Cascades Inc. · TSX:CAS
Cascades — Q3 2010 Earnings Presentation
28 slides from Cascades's earnings presentation, Nov 12, 2010
Slide 1: Review of financial results Q3 2010
CASCADES Review of financial results Q3 2010 November 12, 2010
Slide 2: Disclaimer
DISCLAIMER 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 number of risks, uncertainties
Slide 3: Opening Remarks
OPENING REMARKS 3
Slide 4: Quarterly Highlights
QUARTERLY HIGHLIGHTS •EPS of $0.29 compared to EPS of $0.22 in the previous quarter. •EBITDA of $115M, up 7% in comparison to Q2 2010 •Cash flow from operations (adjusted) of $83M compared to $71M in Q2 2010. •Free cash flow after W/C variation of $42M or $0.43 per share •Net debt down $37M and $54M
Slide 5: Summary of Financial Results
SUMMARY OF FINANCIAL RESULTS 2008 2009 2010 (In millions of CAN$, except amount per share) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 YTD Financial results Sales 4,017 970 981 974 952 3,877 942 998 1,028 2,968 Excluding specific items EBITDA 306 107 121 127 110 465 78 107 115 300 Net earnings (loss) 4 21 28 35
Slide 6: Segmented EBITDA
SEGMENTED EBITDA (M CAN$) Boxboard (% of sales) 33 (M CAN$) Containerboard (% of sales) 35 12.0% 32 26 29 55 18.0% 30 10.0% 50 24 25 50 25 23 8.0% 45 20 41 15.0% 38 39 6.0% 40 37 15 36 9 10 11 4.0% 35 10 30 32 31 30 12.0% 3 2.0% 30 28 5 25 0 0.0% 20 9.0% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 20
Slide 7: Business Conditions in Q3 2010
BUSINESS CONDITIONS IN Q3 2010 Selling Cascades North American manufacturing selling price Raw material prices and raw material cost indices (US$) costs 750 1,200 650 EBITDA EBITDA 550 $107 M $115 M 1,100 EBITDA EBITDA $78 M 450 $107 M EBITDA EBITDA EBITDA $121 M $127 M $110 M 350 1,000 250 900 150
Slide 8: Financial Review
FINANCIAL REVIEW 8
Slide 9: Q3 2010 EBITDA Variance Analysis
Q3 2010 EBITDA VARIANCE ANALYSIS (M$) 160 2 1 (6) 140 8 (13) 16 115 120 107 100 80 60 40 20 0 Q2 2010 Selling price & Cost Volum e Energy cos ts Variation of the Raw material Q3 2010 EBITDA mix improvements CAN$ cos ts EBITDA & other items Containerboard 39 5 6 6 1 (2) (5) 50 Boxboard 29 9 - (4) - (
Slide 10: Key Performance Indicators (KPIs)
KEY PERFORMANCE INDICATORS (KPIs (KPIs) KPIs) ('000 s.t.) Total Shipments Capacity utilization rate (Manufacturing) 900 889 100% 853 839 96% 875 95% 790 828 839 91% 94% 93% 800 90% 90% 779 800 89% 87% 85% 89% 765 85% 727 84% 700 80% 81% 75% 600 70% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3
Slide 11: Q3 2010 EBITDA to Op. Income Reconciliation
Q3 2010 EBITDA TO OP. INCOME RECONCILIATION (M$) 115 (53) 600 120 100 80 62 (4) (1) (1) 2 58 60 40 20 0 EBITDA excl. spec. Depreciation & EBIT excl. spec. Unreal. loss on finan. Closure and restruct. Impairment loss Gain on disposal and Operating income items amortization items inst. costs others Q3
Slide 12: Q3 2010 Net Earnings Reconciliation
Q3 2010 NET EARNINGS RECONCILIATION (M$) 60 50 9 2 1 (1) (1) (4) 40 (4) 28 30 30 20 10 0 Net earnings Share of Gain on Tax effect on Impairment Closure and F/X gain on Unrealized Net earnings excluding results of disposal and specific items loss restruct. costs long-term loss on finan. (GAAP) spec.
