Cascades Inc. · TSX:CAS
Cascades — Shareholder Meeting (2019)
58 slides from Cascades's shareholder meeting presentation, 2019
Slide 1: Cascades
(|e Cascades
Slide 2: 2019 Annual General Meeting of Shareholders
CREATING NEW POSSIBILITIES 2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Slide 3: Disclaimer
DISCLAIMER FORWARD-LOOKING STATEMENT RECONCILIATION OF NON-IFRS MEASURES Certain statements in this presentation, including statements regarding future results and performance, are To provide more information for evaluating the Corporation's performance, the financial information included forward-lo
Slide 4: Alain Lemaire, Executive Chairman
ALAIN LEMAIRE Executive Chairman of the Board of Directors
Slide 5: Cascades
Cascades
Slide 6: Board of Directors
BOARD OF DIRECTORS Alain Louis Sylvie David Georges Élise Lemaire Garneau Lemaire McAusland Kobrynsky Pelletier Sylvie Laurence Mario Michelle Martin Patrick Vachon Sellyn Plourde Cormier Couture Lemaire
Slide 7: David McAusland
TEER REES VIAL TUAW VAI THANK YA THANK YO [HANK YU INKINN TU PEEFREWEL FV DAVID
Slide 8: Opening of the 2019 Annual General Meeting
2 Opening of the 2019 Annual General Meeting
Slide 9: Confirmation of the Mailing of the Notice of Meeting
3 Confirmation of the Mailing of the Notice of Meeting, Management Proxy Circular and Proxy Form
Slide 10: Report of the Scrutineers
Report of the Scrutineers we} Cascades
Slide 11: Filing of the Consolidated Financial Statements for 2018
5 Filing of the Consolidated Financial Statements for the year ended December 31, 2018 and the Independent Auditor’s Report
Slide 12: Election of Directors
Election of Directors we} Cascades
Slide 13: Election of Directors
6 Election of Directors Alain Louis Sylvie Georges Élise Sylvie Lemaire Garneau Lemaire Kobrynsky Pelletier Vachon Laurence Mario Michelle Martin Patrick Hubert Sellyn Plourde Cormier Couture Lemaire T. Lacroix
Slide 14: Appointment of the Independent Auditor
7 Appointment of the Independent Auditor PricewaterhouseCoopers LLP Société de comptables professionels agréés / Partnership of chartered professional accountants
Slide 15: Advisory Vote on Executive Compensation
8 Advisory Vote on Executive Compensation Accepting the Corporation’s Approach to Executive Compensation
Slide 16: Shareholder Proposal regarding Directors Independence
9 Shareholder Proposal regarding Directors Independence
Slide 17: Shareholder Proposal on ESG Criteria in Executive Compensation
10 Shareholder Proposal for Integrating Environmental, Social and Governance Criteria into Executive Compensation
Slide 18: Shareholder Proposal regarding the Adoption of a Diversity Policy
11 Shareholder Proposal regarding the Adoption of a Diversity Policy
Slide 19: 2018 Highlights
MARIO PLOURDE President and Chief Executive Officer 2018 HIGHLIGHTS
Slide 20: 2018 Review
2018 REVIEW 1 ( OIBD2: $474 M1 21.5% compared to 2017) Sales: $4,649 M 85% ( 8% compared to 2017) 18% 8% Containerboard (11%) Packaging 14% 20% Boxboard Europe Adjusted OIBD2: $489 M ( 24.4% compared to 2017) Specialty 73% 28% Packaging 17% 38% 7% Tissue Papers 3% % before inter-segment sales and co
Slide 21: Investments
INVESTMENTS Containerboard Investments $29 M Packaging in Property, Plant & Equipment, Business Boxboard Europe $88 M Systems1 ($429 M) and Business $243 M Acquisitions ($125 M) Specialty Products Tissue Papers $91 M $554 M Corporate & IT $103 M (1) Including capitalization of IT projects and value
Slide 22: Strategic Moves
STRATEGIC MOVES ✓Containerboard Bear Island project in Virginia
Slide 23: Strategic Moves
STRATEGIC MOVES ✓Ramp-up of new Piscataway, NJ converting plant ahead of schedule
Slide 24: Strategic Moves
STRATEGIC MOVES ✓Modernization and capacity increase at the Wagram, NC tissue facility
Slide 25: Strategic Moves
STRATEGIC MOVES ✓Acquisition of Barcelona Cartonboard in Europe
Slide 26: Strategic Moves
