EBITDA at 2.4 x, which is within our long-term target range.
The success of the Fit-For-Future program so far attained has given us even more confidence on its overall contribution. Therefore, we have increased our target for cumulative P&L benefits to more than EUR 330 million by 2027 compared with the 2024 baseline, excluding TANN. This is much more than the EUR 250 million, which we have communicated earlier this year. This program is really getting a lot of momentum. Now, looking at our divisions in more detail. Food & Premium Packaging improved adjusted operating profit by more than 6% on a like-for-like basis, demonstrating the resilience of its business model and the benefits of the Fit-For-Future program. We also strengthened our market position through signing of several long-term customer agreements and continue to drive innovation in sustainable packaging, particularly innovative solutions replacing plastic.
Our expansion project in Romania remains on track and will start commercial production by October as planned. Pharma & Healthcare Packaging delivered another outstanding performance in the first half of 2026. It improved adjusted operating profit by 28% year on year. Growth in North America, Ireland, and selected pharma applications, including GLP-1-related products, supported a strong business development. Continued productivity improvements, selective footprint optimization in France and Spain, and close customer partnerships further enhanced our profitability. Now, with an EBITDA margin of 14.3%, the division has now caught up to the level of its sister division, Food & Premium Packaging, significantly up from a few years ago. In addition, several long-term agreements were signed with key pharma customers, strengthening our strategic relationships and supporting the division's attractive long-term growth prospects. In Board & Paper, market conditions remained unfavorable.
Selling prices were significantly lower than in the first half of 2025. However, customers awarded us more volume in Europe, thanks to our superior products and service offering. We gained market share in Europe, both in recycled cartonboard and fresh fibre folding boxboard, and therefore our capacity utilization improved and operational efficiency reached new levels. Sustainability remains a core element of our strategy and our daily operations. We are therefore particularly pleased that MM's sustainability performance continued to receive international recognition during the first half of 2026. Recently, we received the Platinum award from EcoVadis, up from the Gold award. Before concluding, I would like to sincerely thank the entire MM team. The achievements of the first half year are the direct result of the commitment, the teamwork, and the determination of our people to continuously improve, particularly during demanding market conditions.
Our success with the Fit-For-Future program clearly demonstrates what we can achieve together. Looking ahead to the second half of 2026, we expect market conditions to remain unfavorable. Due to the Iran war, consumer demand remains subdued and the number of costs like transport, energy, chemical, wood, paper for recycling have increased. In addition, annual maintenance standstills at MM Kwidzyn and MM Kotka mills are expected to impact third quarter operating profit by approximately EUR 35 million. However, these headwinds will be partly mitigated by a growing volume and slightly improving price levels across selected board and paper grades, continued growth in attractive pharma and consumer packaging applications, and a further Fit-For-Future contribution of more than EUR 100 million in the second half of the year.
At the same time, we continue to invest in the future of MM, so we haven't cut our investments to the bone. Major projects at MM Kwidzyn aim at increasing energy efficiency and reducing costs, and this remains fully on track. These projects are expected to make an important contribution to earnings from 2027 onwards. The recently announced planned acquisition of the Arnsberg board mill, which is still subject to regulatory approvals, represents another important step in strengthening our core cartonboard business, and it offers attractive synergy potential. Overall, MM is well-placed because of its strong industry expertise and its superior well-invested asset base. We remain firmly focused on strengthening profitability, investing in sustainable cost competitiveness, and creating long-term value through our leadership in consumer packaging. Thank you