Cascades Inc. · TSX:CAS
Cascades — Q2 2010 Earnings Presentation
29 slides from Cascades's earnings presentation, Aug 11, 2010
Slide 1: Review of financial results Q2 2010
CASCADES Review of financial results Q2 2010 August 11, 2010
Slide 2: Disclaimer
DISCLAIMER 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 number of risks, uncertainties
Slide 3: Opening Remarks
OPENING REMARKS 3
Slide 4: Quarterly Highlights
QUARTERLY HIGHLIGHTS •Net earnings per share of $0.22 compared to net earnings per share of $0.00 in the previous quarter. •Operating income before depreciation and amortization (EBITDA) excluding specific items of $ 107 million, up 37% in comparison to Q1 2010. •Cash flow from operations almost dou
Slide 5: Summary of Financial Results
SUMMARY OF FINANCIAL RESULTS 2008 2009 2010 (In millions of CAN$, except amount per share) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Financial results Sales 4,017 970 981 974 952 3,877 942 998 Excluding specific items EBITDA 306 107 121 127 110 465 78 107 Net earnings (loss) 4 21 28 35 26 110 0 21 Net earnings (l
Slide 6: Segmented EBITDA
SEGMENTED EBITDA Boxboard (% of sales) (M CAN$) (M CAN$) Containerboard (% of sales) 33 35 12.0% 45 18.0% 32 26 29 30 41 10.0% 38 39 25 24 23 40 8.0% 37 36 15.0% 20 35 6.0% 32 31 15 30 30 9 10 11 4.0% 30 28 10 12.0% 5 3 2.0% 25 0 0.0% 20 9.0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q
Slide 7: Pricing and Cost Environment
PRICING AND COST ENVIRONMENT Selling Cascades North American manufacturing selling price Raw material prices and raw material cost indices (US$) costs 750 1 200 650 550 EBITDA 1 100 EBITDA $107 M EBITDA $78 M 450 $107 M EBITDA EBITDA EBITDA $127 M $110 M $121 M 350 1 000 250 900 150 Q1 2008 Q2 2008
Slide 8: Financial Review
FINANCIAL REVIEW 8
Slide 9: Q2 2010 EBITDA Variance Analysis
Q2 2010 EBITDA VARIANCE ANALYSIS (M$) 160 7 4 (8) 140 10 (23) 39 120 107 100 78 80 60 40 20 0 Q1 2010 EBITDA Selling prices & mix Volumes Energy costs Variation of the CAN$ Cost improvements & Raw material costs & Q2 2010 EBITDA other items mix Containerboard 28 24 (2) 1 - (4) (8) 39 Boxboard 23 6 5
Slide 10: Key Performance Indicators
KEY PERFORMANCE INDICATORS (KPIs (KPIs) KPIs) Total shipments & Manufacturing capacity ('000 s.t.) utilization rate 1000 100% 875 853 889 820 843 779 724 762 792 798 800 95% 390 364 386 341 334 324 353 600 352 311 330 90% 400 85% 511 467 499 427 432 451 464 496 490 200 413 80% 0 75% Q1 2008 Q2 2008
Slide 11: Key Performance Indicators
KEY PERFORMANCE INDICATORS (KPIs (KPIs) KPIs) 2008 2009 2010 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Operational Total shipments (in '000 of s.t.) Packaging 2,925 618 653 672 674 2,617 701 712 Tissue papers 471 106 109 120 124 459 119 131 Total 3,396 724 762 792 798 3,076 820 843 Capacity utilization rate - % 8
Slide 12: Q2 2010 EBITDA to Operating Income Reconciliation
Q2 2010 EBITDA TO OP. INCOME RECONCILIATION (M$) 120 107 (51) 600 100 80 56 (6) 60 50 40 20 0 EBITDA excl. spec. items Depreciation & amortization EBIT excl. spec. items Unreal. loss on finan. inst. Operating income Q2 2010 Container- Specialty Tissue Corporate Total (in millions of Canadian dollars
Slide 13: Q2 2010 Net Earnings Reconciliation
Q2 2010 NET EARNINGS RECONCILIATION (M$) 30 6 (6) 25 21 21 20 15 10 5 0 Net earnings F/X gain on long- Unrealized loss on Net earnings excluding spec. term debt finan. instr. (GAAP) items (non-GAAP) 13
Slide 14: Cash Flow Overview
