Slide 1: Q2 2023 Financial Results
Q2 2023 FINANCIAL RESULTS August 3, 2023
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: Overview of Consolidated Profitability Drivers
OVERVIEW OF CONSOLIDATED PROFITABILITY DRIVERS Consolidated EBITDA (A)1 Quarter-over- Year-to-Date Year-over-Year Variation Quarter 2023 vs 2022 Q2 2023 vs Q2 2022 (in millions of Canadian dollars) Q2 2023 vs Q1 2023 (six months) Pricing ($24 million) $18 million $93 million Freight & Production Cos
Slide 4: Summary of Quarterly Financial Results & KPIs
SUMMARY OF QUARTERLY FINANCIAL RESULTS & KPIs 2021 2022 2023 (In millions of CAN$, except per common share amounts, where noted) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 YTD4 LTM5 Financial Results Sales 942 956 1,030 1,028 3,956 1,038 1,119 1,174 1,135 4,466 1,134 1,168 2,302 4,611 Operating income
Slide 5: Recycled Fibre Costs - Index List Prices
RECYCLED FIBRE COSTS - INDEX LIST PRICES ($ US/s.t.) Current OCC: (July-23) • Stable market with ongoing softer export activity and favourable seasonal generation • Good inventories at our mills, logistics continued to ease • Marginal upward index price adjustment in the quarter will 160 support mor
Slide 6: Virgin Pulp Costs - Index List Prices
VIRGIN PULP COSTS - INDEX LIST PRICES ($ US/metric ton) Current VIRGIN PULP: (July-23) • Sequential improvement with rapid price decreases, and index prices also lower YoY • Continued lower demand from Asia, normalized logistics, weak European market, new production 1,340 capacity and highest invent
Slide 7: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Comments on sequential performance Results Change vs. Q2 2023 Q1 2023 Q2 2022 è Total shipments increased by 4% sequentially. Shipments of parent rolls increased by 1% and those of converted products increased by 7% compared to the first quarter. The sequential in
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Quarterly EBITDA (A)1 (M CAN$) è Sequential Q2 shipments of converted products: Canada +5.5% (vs. market +2.7%); US +13.8% (vs. market +1.2%) è Year-over-year Q2 shipments of converted products: Canada -0.6% (vs. market -2.8%); US +9.6% (vs. market -7.9%) è Contin
Slide 9: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q2 2023 Q1 2023 Q2 2022 Sales (M$) è Sales increased by 2% sequentially. Higher volume in our Cardboard and Plastics 164 2% (2)% sub-segments were partially offset by a lower average selling price in all of
Slide 10: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Quarterly EBITDA (A)1 (M CAN$) è Q2 2023 EBITDA (A)1 of $24 M, or 15% on a margin basis, was lower sequentially and stable year-over-year. è Cardboard: results decreased sequentially reflecting lower selling prices, higher raw material costs, and a less favour
Slide 11: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q2 2023 Q1 2023 Q2 2022 è Shipments increased by 8% on a sequential basis. This reflects the combined impact of a Shipments (’000 s.t.) 7% increase in shipments of converted products, and higher external shipments of parent 134 8% 1
Slide 12: Tissue Papers
TISSUE PAPERS Quarterly EBITDA (A)1 (M CAN$) è Good demand for Retail tissue products (shipments +8% YoY, +2% QoQ), while demand levels for Away-from-Home tissue products improved sequentially but were below last year (shipments -6% YoY, +15% QoQ). è Prices of raw material costs have eased sequentia
Slide 13: Q2 2023 EBITDA (A) to Operating Income Reconciliation
Q2 2023 EBITDA (A)1 TO OPERATING INCOME RECONCILIATION (M CAN$) 1 Corporate, Container- Specialty Tissue Recovery and Recycling (M CAN$) board Products Papers activities Total Operating income (loss) 62 19 18 (35) 64 Depreciation and amortization 34 5 18 11 68 Impairment charges — — 2 — 2 Restructur
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 2023 Q2 2023 As reported 22 $0.22 Specific items: Impairment charges 2 $0.02 Restructuring costs 6 $0.04 Unrealized loss on financial instruments
Slide 15: Quarterly Year-Over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2 2 2 2 (1) After-tax variance normalized at 26% tax rate, except for Income tax variance column. (2) Please click here for supplemental information on non-IFRS measures and other financial measures available on pages 26 to 31 of our 2023 Quarterly Rep
