Slide 1: Q4 2022 Financial Results
Q4 2022 FINANCIAL RESULTS February 23, 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 Variation Quarter-over-Quarter Year-over-Year 2022 vs 2021 (in millions of Canadian dollars) Q4 2022 vs Q3 2022 Q4 2022 vs Q4 2021 Pricing $1 million $117 million $467 million Freight & Production Costs $(6) million $(37) millio
Slide 4: Summary of Quarterly Financial Results & KPIs
SUMMARY OF QUARTERLY FINANCIAL RESULTS & KPIs 2020 2021 2022 (In millions of CAN$, except per common share amounts, where noted) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Financial Results Sales 4,105 942 956 1,030 1,028 3,956 1,038 1,119 1,174 1,135 4,466 Operating income (loss) 292 44 23 73 (90) 50 (
Slide 5: Recycled Fibre Costs - Index List Prices
RECYCLED FIBRE COSTS - INDEX LIST PRICES ($ US/s.t.) Current OCC: 300 (Feb-23) • High seasonal material generation combined with low 275 export activities and extended downtime taken in the 250 234 containerboard industry meant supply outpaced demand 225 200 • Solid inventories at our mills 175 • Lo
Slide 6: Virgin Fibre Costs - Index List Prices
VIRGIN FIBRE COSTS - INDEX LIST PRICES ($ US/s.t.) VIRGIN PULP: Current (Feb-23) • Slight improvement in market dynamics sequentially, 1,800 but prices significantly higher YoY 1,675 1,600 • Improving transportation conditions, more steady 1,540 domestic production levels, new capacity coming in to
Slide 7: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Comments on sequential performance Results Change vs. Q4 2022 Q3 2022 Q4 2021 è Total shipments decreased by 7% sequentially. Shipments of parent rolls decreased by 13% and those of converted products decreased by 1% compared to the third quarter. The sequential S
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Quarterly EBITDA (A)1 (M CAN$) è Sequential Q4 shipments of converted products: Canada -1.0% (vs. market -2.7%); US +4.0% (vs. market -4.5%) 14% 15% 17% 17% 21% è Year-over-year Q4 shipments of converted products: 119 Canada -2.8% (vs. market -4.7%); US +6.0% (vs.
Slide 9: Packaging Products / Containerboard - Bear Island
PACKAGING PRODUCTS / CONTAINERBOARD - BEAR ISLAND (in millions of Canadian dollars unless otherwise specified) PROJECT COST US $515 M - $525 M (CAN $675 M - $690 M) INVESTMENT TO DATE (2018 - 2022) US $396 M (CAN $512 M) 2023 INVESTMENTS US ~$120 M - $130 M (CAN $175 M) START-UP End of March 2023 Pr
Slide 10: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q4 2022 Q3 2022 Q4 2021 Sales (M$) è Sales decreased by 4% sequentially. Price and mix were favorable and the 161 (4)% 7% depreciation of the Canadian dollar contributed positively to sales. These benefits
Slide 11: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Quarterly EBITDA (A)1 (M CAN$) 1 è Q4 2022 EBITDA (A) of $20 M, or 12% on a margin basis, was 14% 12% 14% 14% 15% 15% 12% lower sequentially and fairly stable versus the prior-year. 25 25 21 22 20 è Industrial packaging: results decreased sequentially reflecti
Slide 12: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q4 2022 Q3 2022 Q4 2021 è Shipments decreased by 8% on a sequential basis in the fourth quarter. This reflects Shipments ('000 s.t.) a 5% decrease in shipments of converted products and lower external shipments of 123 (8)% (15)% par
Slide 13: Tissue Papers
TISSUE PAPERS Quarterly EBITDA (A)1 (M CAN$) è Slower demand levels for Away-from-Home tissue products (shipments -6% YoY, -9% QoQ), and Retail tissue products (shipments -1% YoY, -3% QoQ). (2)% (2)% 1% 2% (5)% è Significant cost inflation in raw materials, chemicals, energy and 8 production supplie
Slide 14: Tissue Papers - Annual 2022 EBITDA (A) Waterfall
TISSUE PAPERS - ANNUAL 2022 EBITDA (A)1 WATERFALL (M CAN$) 200 19 118 150 60 - 80 (6) (32) 100 (~65) (42) 50 27 0 ~10 (97) (13) -50 2021 1 Price Volume/Mix Fx Production Freight/Energy Raw 2022 1 EBITDA (A) Costs Material EBITDA (A) è $137 million of benefits successfully realized within the 2022 ca
Slide 15: Q4 2022 EBITDA (A) to Operating Income (Loss) Reconciliation
Q4 2022 EBITDA (A)1 TO OPERATING INCOME (LOSS) RECONCILIATION (M CAN$) 160 116 120 80 10 4 40 (2) (62) 0 (86) (20) -40 1 EBITDA (A) Depr. & Gain on acq., Unrealized gain Restructuring Impairment Operating Amort. disp. and others on financial costs charges loss instruments Container- Specialty Tissue
Slide 16: Net Earnings (Loss) - As Reported vs Adjusted
NET EARNINGS (LOSS) - As reported VS ADJUSTED2 NET EARNINGS NET EARNINGS (NET LOSS) (NET LOSS) PER COMMON SHARE1 (In millions of Canadian dollars, except per common share amounts) Q4 2022 Q4 2022 As reported (27) ($0.27) Specific items: Impairment charges 86 $0.64 Gain on acquisitions, disposals and
