Slide 1: Q4 2020 Financial Results
Q4 2020 FINANCIAL RESULTS February 25, 2021
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 Quarterly Financial Results
SUMMARY OF QUARTERLY FINANCIAL RESULTS 161 186 162 166 152 73 94 109 54 58 49 48 42 90 73 29 22 39 (1) (26) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 1 Operating Income (loss) Adjusted OIBD Net Earnings (loss) Adjusted Net Earnings 1 Figures above in millions of
Slide 4: Historical Segmented Quarterly Operating Income (Loss) & Adjusted OIBD
HISTORICAL SEGMENTED QUARTERLY OPERATING INCOME (LOSS) & ADJUSTED OIBD1 Containerboard (millions of CAN$) Boxboard Europe (millions of CAN$) 43 122 110 24 30 30 29 27 106 99 94 100 20 19 69 74 71 5 54 (6) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 1 1 Operating I
Slide 5: Historical Segmented Quarterly Shipments
HISTORICAL SEGMENTED QUARTERLY SHIPMENTS Containerboard ('000 s.t. and % capacity utilization1) Boxboard Europe ('000 s.t. and % capacity utilization1) 351 326 411 305 316 312 399 101% 365 374 360 94% 98% 98% 97% 91% 90% 88% 92% 92% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3
Slide 6: Raw Material Costs - Index List Prices
RAW MATERIAL COSTS - INDEX LIST PRICES ($ US/t.c.) Recycled Fibre Prices Current ($ US/t.m.) Virgin Pulp Prices Current (Feb-21) (Feb-21) 250 1,500 225 1,400 200 1,300 1,300 175 150 1,200 125 1,100 100 101 1,000 1,020 75 68 900 50 25 800 0 700 Feb-20 Aug-20 Aug 18 May 19 Feb 18 Feb-20 Nov 16 Nov 16
Slide 7: Segmented Review
SEGMENTED REVIEW —T ert) Co
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Results Change vs. Comments on sequential performance Q4 2020 Q3 2020 Q4 2019 è Shipments decreased by 3% sequentially. This was driven by a 6% decrease in Shipments ('000 s.t.) manufacturing shipments that reflects a 1% lower capacity utilization rate and higher
Slide 9: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q4 2020 Q3 2020 Q4 2019 è Shipments increased 5% on a sequential basis in the fourth quarter. This was driven Shipments ('000 s.t.) by a 7% increase in shipments of converted products in all market segments, which is 152 5% (9)% lar
Slide 10: Packaging Products / Boxboard Europe
PACKAGING PRODUCTS / BOXBOARD EUROPE Results Change vs. Comments on sequential performance Q4 2020 Q3 2020 Q4 2019 è Shipments of virgin boxboard increased by 2,000 s.t., or 16%, in the fourth quarter of 2020 Shipments ('000 s.t.) compared to the prior quarter, while shipments of recycled boxboard d
Slide 11: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q4 2020 Q3 2020 Q4 2019 è Sales increased by 5% sequentially. This reflects stable sequential sales in the Industrial packaging sub-sector, and a 4% sequential increase in sales of moulded pulp products. Sa
Slide 12: Financial Review
FINANCIAL REVIEW je A AS fe Be Oe 7
Slide 13: Key Performance Indicators (KPIs)
KEY PERFORMANCE INDICATORS (KPIs) Total Shipments1 ('000 s.t.) Capacity Utilization Rate1-2 (manufacturing only) 906 853 872 863 837 90% 97% 92% 91% 92% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 LTM Return on Assets LTM Working Capital (% of LTM Sales) 12.3% 12.
