Slide 1: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS August 8, 2024
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 Financial Results
SUMMARY OF FINANCIAL RESULTS (In millions of CAN$, except per common share amounts, where noted) Q2 2024 Q1 2024 Q2 2023 LTM2 Financial Results Sales 1,180 1,109 1,168 4,625 Operating income 34 9 64 99 Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A))1 112 103 141
Slide 4: Overview of Consolidated Profitability Drivers
OVERVIEW OF CONSOLIDATED PROFITABILITY DRIVERS Consolidated EBITDA (A)1 Variation Quarter-over-Quarter Year-over-Year (in millions of Canadian dollars) Q2 2024 vs Q1 2024 Q2 2024 vs Q2 2023 Pricing $12 million ($25 million) Freight & Production Costs ($6 million) $4 million Volume & Mix, FX & Others
Slide 5: Recycled Fibre Costs - Index List Prices
RECYCLED FIBRE COSTS - INDEX LIST PRICES ($ US/s.t.) Current OCC: (July-24) • Strong domestic demand driven by new recycled containerboard mills being ramped-up; fibre generation increased with usual favourable seasonal generation and consistent export volumes • Expect relatively stable market dynam
Slide 6: Virgin Pulp Costs - Index List Prices
VIRGIN PULP COSTS - INDEX LIST PRICES ($ US/metric ton) Current VIRGIN PULP: (July-24) • Market began to normalize following factors that 1,790 impacted pricing in Q1: port strike, unplanned mill downtime in Finland and hindered logistics 1,500 • Lower demand in China led to first price reduction in
Slide 7: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Comments on sequential performance Results Change vs. Q2 2024 Q1 2024 Q2 2023 è Total shipments increased by 1% sequentially. Shipments of parent rolls decreased by 2% related to extended downtime at the Greenpac and Bear Island mills following a Shipments (’000 s
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Quarterly EBITDA (A)1 (M CAN$) è Sequential Q2 shipments of converted products: Canada +5.9% (vs. market 6.2%); US -2.1% (vs. market +3.3%) è Year-over-year Q2 shipments of converted products: Canada +7.8% (vs. market +5.8%); US +0.6% (vs. market +1.1%) è Packagin
Slide 9: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q2 2024 Q1 2024 Q2 2023 è Sales increased sequentially by $7 M or 4%, with Plastics food packaging products Sales (M$) higher sales volume by 18% sequentially or $8 M. This was partially offset by lower shi
Slide 10: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Quarterly EBITDA (A)1 (M CAN$) è Cardboard: results decreased sequentially largely as a result of lower volumes in the Honeycomb sub-segment and higher raw material prices. è Moulded pulp: Slightly lower results sequentially driven by a less favourable mix of
Slide 11: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q2 2024 Q1 2024 Q2 2023 è Shipments increased by 6% on a sequential basis, reflecting an 8% increase in shipments Shipments (’000 s.t.) of converted products and lower shipments of parent rolls (-10%) due to higher integration. 122
Slide 12: Tissue Papers
TISSUE PAPERS Quarterly EBITDA (A)1 (M CAN$) è Q2 2024 Shipments of Converted Products: Retail tissue Away-from-Home tissue 10.7 M cases 5.4 M cases Q2 vs. Q1: +1.5% Q2 vs.Q1: +16.0% Q2 vs. Q2: +4.8% Q2 vs.Q2: -0.5% Quarterly Sales and Average Selling Price Quarterly Shipments (’000 s.t. and % capac
Slide 13: Q2 2024 EBITDA (A) To Operating Income Reconciliation
Q2 2024 EBITDA (A)1 TO OPERATING INCOME RECONCILIATION (M CAN$) 1 Corporate, Recovery and Container- Specialty Tissue Recycling (M CAN$) board Products Papers activities Total Operating income (loss) 15 19 38 (38) 34 Depreciation and amortization 38 6 13 12 69 Restructuring costs 6 1 3 — 10 Unrealiz
Slide 14: Net Earnings - As Reported vs Adjusted
NET EARNINGS - AS REPORTED vs ADJUSTED2 NET EARNINGS NET EARNINGS PER COMMON SHARE1 (In millions of Canadian dollars, except per common share amounts) Q2 2024 Q2 2024 As reported 1 $0.01 Specific items: Restructuring costs 10 $0.07 Unrealized gain on financial instruments (1) ($0.01) Unrealized loss
Slide 15: Quarterly Year-over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2 2 2 2 (1) After-tax variance normalized at 26% tax rate, except for Income tax variance column. (2) Please click here for supplemental information on non-IFRS Accounting Standards measures and other financial measures available on pages 28 to 33 of o