CASH FLOW OVERVIEW 2008 2009 2010 (in millions of CAN$) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Cash flow from operations 155 68 81 94 62 305 38 71 Working capital variation (31) (1) 1 23 29 52 (5) (54) Cash flow provided by operations 124 67 82 117 91 357 33 17 Capital expenditures & other assets (183) (43) (3
Slide 15: Net Debt Reconciliation
NET DEBT RECONCILIATION (M$) 1,700 25 7 (71) 30 1,600 54 1,553* 1,508 1,500 1,400 1,300 1,200 1,100 1,000 Net debt March Variation of Var. of F/X CAPEX and Dividend, stock Cash flow from Net debt June 31, 2010 working capital other assets buyback & operations 30, 2010 others Net debt up mainly due t
Slide 16: Balance Sheet & Key Financial Ratios
BALANCE SHEET & KEY FINANCIAL RATIOS 2008 2009 2010 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Total assets 4,031 4,041 3,886 3,877 3,792 3,792 3,764 3,796 Total debt 1,812 1,818 1,670 1,590 1,552 1,552 1,531 1,575 Net debt* 1,800 1,805 1,658 1,569 1,533 1,533 1,508 1,553 Shareholders' equity 1,256 1,289 1,309 1,3
Slide 17: Segmented Review
SEGMENTED REVIEW 17
Slide 18: Packaging - Boxboard
PACKAGING - BOXBOARD Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price Reference price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US or euro/s.t.) ($US or euro/s.t.) Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010
Slide 19: Packaging - Containerboard
PACKAGING - CONTAINERBOARD Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price Reference price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t. or msf) ($US/s.t. or msf) ($US/s.t.) Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2
Slide 20: Packaging – Specialty Products
PACKAGING – SPECIALTY PRODUCTS Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US/s.t.) Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Industria
Slide 21: Tissue Papers
TISSUE PAPERS Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price 1 Reference price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US/s.t.) ($US/s.t.) Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 2010 Q2 2010 Q1 20
Slide 22: Q&A
Q&A 22
Slide 23: Concluding Remarks
CONCLUDING REMARKS 23
Slide 24: Third Quarter Outlook
THIRD QUARTER OUTLOOK Boxboard Boxboard Specialty Containerboard Tissue papers North America Europe products Slight Slight Slight Slight Volume Stable Decrease Decrease Increase Increase Slight Slight Slight Selling prices Increase Stable Increase Increase Increase Raw material Slight Decrease Stabl
Slide 25: Third Quarter Outlook
THIRD QUARTER OUTLOOK (US$/ton) North American OCC reference (publication) prices 200 180 160 140 120 100 80 60 40 20 0 Jan 08 Mar 08 May 08 July 08 Nov 08 Jan 09 Mar 09 May 09 July 09 Nov 09 Jan 10 Mar 10 May 10 Sept 08 Sept 09 Dow Jones (New England) OBM No.11 (New England) PPW no. 11 (NY & Chicag
Slide 26: Appendices
APPENDICES 26
Slide 27: Market Prices and Costs Summary
MARKET PRICES AND COSTS SUMMARY Change Change Q2 2010 Q2 2010 Q2 2010 Q2 2010 2008 2009 2010 Q2 2009 Q2 2009 Q1 2010 Q1 2010 Average Average Average Average Average Average Average Average Average These indexes should only be used as indicator of trends and they be Q1 Q2 Q3 Q4 Q1 Q2 different than o
Slide 28: Notes
NOTES 1. The Cascades North American selling prices index represents an approximation of the Company’s manufacturing selling prices in North America (excluding Converting products). It is weighted according to shipments and is based on the average selling price of our North American manufacturing op
Slide 29: For more information
For more information: www.cascades.com/investors www.cascades.com/investors Didier Filion Director, Investor Relations didier_filion@cascades.com 514- 514-282- 282-2697 29 CREDIT: IMAGE ECOterre