Slide 14: Year Over Year Sales Reconciliation
YEAR OVER YEAR SALES RECONCILIATION (M CAN$) +5% 1,400 1,300 29 6 1,284 29 (7) 1,227 1,200 1,100 Sales Sales (M CAN$) Q4-2019 Volume Price & Mix F/X CAN$ Other variances Q4-2020 Containerboard 451 42 11 (4) — 500 Boxboard Europe 243 6 (10) 15 — 254 Specialty Products 105 17 1 — — 123 Tissue Papers 3
Slide 15: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) +1% 1,400 1,350 20 6 1,300 1,275 1,284 (2) 1,250 (15) 1,200 1,150 1,100 Sales Sales (M CAN$) Q3-2020 Price & Mix Volume Other variances F/X CAN$ Q4-2020 Containerboard 506 13 (14) — (5) 500 Boxboard Europe 261 (4) (3) — — 254 Specialty Products 117 2 6 — (2)
Slide 16: Year-Over-Year Operating Income Reconciliation
YEAR-OVER-YEAR OPERATING INCOME RECONCILIATION + Higher volumes in all sub-segments + Higher profitability from higher recycled fibre prices + Lower energy costs - Non-recurring Q4-20 incident cost, and higher - Higher raw material costs employee related claims & professional fees (M CAN$) 250 200 3
Slide 17: Sequential Operating Income Reconciliation
SEQUENTIAL OPERATING INCOME RECONCILIATION + Lower raw material costs - Non-recurring Q4-20 incident costs and higher + Lower repair and SG&A costs employee related claims - Lower volumes (M CAN$) 200 15 10 4 8 162 166 81 (1) (2) 150 (7) 109 100 + Lower raw material costs (72) 73 Higher average sell
Slide 18: Year to Date Operating Income Reconciliation
- YEAR TO DATE OPERATING INCOME RECONCILIATION + Higher average selling price and favourable mix of products sold + Higher volumes + Lower virgin and recycled fibre costs + Lower energy costs + Contribution from the Orchids acquisition - Lower average selling price + Lower operational costs - Higher
Slide 19: Margin Improvement Initiatives
MARGIN IMPROVEMENT INITIATIVES 5 PILLARS OBJECTIVES & RESULTS REVENUE MANAGEMENT OBJECTIVES → Targeting improvements in net selling → Increase adjusted OIBD margin by 1% in 2020, price, volumes, cost to serve and customer 2021 and 2022 from our 2019 reference base year & product mix PRODUCTION EFFIC
Slide 20: Q4-20 Adjusted OIBD to Operating Income Reconciliation
Q4-20 ADJUSTED OIBD TO OPERATING INCOME RECONCILIATION (M CAN$) 200 166 150 38 94 109 100 (13) (72) (8) (2) 50 0 Adjusted Depr. & Adjusted Gain on acq. Impairment Restructuring Unrealized Operating OIBD1 Amort. Operating and others charges costs loss Income Income 1 on financial instruments Containe
Slide 21: Net Earnings - IFRS vs Adjusted
NET EARNINGS - IFRS VS ADJUSTED NET EARNINGS NET EARNINGS PER SHARE1 (in millions of Canadian dollars, except amount per share) Q4-2020 Q4-2020 As per IFRS 73 $0.72 Specific items: Gain on acquisitions, disposals and others (38) ($0.34) Impairment charges 13 $0.09 Restructuring costs 8 $0.05 Unreali
Slide 22: Quarterly Year-Over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS 1,2 VARIANCE 0.80 0.30 0.72 0.60 0.04 0.01 0.01 0.42 0.10 — 0.40 0.57 0.30 (0.04) $ cents 0.20 0.00 -0.20 (0.27) -0.40 EPS Specific Adjusted OIBD Depreciation Financing Share of Non- Income Adjusted Specific EPS reported items EPS & expense & results of controll
Slide 23: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 0.80 Tax loss revaluation and prior year reassessment in Q3 0.30 0.72 0.60 0.06 — — 0.51 0.03 (0.01) 0.50 (0.01) 0.42 $ cents 0.40 (0.16) 0.20 0.00 EPS Specific Adjusted OIBD Depreciation Financing Share of Non- Income Adjusted Specific EPS reported item