STRATEGIC MOVES ✓Acquisition of US moulded pulp assets
Slide 27: Containerboard Packaging
CONTAINERBOARD PACKAGING + 11% Sales ($M) ✓ Strong industry fundamentals 1,840 ✓ Significant decrease in raw material pricing ✓ Higher average selling prices for both liner 1,652 and medium 247 Adjusted OIBD1 ($M) 410 15% of 22% of sales sales 2017 2018 (1) Please click here for supplemental informa
Slide 28: Boxboard Europe
BOXBOARD EUROPE + 11% Sales ($M) ✓ Stable economic environment in Europe 933 ✓ Important decrease in raw material prices 838 ✓ Benefits from acquisitions: • PAC Service – December 2017 68 Adjusted OIBD1 ($M) 97 • Barcelona Cartonboard – October 2018 8% of 10% of sales ✓ Favourable CAN$ - euro exchan
Slide 29: Specialty Products (Excl. JV)
SPECIALTY PRODUCTS (EXCL. JV) - 6% ✓ Acquisition of U.S. moulded pulp assets Sales ($M) in December 2018 doubling production 703 659 capacity of ecological packaging manufactured in moulded pulp ✓ Results impacted by weaker performance in the Recovery & Recycling operations as a result of the 67 Adj
Slide 30: Tissue Papers
TISSUE PAPERS + 7% Sales ($M) ✓ Sales growth driven by higher shipments, 1,352 improved volumes and a higher average 1,268 selling price ✓ Profitability significantly impacted by higher raw material prices, and increases in logistics and energy costs 94 Adjusted OIBD1 ($M) 17 ✓ Operational difficult
Slide 31: Fibre Costs: Recovered Papers
FIBRE COSTS: RECOVERED PAPERS + 14% Old Corrugated Containers (OCC) - 5% (US $/s.t.) ✓ Very favourable OCC pricing for mills: - 18% 200 - 46% - 46% in 2018 - 18% in Q1/19 150 Sorted office papers (SOP) 193 183 ✓ Higher prices in 2018: 100 169 + 14% in 2018 138 50 - 5% in Q1/19 74 61 0 2017 2018 Q1 2
Slide 32: Fibre Costs: Virgin Pulp
FIBRE COSTS: + 3% VIRGIN PULP + 21% (US $/s.t.) + 2% 1,400 + 20% ✓ Higher global demand for pulp driven by industry downtime, and China’s wastepaper 1,300 1,380 ban and efforts to reduce pollutants 1,200 1,342 1,100 1,180 ✓ NBHK & NBSK pulp prices + 20% and 1,152 1,000 1,105 + 21% year-over-year in
Slide 33: Financial Review
ALLAN HOGG Vice-President and Chief Financial Officer FINANCIAL REVIEW
Slide 34: Sales
SALES 2017 2018 Containerboard Packaging + 11% ($M) + 8% 5,000 Boxboard Europe + 11% 4,500 4,649 Specialty Products - 6% 4,321 4,000 Tissue Papers + 7% 3,500 2017 2018
Slide 35: Operating Income and Adjusted OIBD
OPERATING INCOME AND AND ADJUSTED OIBD 1 2 (in millions of CAN$) 2018 Margin 5% $230 M Operating Income1 + 31% 2017 Margin 4% $175 M 2018 Margin 10.5% $489 M Adjusted OIBD2 + 24% 2017 Margin 9.1% $393 M (1) 2018 fourth quarter results have been adjusted to reflect retrospective adjustments of purcha
Slide 36: Operating Income and Adjusted OIBD (Cont'd)
OPERATING INCOME AND ADJUSTED OIBD (CONT’D) 1 2 (in millions of CAN$) 410 Containerboard Packaging 381 97 Boxboard Europe 60 Adjusted OIBD 2 1 40 Specialty Products 24 Operating Income 17 Tissue Papers -122 (1) 2018 fourth quarter results have been adjusted to reflect retrospective adjustments of pu
Slide 37: Operating Income Variance
OPERATING INCOME1 VARIANCE (in millions of CAN$) + $55M + $96M 1 2 2 1 (1) 2018 fourth quarter results have been adjusted to reflect retrospective adjustments of purchase price allocation. Please refer to Note 5 of the 2019 first quarter unaudited condensed interim consolidated financial statements
Slide 38: Earnings Per Share
EARNINGS PER SHARE1 $M PER SHARE 2018 Adjusted Net Earnings2 79 $ 0.83 1 Gain on acquisitions, disposals and others 71 $ 0.55 Impairment charges (Tissue Papers) (75) ($ 0.60) Tax effect3 (7) ($ 0.08) Other (9) ($ 0.08) 1 2018 Net Earnings 59 $ 0.62 (1) 2018 fourth quarter results have been adjusted
Slide 39: Net Debt Evolution in 2018
NET DEBT1 EVOLUTION IN 2018 (in millions of CAN$) + 16% + $247M (1) Please click here for supplemental information on non-IFRS measures.