Slide 16: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 2 2 2 (1) After-tax variance normalized at 26% tax rate, except for Income tax variance column. (2) Please click here for supplemental information on non-IFRS Accounting Standards measures and other financial measures available on pages 28 to 33 of our 2
Slide 17: Cash Flow Overview
CASH FLOW OVERVIEW 2022 2023 2024 (In millions of CAN$, except per common share amounts) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 YTD4 LTM5 Cash flow from operations 19 81 60 100 260 89 117 100 91 397 32 78 110 301 Specific items1 7 — 2 3 12 1 5 6 12 24 14 17 31 49 Adjusted cash flow from operations2
Slide 18: New Capital Investments
NEW CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding new leases, disposal of assets and accounts payable variation) 2024 Forecast: < $175 M1 < (1) Amount is subject to change depending on business and/or economic conditions. 18
Slide 19: Net Debt Reconciliation - Q2 2024
NET DEBT1 RECONCILIATION - Q2 2024 (M CAN$) Q1 2024 Q2 2024 $527 million LTM EBITDA (A) 1 $498 million 3.8x Net debt / LTM EBITDA (A) ratio1 4.2x Higher leverage reflects lower consolidated profitability levels, and higher working capital requirements, dividends, payments for PPE and new right of us
Slide 20: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / EBITDA (A)1,3 Interest Coverage Ratio2,3 Net Debt / Net Debt + Total Equity1 Long-Term Debt Maturities (as of June 30, 2024) Leases - Subsidiaries Subsidiaries debts Revolving credit facility Unsecured senior notes Without recourse - Leases
Slide 21: Near Term Factors
NEAR TERM FACTORS Q3 2024 EBITDA (A)1 TREND vs. Q2 2024 (*Assumes current index prices) • Stronger expected Containerboard performance expected to offset CONSOLIDATED softer Tissue Papers results Containerboard • Higher selling prices, good volume & lower operational costs following important shut d
Slide 22: Appendix
APPENDIX 22
Slide 23: Summary of Quarterly Financial Results & KPIs
SUMMARY OF QUARTERLY FINANCIAL RESULTS & KPIs 2022 2023 2024 (In millions of CAN$, except per common share amounts, where noted) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 YTD3 LTM4 Financial Results Sales 1,038 1,119 1,174 1,135 4,466 1,134 1,168 1,198 1,138 4,638 1,109 1,180 2,289 4,625 Operating inc
Slide 24: Year-over-Year Sales Reconciliation
YEAR-OVER-YEAR SALES RECONCILIATION +1% (M CAN$) Recovery & Sales Recycling & Sales (M CAN$) Q2 2023 Mix F/X CAN$ Other items Volume Price Q2 2024 Containerboard 562 2 7 — 24 (10) 585 Specialty Products 164 — 2 — (1) 2 167 Tissue Papers 416 28 5 — (35) (17) 397 Corporate, Recovery and Recycling acti
Slide 25: Year-over-Year EBITDA (A) Reconciliation
YEAR-OVER-YEAR EBITDA (A)1 RECONCILIATION + Lower production costs - Higher Corporate activities costs + Lower production costs (Closures) - Higher raw material costs partly offset by higher selling price + Higher results from Recovery operations + Lower raw material, logistics and energy costs - Lo
Slide 26: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) +6% Recovery & Sales Recycling & Sales (M CAN$) Q1 2024 Volume F/X CAN$ Price Mix Other items Q2 2024 Containerboard 556 4 6 13 6 — 585 Specialty Products 160 4 2 1 — — 167 Tissue Papers 367 26 4 (2) 2 — 397 Corporate, Recovery and Recycling activities & Elim
Slide 27: Sequential EBITDA (A) Reconciliation
SEQUENTIAL EBITDA (A)1 RECONCILIATION + Higher selling prices, lower freight and energy costs + Higher costs volume and lower freight + Higher volume + Favourable volume mix and higher - Lower selling prices and higher raw material costs - Higher raw material costs partly offset by higher selling pr
Slide 28: Cost of Sales, Selling and Administrative Expenses
COST OF SALES, SELLING AND ADMINISTRATIVE EXPENSES (In millions of Canadian dollars) Q2 2024 Q1 2024 Q2 2023 Cost of sales Raw materials 431 377 396 Wages and benefits 198 194 194 Energy 51 54 58 Delivery 133 138 131 Other 161 162 162 Depreciation and amortization 69 67 68 1,043 992 1,009 Selling an
Slide 29: Selected Reference Prices
SELECTED REFERENCE PRICESCurrent Current Containerboard - Selected Products (US$/s.t.) Specialty Products - Selected Products (July-24) (US$/s.t.) (July-24) 905 1,050 795 Tissue Papers - Selected Products Current (US$/s.t.) (June-24) 1,556 1,185 Source: RISI 29
Slide 30: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q2 2024 vs Q2 2024 vs. 2022 2023 2024 Q2 2023 Q1 2024 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) (%) Se
Slide 31: For More Information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investor@cascades.com