Slide 1: Q2 2020 Financial Results
Q2 2020 FINANCIAL RESULTS August 6, 2020
Slide 2: Disclaimer
DISCLAIMER FORWARD-LOOKING STATEMENT Certain statements in this presentation, including statements regarding future results and performance, are forward-looking statements within the meaning of securities legislation based on current expectations. The accuracy of such statements is subject to a numb
Slide 3: Summary of Quarterly Financial Results
SUMMARY OF QUARTERLY FINANCIAL RESULTS2 186 43 39 54 58 156 161 152 161 31 26 28 29 22 82 108 90 94 (26) (1) 2 Q2 2019 Q3 2019 2 Q4 2019 Q1 2020 Q2 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 1 Operating Income (loss) Adjusted OIBD Net Earnings (loss) Adjusted Net Earnings 1 Figures above in millio
Slide 4: Historical Segmented Quarterly Operating Income (Loss) & Adjusted OIBD
HISTORICAL SEGMENTED QUARTERLY OPERATING INCOME (LOSS) & ADJUSTED OIBD1,2 Containerboard (millions of CAN$) Boxboard Europe2 (millions of CAN$) 113 118 106 43 99 94 30 30 30 84 91 25 24 19 14 20 69 74 54 (6) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Operating In
Slide 5: Historical Segmented Quarterly Shipments
HISTORICAL SEGMENTED QUARTERLY SHIPMENTS Containerboard ('000 s.t. and % capacity utilization1) Boxboard Europe ('000 s.t. and % capacity utilization1) 351 377 374 363 365 360 331 101% 326 98% 321 94% 95% 94% 91% 92% 92% 93% 305 88% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q2 2019 Q3 2019 Q4 2019 Q1
Slide 6: Raw Material Costs - Index List Prices
RAW MATERIAL COSTS - INDEX LIST PRICES ($ US/t.c.) Recycled Fibre Prices Current ($ US/t.m.) Virgin Pulp Prices Current (July-20) (Jun-20) 250 1,500 225 1,400 200 1,300 175 150 150 1,200 1,160 125 1,100 100 1,000 75 900 900 50 58 25 800 0 700 May 16 Aug 16 Nov 16 Feb 17 May 17 Aug 17 Nov 17 Feb 18 M
Slide 7: Segmented Review
SEGMENTED REVIEW = 9 O18Me- 8
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Results Change vs. Comments on sequential performance Q2 2020 Q1 2020 Q2 2019 è Shipments decreased by 4% sequentially. This was driven by a 7% decrease in Shipments ('000 s.t.) manufacturing shipments that reflect lower demand and 16.5 days of planned maintenance
Slide 9: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q2 2020 Q1 2020 Q2 2019 è The 8% sequential decrease in shipments was driven in large part by the 11% decrease Shipments ('000 s.t.) in shipments of converted products. This was primarily a reflection of the Covid-19 related 167 (8)
Slide 10: Packaging Products / Boxboard Europe
PACKAGING PRODUCTS / BOXBOARD EUROPE Results Change vs. Comments on sequential performance Q2 2020 Q1 2020 Q2 2019 Shipments ('000 s.t.) è Shipments of virgin boxboard decreased by 2,000 s.t., or 3%, in the second quarter of 2020 compared to the prior quarter, while shipments of recycled boxboard de
Slide 11: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q2 2020 Q1 2020 Q2 2019 è The sequential sales increase reflects increases in most business sub-segments. This was Sales (M$) most notable in food packaging, where volumes increased 20% sequentially. Conver
Slide 12: Financial Review
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Slide 13: Key Performance Indicators (KPIs)
KEY PERFORMANCE INDICATORS (KPIs) Total Shipments1 ('000 s.t.) Capacity Utilization Rate1-2 (manufacturing only) 906 97% 859 93% 93% 849 853 92% 837 90% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 LTM Return on Assets LTM Working Capital (% of LTM Sales) 12.7% 10.
Slide 14: Year Over Year Sales Reconciliation
YEAR OVER YEAR SALES RECONCILIATION (M CAN$) +1% 1,400 1,350 28 35 (10) 1,300 1,285 (21) 1,275 (22) 1,250 Business Sales Other closure and Sales (M CAN$) Q2-2019 Volume F/X CAN$ variances Price & Mix disposal Q2-2020 Containerboard 462 (3) 9 — (14) — 454 Boxboard Europe 270 (3) 4 — (6) — 265 Special
Slide 15: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) -2% 1,400 17 30 1,350 1,313 (4) 1,300 1,285 1,250 (71) 1,200 1,150 1,100 Sales Sales (M CAN$) Q1-2020 F/X CAN$ Price & Mix Other variances Volume Q2-2020 Containerboard 458 7 5 — (16) 454 Boxboard Europe 272 8 3 — (18) 265 Specialty Products 113 3 3 — 1 120 T
Slide 16: Year-Over-Year Operating Income Reconciliation
YEAR-OVER-YEAR OPERATING INCOME RECONCILIATION + Lower production, logistics and SG&A costs + Lower production, logistics and SG&A + Higher profitability from recovery + Higher volumes and recycling activities - Lower average selling price + Contribution from Orchids business acquisition - Higher co
Slide 17: Sequential Operating Income Reconciliation
