Slide 1: Q3 2022 Financial Results
Q3 2022 FINANCIAL RESULTS November 10, 2022
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 Adj. OIBD1 Variation Quarter-over-Quarter Year-over-Year Year-to-Date (in millions of Canadian dollars) Q3 2022 vs Q2 2022 Q3 2022 vs Q3 2021 2022 vs 2021 Pricing $41 million $132 million $347 million Freight & Production Costs $(10) millio
Slide 4: Summary of Quarterly Financial Results & KPIs
SUMMARY OF QUARTERLY FINANCIAL RESULTS & KPIs 20202 2021 2022 (In millions of CAN$, except per common share amounts, 5 where noted) Year Q1 2 Q2 Q3 Q4 Year Q1 Q2 Q3 YTD LTM6 Financial Results Sales 4,105 942 956 1,030 1,028 3,956 1,038 1,119 1,174 3,331 4,359 Operating income (loss) 292 44 23 73 (90
Slide 5: Recycled Fibre Costs - Index List Prices
RECYCLED FIBRE COSTS - INDEX LIST PRICES ($ US/s.t.) Current OCC: 300 (Nov-22) • Rapidly evolving market with persistently lower demand 275 259 for the material related to easing of activity at 250 containerboard mills and lower export demand 225 200 • Solid inventories at our mills 175 • Lower pric
Slide 6: Virgin Fibre Costs - Index List Prices
VIRGIN FIBRE COSTS - INDEX LIST PRICES Current ($ US/s.t.) (Oct-22) VIRGIN PULP: 1,770 • Slight improvement in market dynamics 1,800 sequentially 1,600 1,620 • Transportation constraints beginning to recover, with rail car availability improving and port 1,400 congestion easing 1,200 • Mills adequat
Slide 7: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Results Change vs. Comments on sequential performance Q3 2022 Q2 2022 Q3 2021 è Total shipments increased by 3% sequentially. Shipments of parent rolls increased by Shipments ('000 s.t.) 8% and those of converted products decreased by 1% compared to the second qua
Slide 8: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Quarterly Operating Income & Adjusted OIBD1 (M CAN$) è Sequential Q3 shipments of converted products: 19% 14% 15% 17% 17% Canada -1.9% (vs. market -3.1%); US +1.1% (vs. market -3.8%) 94 99 103 è Year-over-year Q3 shipments of converted products: 80 Canada -4.8% (v
Slide 9: Packaging Products / Containerboard - Bear Island
PACKAGING PRODUCTS / CONTAINERBOARD - BEAR ISLAND (in millions of Canadian dollars unless otherwise specified) PROJECT COST US $470 - $485 M • Persistent inflationary pressure on costs. INVESTMENT TO DATE (2018 - Q3 2022) US $318 M ($405 M) • Minor delay in start-up driven by difficulty meeting cert
Slide 10: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q3 2022 Q2 2022 Q3 2021 Sales (M$) è Sales remained stable sequentially. Price increases in response to cost inflation 168 —% 17% and the depreciation of the Canadien dollar contributed positively to sales
Slide 11: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS 1 Quarterly Operating Income & Adjusted OIBD1 (M CAN$) è Q3 2022 adjusted OIBD of $25 M, or 15% on a margin basis, was stable sequentially and increased 47% versus the prior- 15% 14% 12% 14% 14% 15% 15% year. 24 22 25 25 21 20 20 è Industrial packaging: result
Slide 12: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q3 2022 Q2 2022 Q3 2021 è Shipments increased by 1% on a sequential basis in the third quarter. This reflects a Shipments ('000 s.t.) 3% increase in shipments of converted products and lower external shipments of 134 1% (9)% parent
Slide 13: Tissue Papers
TISSUE PAPERS Quarterly Operating Income (Loss) & Adjusted OIBD1 (M CAN$) è Continued good demand levels for Away-from-Home tissue products (shipments +3% YoY, stable QoQ), and Retail tissue 3% (2)% 1% products (shipments + 5% YoY, +6% QoQ). (5)% (2)% 29 è The cumulative impact of continued unpreced
Slide 14: Tissue Papers - Strategic Plan Update
TISSUE PAPERS - STRATEGIC PLAN UPDATE 60 - 80 (~65) ~10 1 è Benefits realized to date from pricing initiatives are è Expected Q4 2022 adjusted OIBD of $8 - $12 million will reflect additional tracking in line with expectations, but have not kept pace benefits from ongoing profitability initiatives.