Slide 13: Cash Flow Overview
CASH FLOW OVERVIEW 2008 2009 2010 (in millions of CAN$) Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 YTD Cash flow from operations 155 68 81 94 62 305 38 71 82 191 Working capital variation (31) (1) 1 23 29 52 (4) (49) (9) (62) Cash flow provided by operations 124 67 82 117 91 357 34 22 73 129 Capital expenditure
Slide 14: Net Debt Reconciliation
NET DEBT RECONCILIATION (M$) 1,700 25 16 11 1,553 9 (82) 1,600 1,516* 1,500 1,400 1,300 1,200 1,100 1,000 Net debt June Variation of CAPEX Other assets Dividend, stock Cash flow from Net debt 30, 2010 working capital and investments buyback & operations September 30, others 2010 Net debt down mainly
Slide 15: Balance Sheet & Key Financial Ratios
BALANCE SHEET & KEY FINANCIAL RATIOS 2008 2009 2010 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Total assets 4,031 4,041 3,886 3,877 3,792 3,792 3,764 3,796 3,851 Total debt 1,812 1,818 1,670 1,590 1,552 1,552 1,531 1,575 1,537 Net debt* 1,800 1,805 1,658 1,570 1,533 1,533 1,508 1,553 1,516 Shareholders' equity
Slide 16: Segmented Review
SEGMENTED REVIEW 16
Slide 17: Packaging - Boxboard
PACKAGING - BOXBOARD Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price Reference price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US or euro/s.t.) ($US or euro/s.t.) Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010
Slide 18: Packaging - Containerboard
PACKAGING - CONTAINERBOARD Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price Reference price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t. or msf) ($US/s.t. or msf) ($US/s.t.) Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2
Slide 19: Packaging - Specialty Products
PACKAGING – SPECIALTY PRODUCTS Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US/s.t.) Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Industria
Slide 20: Tissue Papers
TISSUE PAPERS Sales EBITDA EBITDA margins Shipments Avg. Selling price Avg. Selling price Reference price 1 (in millions $) (in millions $) (% of sales) (in thousands s.t.) ($CAN/s.t.) ($US/s.t.) ($US/s.t.) Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 2010 Q3 2010 Q2 20
Slide 21: Q&A
Q&A 21
Slide 22: Concluding Remarks
CONCLUDING REMARKS 22
Slide 23: Fourth Quarter Outlook
FOURTH QUARTER OUTLOOK Boxboard Boxboard Containerboard Specialty products Tissue papers North America Europe Seasonal Seasonal Seasonal Seasonal Seasonal Volume Decrease Decrease Decrease Decrease Increase Slight Slight Selling prices Stable Stable Increase Increase Increase Raw material Slight Inc
Slide 24: Appendices
APPENDICES 24
Slide 25: Boralex / Reno de Medici
BORALEX / RENO DE MEDICI Please refer to Boralex’s and Reno de Medici’s press releases for more information 25
Slide 26: Market Prices and Costs Summary
MARKET PRICES AND COSTS SUMMARY Change Change Q3 2010 Q3 2010 Q3 2010 Q3 2010 2008 2009 2010 Q3 2009 Q3 2009 Q2 2010 Q2 2010 Average Average Average Average Average Average Average Average Average Average These indexes should only be used as indicator of trends and they Q1 Q2 Q3 Q4 Q1 Q2 Q3 be diffe
Slide 27: Notes
NOTES 1. The Cascades North American selling prices index represents an approximation of the Company’s manufacturing selling prices in North America (excluding Converting products). It is weighted according to shipments and is based on the average selling price of our North American manufacturing op
Slide 28: For more information
For more information: www.cascades.com/investors www.cascades.com/investors Didier Filion Director, Investor Relations didier_filion@cascades.com 514- 514-282- 282-2697 28 CREDIT: IMAGE ECOterre