SEQUENTIAL OPERATING INCOME RECONCILIATION + Lower energy costs and energy credits + Lower production and SG&A costs + Higher received profitability from recovery and recycling activities - Lower volumes + Lower production and SG&A costs - Lower average selling prices - Higher brown recycled fibres
Slide 18: Q2-20 Adjusted OIBD to Operating Income Reconciliation
Q2-20 ADJUSTED OIBD TO OPERATING INCOME RECONCILIATION (M CAN$) 200 186 150 111 94 100 (75) (1) (13) 50 (2) (1) 0 Adjusted Depr. & Adjusted Loss on acq. Impairment Restructuring Unrealized loss Operating 1 OIBD Amort. Operating and others charges costs on financial Income Income 1 instruments Contai
Slide 19: Net Earnings - IFRS vs Adjusted
NET EARNINGS - IFRS VS ADJUSTED NET EARNINGS NET EARNINGS (LOSS) PER SHARE1 (in millions of Canadian dollars, except amount per share) Q2-2020 Q2-2020 As per IFRS 54 $ 0.57 Specific items: Loss on acquisitions, disposals and others 1 $ — Impairment charges 13 $ 0.10 Restructuring costs 2 $ 0.02 Unre
Slide 20: Quarterly Year-Over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2 0.80 0.01 0.61 0.10 0.02 0.60 0.57 0.24 (0.03) (0.04) (0.03) $ cents 0.40 0.33 0.28 (0.05) 0.20 0.00 EPS reported Specific Adjusted EPS OIBD Depreciation Financing Share of Non- Income Adjusted EPS Specific EPS reported Q2-2019 items Q2-2019 2 & expe
Slide 21: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 0.80 0.19 0.04 0.61 0.60 — 0.57 (0.03) (0.01) (0.04) 0.18 0.42 $ cents 0.40 0.24 0.20 0.00 EPS reported Specific Adjusted EPS OIBD Depreciation Financing Non- Income Adjusted EPS Specific EPS reported Q1-2020 items Q1-2020 2 & expense & controlling tax Q
Slide 22: Cash Flow Overview
CASH FLOW OVERVIEW 153 153 162 162 97 52 38 59 124 125 16 104 108 107 91 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 CF from oper. Adj. CF from oper. 3 Adjusted Free Cash Flow 3 Figures above in millions of CAN$ Figures above in millions of CAN$ 2018 2019 2020 (In
Slide 23: Net Debt Reconciliation - Q2 2020
NET DEBT1 RECONCILIATION - Q2 2020 (M CAN$) 2,250 2,212 2,200 2,150 2,100 38 2,077 2,050 34 (162) 4 10 2,000 — (59) 1,950 1,900 Net debt as at Cash flow F/X CAN$ Investments Right-of-use assets Dividends paid & Changes in Payments for Net debt as at March 31, 2020 from oper. and others and included
Slide 24: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / LTM Adjusted OIBD1,3 Interest Coverage Ratio2,3 5.0x 6.5x 4.6x 4.7x 6.0x 5.8x 4.0x 3.8x 3.6x 4.7x 4.6x 3.5x 4.3x 3.25x 3.1x 3.4x 3.4x 3.0x 2012 2013 2014 2015 2016 2017 2018 2019Q2 2020 2012 2013 2014 2015 2016 2017 2018 2019 Q2 2020 Net Deb
Slide 25: Capital Investments
CAPITAL INVESTMENTS (in millions of Canadian dollars, including capitalization of IT projects, excluding value of leases) Excludes potential Bear 360 Island investments 40 81 274 2020 CAPEX: 47 ± $175-$200 M1 218 20 46 35 104 30 61 18 80 22 184 27 39 20 66 25 62 30 2017 2018 2019 2020 Containerboard
Slide 26: Concluding Remarks
CONCLUDING REMARKS 26
Slide 27: Near Term Factors
NEAR TERM FACTORS • Containerboard: expect slight volume increase, • Containerboard: expect lower average selling price lower sequential raw material costs to negatively impact results YoY • Boxboard Europe: sequential gradual benefit from à • previously announced price increase Raw material: lower
Slide 28: Appendix
APPENDIX —s Ne | a
Slide 29: Segmented YoY Operating Income Waterfalls
SEGMENTED YoY OPERATING INCOME WATERFALLS Containerboard (millions of CAN$) Boxboard Europe (millions of CAN$) 160 60 3 13 3 7 30 113 43 (12) 120 9 84 94 (29) 40 (14) 11 30 (6) 30 80 (1) (21) 54 19 (1) 20 40 (11) 0 0 Q2 2019 Depr. & Q2 2019 Other prod. Other Price Raw Q2 2020 Depr. & Q2 2020 Q2 2019
Slide 30: Segmented Sequential Operating Income Waterfalls
SEGMENTED SEQUENTIAL OPERATING INCOME (LOSS) WATERFALLS Containerboard (millions of CAN$) Boxboard Europe (millions of CAN$) 8 160 50 11 43 (12) 19 40 (1) 120 28 99 11 30 (5) 30 94 (29) 74 30 20 (1) (5) (8) 80 54 20 (3) (25) (1) 40 (11) 10 0 0 Q1 2020 Depr. & Q1 2020 Energy Other Other Volume Q2 202
Slide 31: Selected Reference Prices
SELECTED REFERENCE PRICES Current (US$/s.t.) Containerboard - Selected Products Current (Euro€/s.t.) Boxboard Europe - Selected Products (Jun-20) 800 (Jun-20) 1,200 1,100 1,096 700 715 1,000 615 900 600 800 500 700 661 600 400 500 May 17 Aug 17 Nov 17 Feb 18 May 18 Aug 18 Nov 18 Feb 19 May 19 Aug-19
Slide 32: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q2 2020 vs Q2 2020 vs 2018 2019 2020 Q2 2019 Q1 2020 These indexes should only be used as an indicator of trends and they may be different than our actual selling prices or purchasing costs. Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 (units) (%) (units) (%) Sel
Slide 33: For More Information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investor@cascades.com 33