Slide 40: Net Debt / Adjusted OIBD Ratio
NET DEBT / ADJUSTED OIBD1 RATIO Targeting net debt / adjusted OIBD ratio of 2.5x (1) Please click here for supplemental information on non-IFRS measures. (2) Pro-forma basis to include 2017 business combinations on a LTM basis. (3) Based on external adjusted OIBD forecasts of $510 M for 2019 and $52
Slide 41: Debt Maturities
DEBT MATURITIES ($M) ✓ Authorized credit facility increased to incorporate US$175 M 7-year term-loan ✓ Weighted average interest rate of 5.20% 631 457 231 273 239 55 1 year > 1 year 2021 2022 2023 2025 Senior notes Revolver Term loan Debts without recourse Subsidiaries debts As at December 31, 2018
Slide 42: Q1 2019 Results
Q1 2019 RESULTS Q1 2019 Q4 20182 Q1 2018 Sales 1,230 1,196 1,098 Operating income (loss) 72 (37) 112 Adjusted OIBD1 135 113 105 Net earnings (loss) 24 (68) 61 Adjusted net earnings1 13 - 12 Net earnings (loss) per share $0.26 ($0.72) $0.65 Adjusted net earnings per share1 $0.14 - $0.13 (1) Please cl
Slide 43: Operating Income Variance Q1 2019
OPERATING INCOME VARIANCE Q1 2019 - $40M + $30M (1) Please click here for supplemental information on non-IFRS measures.
Slide 44: Net Debt Evolution Q1 2019
NET DEBT1 EVOLUTION Q1 2019 Net Debt / Adjusted OIBD1 ratio of 3.4x (1) Please click here for supplemental information on non-IFRS measures.
Slide 45: Conclusion
ARRA RFI! NDDADTIIAI APPNATIIN )PPORTUN UFTURIUN Wht WELEWitl
Slide 46: Update on Strategic Plan
UPDATE ON STRATEGIC PLAN MODERNIZE CREATE INNOVATION & OUR SUSTAINABLE CUSTOMER PLATFORMS VALUE FOCUS ✓ Upgrade asset base with ✓ Strategic investments that ✓ Multi-disciplinary state-of-the-art equipment will strengthen & consolidate approach & organic growth positioning ✓ Developing new market ✓ I
Slide 47: Update on Strategic Plan
UPDATE ON STRATEGIC PLAN Modernizing our platforms through a strategic combination of: Equipment upgrades + Strategic acquisitions + Greenfield construction + Conversion projects $243 $110 - $125 $110 - $135 $88 $103 $91 $35 - $45 $35 - $45 $40 - $50 $29 Containerboard Tissue Papers Boxboard Europe
Slide 48: Update on Strategic Plan
UPDATE ON STRATEGIC PLAN Focused on Long-Term Value Creation Committed to Strategic Shareholder Investment Value
Slide 49: Update on Strategic Plan
UPDATE ON STRATEGIC PLAN Innovation Customers 37 Cascaders 275 employees dedicated to innovation using a focused on providing multi-disciplinary approach engineering & consulting focused on key strategic areas services internally, to major customers & external clients - Food & beverage - Hygiene sol
Slide 50: Update on Strategic Plan: Innovation
UPDATE ON STRATEGIC PLAN: INNOVATION
Slide 51: Update on Strategic Plan: Innovation
UPDATE ON STRATEGIC PLAN: INNOVATION
Slide 52: Update on Strategic Plan: Innovation
UPDATE ON STRATEGIC PLAN: INNOVATION
Slide 53: Thank You!
ARRA RFI! NDDADTIIAI APPNATIIN )PPORTUN UFTURIUN Wht WELEWitl
Slide 54: Alain Lemaire
ALAIN LEMAIRE Executive Chairman of the Board of Directors
Slide 55: Question Period
Question Period we} Cascades
Slide 56: Closing of the Meeting
Closing of the Meeting we} Cascades
Slide 57: Thank You!
2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS THANK YOU!
Slide 58: Cascades
(|e Cascades