Slide 17: Quarterly Year-over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2 1.04 1.00 0.75 0.50 $ cents 0.40 0.25 0.22 (0.01) (0.02) (0.02) (0.04) 0.00 (1.13) (0.09) -0.25 (0.49) (0.27) EPS reported Specific Adjusted EPS EBITDA (A) 2 Financing Share of Depreciation Non- Adjusted EPS Specific EPS reported 2 2 Q4 2021 items Q4
Slide 18: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 0.40 0.04 0.04 0.22 0.22 0.20 (0.01) (0.01) 0.20 (0.02) (0.02) $ cents 0.00 (0.02) -0.20 (0.49) (0.27) EPS reported Specific Adjusted EPS EBITDA (A) 2 Depreciation Share of Financing Non- Income Adjusted EPS Specific EPS reported 2 Q3 2022 items Q3 2022
Slide 19: Cash Flow Overview
CASH FLOW OVERVIEW 2020 2021 2022 (In millions of CAN$, except per common share amounts) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Cash flow from operations 458 82 87 58 20 247 19 81 60 100 260 Specific items1 15 4 2 12 31 49 7 — 2 3 12 Adjusted cash flow from operations2 473 86 89 70 51 296 26 81 62 1
Slide 20: New Capital Investments
NEW CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding new leases, disposal of assets and accounts payable variation) 532 36 2023F CAPEX: 41 ~ 29 $325 M1 incl.~ CAN$175M for Bear Island 312 330 26 27 50 81 227 213 37 39 22 426 169 20 24 85 104 61 217 184 22 22 18 62 66 84 2017 2018 2019
Slide 21: Net Debt Reconciliation - Q4 2022
NET DEBT1 RECONCILIATION - Q4 2022 (M CAN$) 2,011 2,000 160 1,966 1,900 (100) 18 1,800 16 (96) 2 (34) (11) Net debt as of Cash flow Changes in non- F/X CAN$ Proceeds from Investments Dividends paid & Right-of-use Payments for Net debt as of September 30, from oper. cash disposals of and others chang
Slide 22: Net Debt Reconciliation - 2022
NET DEBT1 RECONCILIATION - 2022 (M CAN$) 501 1,966 2,000 1,500 116 1,351 111 87 72 7 1,000 (260) (19) Net debt as of Cash flow Proceeds from Investments Dividends paid & Right-of-use F/X CAN$ Changes in non- Payments for Net debt as of December 31, from oper. disposals of and others change in capita
Slide 23: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / EBITDA (A)1,3 Interest Coverage Ratio2,3 6.7x 5.8x 6.0x 5.2x 4.6x 4.7x 4.7x 4.6x 4.3x 4.6x 4.9x 4.0x 3.8x 3.6x 3.5x 3.5x 3.25x 3.4x 3.4x 2.5x 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 24: Near Term Factors
NEAR TERM FACTORS • Containerboard: Net of $5 million partial insurance settlement in vs Q4 2022 vs Q1 2022 Q1 20231 Q4 2022, sequential performance forecast to benefit from low average raw material prices, offset by slightly softer volume, lower EBITDA (A) selling price and elevated operational cos
Slide 25: Appendix
APPENDIX 25
Slide 26: Year-over-Year Sales Reconciliation
YEAR-OVER-YEAR SALES RECONCILIATION (M CAN$) +10% 1,300 22 54 1,200 117 (13) 1,135 1,100 (73) 1,028 1,000 Recovery & Sales Recycling & Sales (M CAN$) Q4 2021 Price F/X CAN$ Mix Other items Volume Q4 2022 Containerboard 502 42 27 2 — (6) 567 Specialty Products 151 20 8 — — (18) 161 Tissue Papers 339
Slide 27: Year-over-Year EBITDA (A) Reconciliation
YEAR-OVER-YEAR EBITDA (A)1 RECONCILIATION + Higher selling prices + Higher realized spreads, favourable FX - Less favourable volume/mix and FX - Higher production, energy, and logistics costs + Higher selling prices, more favourable FX - Lower volumes + Lower raw material costs - Higher raw material
Slide 28: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) -3% 1,250 23 7 1 28 1,200 (13) 1,174 1,150 1,135 (85) 1,100 Sales Recovery & Sales (M CAN$) Q3 2022 F/X CAN$ Mix Other Price Recycling Volume Q4 2022 Containerboard 595 14 19 — (19) — (42) 567 Specialty Products 168 4 — — 3 — (14) 161 Tissue Papers 382 10 4 —
Slide 29: Sequential EBITDA (A) Reconciliation
SEQUENTIAL EBITDA (A)1 RECONCILIATION + Lower raw material and transportation costs + Better realized spreads, more favourable FX + Favourable FX and lower operating costs - Lower volume - Lower selling price - Net impact of lower volume, offset by beneficial sales mix - Higher labour, transportatio
Slide 30: Selected Reference Prices
SELECTED REFERENCE PRICES Current Current Containerboard - Selected Products (US$/s.t.) Specialty Products - Selected Products (Feb-23) (US$/s.t.) (Feb-23) 1,000 1,200 1,100 900 865 1,000 1,040 800 900 765 800 700 700 600 600 May 19 Nov-22 Aug-20 Nov-21 Aug-19 Feb-23 Nov-20 Aug 18 Feb-22 Nov-19 Feb-
Slide 31: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q4 2022 2020 2021 2022 2022 vs. 2021 vs.Q3 2022 These indexes should only be used as an indicator of trends and they may be different than our actual selling prices or purchasing costs. Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year (units) (%) (units) (%) Selling P
Slide 32: For more information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investor@cascades.com