Slide 24: Cash Flow Overview
CASH FLOW OVERVIEW 153 153 162 162 146 152 97 91 107 106 115 85 59 44 16 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 3 3 CF from oper. Adj. CF from oper. Adjusted Free Cash Flow Figures above in millions of CAN$ Figures above in millions of CAN$ 2018 2019 2020 (In
Slide 25: Net Debt Reconciliation - Q4 2020
NET DEBT1 RECONCILIATION - Q4 2020 (M CAN$) 2,100 2,000 1,982 1,900 1,800 (146) 1,700 39 1,679 (120) 27 13 15 1,600 (71) (60) 1,500 Net debt as at Cash flow Issuance of F/X CAN$ Changes in Investments Dividends paid Right-of-use Payments for Net debt as at September 30, from oper. common shares non-
Slide 26: Net Debt Reconciliation - 2020
NET DEBT1 RECONCILIATION - 2020 (M CAN$) 2,500 1,963 2,000 195 1,679 121 1,500 48 63 18 (567) (120) (22) (20) 1,000 500 0 Net debt as at Cash flow Issuance of F/X CAN$ Changes in Investments Dividends Right-of-use Purchase of Payments for Net debt as at December 31, from oper. common non-cash and ot
Slide 27: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / Adjusted OIBD1,3 Interest Coverage Ratio2,3 5.0x 4.6x 4.7x 6.4x 5.8x 6.0x 4.0x 3.8x 3.6x 3.5x 4.7x 4.6x 3.25x 4.3x 3.4x 3.4x 2.5x 3.0x 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Debt / Net D
Slide 28: Capital Investments
CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding value of leases) 2021F CAPEX: $450 - $475 M1 includes ~$250 M for Bear Island conversion 475 347 27 81 267 244 39 20 22 196 35 24 104 85 61 18 22 22 184 31 27 40 62 66 84 2017 2018 2019 2020 2021 Containerboard Boxboard Europe Specialty
Slide 29: Concluding Remarks
CONCLUDING REMARKS 29
Slide 30: Near Term Factors
NEAR TERM FACTORS • North American operations: positive impact from margin improvement initiatives YoY and QoQ • Raw materials: expect higher raw material • Containerboard: expect continued strong prices both year-over-year and sequentially in demand levels in addition to favourable impact Q1 for al
Slide 31: Appendix
APPENDIX —- Ne | ae
Slide 32: Segmented YoY Operating Income Waterfalls
SEGMENTED YoY OPERATING INCOME WATERFALLS Containerboard (millions of CAN$) Boxboard Europe (millions of CAN$) 200 50 6 6 8 (13) 19 11 (28) 14 24 27 110 122 (1) 29 106 25 100 40 (10) 5 69 (32) 0 (9) 8 (6) 16 0 Q4 2019 Depr. & Q4 2019 Volume Price Other Raw Q4 2020 Depr. & Q4 2020 -25 Q4 2019 Depr. &
Slide 33: Segmented Sequential Operating Income Waterfalls
SEGMENTED SEQUENTIAL OPERATING INCOME WATERFALLS Containerboard (millions of CAN$) Boxboard Europe (millions of CAN$) 150 1 50 5 40 122 40 5 125 13 110 29 30 100 12 27 (13) 30 100 (2) (6) (28) 19 (3) 20 (4) 71 (2) 75 10 5 (1) 50 0 (9) Q3 2020 Depr. & Q3 2020 Price & Raw Other Volume Q4 2020 Depr. &
Slide 34: Selected Reference Prices
SELECTED REFERENCE PRICES Current Current (US$/s.t.) Containerboard - Selected Products (Euro€/s.t.) Boxboard Europe - Selected Products (Feb-21) (Jan-21) 800 1,200 765 1,100 1,095 700 1,000 665 900 600 800 500 700 600 654 400 500 Aug-19 Aug-20 Nov-19 Nov-20 Feb 18 Nov-19 Nov 18 Aug-19 Aug 18 May 18
Slide 35: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q4 2020 vs Q4 2020 vs 2018 2019 2020 Q4 2019 Q3 2020 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 Q3 Q4 Year (units) (%) (uni
Slide 36: For more information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investor@cascades.com 36