Slide 16: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 2 2 2 (1) After-tax variance normalized at 26% tax rate, except for Income tax variance column. (2) Please click here for supplemental information on non-IFRS measures and other financial measures available on pages 26 to 31 of our 2023 Quarterly Report
Slide 17: Cash Flow Overview
CASH FLOW OVERVIEW 2021 2022 2023 (In millions of CAN$, except per common share amounts) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 YTD4 LTM5 Cash flow from operations 82 87 58 20 247 19 81 60 100 260 89 117 206 366 Specific items1 4 2 12 31 49 7 — 2 3 12 1 5 6 11 Adjusted cash flow from operations2 86
Slide 18: New Capital Investments
NEW CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding new leases, disposal of assets and accounts payable variation) 2023F CAPEX: ~$325 M1 12 9 16 (1) Amount is subject to change depending on business and/or economic conditions. 18
Slide 19: Net Debt Reconciliation - Q2 2023
NET DEBT1 RECONCILIATION - Q2 2023 (M CAN$) 1 1 Q1 2023 Q2 2023 1 $452 million LTM EBITDA (A) $502 million 4.6x Net debt / LTM EBITDA (A) ratio1 4.1x Lower leverage reflects stronger cash flow from operations, favourable exchange rate, offset by working capital requirements and investments for Bear
Slide 20: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / EBITDA (A)1,3 Interest Coverage Ratio2,3 Net Debt / Net Debt + Total Equity1 Long-Term Debt Maturities (as of June 30, 2023) Revolving credit Unsecured senior notes facility Term loan Leases - Subsidiaries Without recourse - Debts without re
Slide 21: Near Term Factors
NEAR TERM FACTORS • Containerboard: Sequential performance forecast to be stable, reflecting ramp-up of Bear Island, slightly higher average raw vs Q2 2023 vs Q3 2022 material prices, lower selling prices and softer volume; Expect Q3 2023 slightly softer YoY results with benefits of lower raw materi
Slide 22: Appendix
APPENDIX 22
Slide 23: Year-Over-Year Sales Reconciliation
YEAR-OVER-YEAR SALES RECONCILIATION +4% (M CAN$) Recovery & Sales Recycling & Sales (M CAN$) Q2 2022 F/X CAN$ Price Volume Mix Other items Q2 2023 Containerboard 569 17 (43) 29 (10) — 562 Specialty Products 168 5 5 (14) — — 164 Tissue Papers 342 14 56 1 3 — 416 Corporate, Recovery and Recycling acti
Slide 24: Year-Over-Year EBITDA Reconciliation
YEAR-OVER-YEAR EBITDA (A)1 RECONCILIATION + Higher realized spreads, favourable FX + Higher costs selling prices and lower logistics + Lower cost from Corporate activities - Higher production costs - Lower results from Recovery operations - Lower volumes + Favourable volume/mix + Lower raw material
Slide 25: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) +3% Recovery & Sales Recycling & Sales (M CAN$) Q1 2023 Volume Mix Other items F/X CAN$ Price Q2 2023 Containerboard 561 21 6 — (2) (24) 562 Specialty Products 161 7 — — (1) (3) 164 Tissue Papers 387 29 (1) — (2) 3 416 Corporate, Recovery and Recycling activi
Slide 26: Sequential EBITDA Reconciliation
SEQUENTIAL EBITDA (A)1 RECONCILIATION - Higher raw material costs - Lower realized spreads + Higher volume - Higher operating costs, including Bear Island start-up, insurance settlement in Q1 - Lower selling prices + Lower costs from Corporate activities and Recovery operations + Higher volume and f
Slide 27: Cost of Sales and Selling and Administrative Expenses
COST OF SALES SELLING AND ADMINISTRATIVE EXPENSES (In millions of Canadian dollars) Q2 2023 Q1 2023 Q2 2022 Cost of sales Raw materials 396 365 393 Wages and benefits 194 193 176 Energy 58 63 59 Delivery 131 135 149 Other 162 155 158 Depreciation and amortization 68 62 63 1,009 973 998 Selling and a
Slide 28: Selected Reference Prices
SELECTED REFERENCE PRICESCurrent Current Containerboard - Selected Products (US$/s.t.) Specialty Products - Selected Products (July-23) (US$/s.t.) (July-23) 1,040 845 715 Tissue Papers - Selected Products Current (US$/s.t.) (June-23) 1,447 1,217 Source: RISI 28
Slide 29: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q2 2023 vs. Q2 2023 vs. 2021 2022 2023 Q2 2022 Q1 2023 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) (%) S
Slide 30: For More Information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investor@cascades.com