Slide 15: Q3 2022 Adjusted OIBD to Operating Income Reconciliation
Q3 2022 ADJUSTED OIBD1 TO OPERATING INCOME RECONCILIATION (M CAN$) 120 111 80 44 40 25 (67) (3) 0 (16) Adjusted Depr. & Adjusted Unrealized loss Impairment Operating 1 OIBD Amort. Operating on financial charges income income 1 instruments Container- Specialty Tissue Corporate (M CAN$) board Products
Slide 16: Net Earnings (Net Loss) - IFRS vs Adjusted
NET EARNINGS (NET LOSS) - IFRS VS ADJUSTED2 NET EARNINGS NET EARNINGS (NET LOSS) (NET LOSS) PER COMMON SHARE1 (In millions of Canadian dollars, except per common share amounts) Q3 2022 Q3 2022 As per IFRS (2) ($0.02) Specific items: Impairment charges 16 $0.12 Unrealized loss on financial instrument
Slide 17: Quarterly Year-over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2 0.40 Q3 2021 Reversal of tax assets in Canada $18 million ($0.18 per share) 0.32 0.30 0.01 0.01 0.03 0.23 (0.03) 0.20 0.20 $ cents (0.04) 0.10 0.00 (0.33) (0.01) (0.22) (0.02) EPS reported Specific Adjusted EPS Income OIBD Financing Share of Deprecia
Slide 18: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 0.30 0.03 0.15 (0.01) (0.01) (0.03) 0.20 0.20 (0.03) $ cents 0.10 0.10 0.10 — 0.00 (0.22) (0.02) EPS reported Specific Adjusted EPS OIBD Income Non- Share of Depreciation Financing Adjusted EPS Specific EPS reported Q2 2022 items Q2 2022 2 tax controllin
Slide 19: Cash Flow Overview
CASH FLOW OVERVIEW 2020 4 2021 2022 (In millions of CAN$, except per common share amounts) Year Q1 4 Q2 Q3 Q4 Year Q1 Q2 Q3 YTD 5 LTM 6 Cash flow from operations 458 82 87 58 20 247 19 81 60 160 180 Specific items1 15 4 2 12 31 49 7 — 2 9 40 Adjusted cash flow from operations2 473 86 89 70 51 296 26
Slide 20: New Capital Investments
NEW CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding new leases, disposal of assets and accounts payable variation) 2022F CAPEX: $450 M - $470 M1 includes ~ CAN$310 M - $330M for Bear Island conversion 330 321 312 26 21 27 26 50 16 81 227 213 37 20 39 22 169 24 85 104 258 61 217 184 2
Slide 21: Net Debt Reconciliation - Q3 2022
NET DEBT1 RECONCILIATION - Q3 2022 (M CAN$) 122 2,011 2,000 1,900 119 1,800 61 1,712 36 1,700 20 2 1,600 (60) (1) Net debt as of Cash flow Proceeds from Investments Dividends paid & Right-of-use Changes in non- F/X CAN$ Payments for Net debt as of June 30, 2022 from oper. disposals of and others cha
Slide 22: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / Adjusted OIBD1,3 Interest Coverage Ratio2,3 6.7x 5.8x 6.0x 6.1x 6.2x 4.7x 4.6x 4.3x 4.6x 4.6x 4.7x 4.0x 3.8x 3.6x 3.5x 3.25x 3.5x 3.4x 3.4x 2.5x 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3
Slide 23: Near Term Factors
NEAR TERM FACTORS • Logistics and production costs: expect continued pressure on vs Q3 2022 vs Q4 2021 costs YoY and QoQ in Q4 for all business segments. Q4 2022 OIBD Trend • Containerboard: QoQ performance to reflect lower average raw material prices offset by softer volume and elevated operational
Slide 24: Appendix
APPENDIX 24
Slide 25: Year-over-Year Sales Reconciliation
YEAR-OVER-YEAR SALES RECONCILIATION (M CAN$) +14% 1,300 26 15 1,200 132 1,174 (3) (26) 1,100 1,030 1,000 Recovery & Sales Recycling & Sales (M CAN$) Q3 2021 Price F/X CAN$ Mix Other items Volume Q3 2022 Containerboard 507 66 13 (11) — 20 595 Specialty Products 144 31 4 — — (11) 168 Tissue Papers 344
Slide 26: Year-over-Year Operating Income Reconciliation
YEAR-OVER-YEAR OPERATING INCOME RECONCILIATION + Higher selling prices + Higher realized spreads - Higher energy, logistics and other operational + Higher selling prices - Higher raw material costs costs - Lower volumes Lower volume for external parent rolls - Higher energy, logistics, chemicals and
Slide 27: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION (M CAN$) +5% 1,200 11 17 1,174 41 (3) (4) (7) 1,150 1,119 1,100 Sales Recovery & Sales (M CAN$) Q2 2022 Price F/X CAN$ Volume Mix Other Recycling Q3 2022 Containerboard 569 9 8 19 (10) — — 595 Specialty Products 168 5 3 (8) — — — 168 Tissue Papers 342 27 6 — 7 — — 382
Slide 28: Sequential Operating Income Reconciliation
SEQUENTIAL OPERATING INCOME RECONCILIATION + Higher selling prices + Higher selling prices + Higher volume - Lower volume - Higher raw material costs - Higher energy and other operational costs - Higher energy and other operational costs (M CAN$) 150 4 4 — 111 12 100 63 91 (4) (19) + Improved pricin
Slide 29: Selected Reference Prices
SELECTED REFERENCE PRICES Current Current Containerboard - Selected Products (US$/s.t.) Specialty Products - Selected Products (Oct-22) (US$/s.t.) (Oct-22) 1,200 1,000 1,100 935 1,100 900 1,000 865 800 900 800 700 700 600 600 Nov-21 Feb-21 May-20 Aug-19 Nov 18 May-22 Aug-21 Nov-20 Feb-20 May 19 Aug
Slide 30: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q3 2022 vs. Q3 2022 2020 2021 2022 Q3 2021 vs.Q2 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. Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 (units) (%) (units) (%)
Slide 31: For More Information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / investisseur@cascades.com