Slide 1: Investor Presentation March 2024
1 Investor Presentation March 2024
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: Disclaimer: 2022-2024 Financial Information
DISCLAIMER: 2022-2024 Financial Information When taking into consideration all of the contributing factors discussed below, management expects sales, operating income and EBITDA (A) to increase from the year 2022 levels: • Annualization of selling price changes in 2022 and in the first quarter of 20
Slide 4: We care. We innovate. We create value.
We care. We innovate. We create value. Mission Vision To improve the well-being of To be a key contributor to people, communities and the our customers’ success by planet by providing sustainable leading the way for sustainable and innovative solutions that packaging, hygiene and create value. recov
Slide 5: Investment Thesis
INVESTMENT THESIS • 2022-2024 Strategic Plan1 • Modernized and well-positioned asset base equipped to drive value for customers & shareholders • Strong sustainability track record • Bear Island 100% recycled lightweight containerboard mill (Virginia, US) • Agile & aligned go-to market approach (1) P
Slide 6: 2022 – 2024 Strategic Plan
2022 – 2024 Strategic Plan OUR TOP PRIORITIES STATUS Deliver on the Tissue Papers business 1 profitability plan Ramp up the strategic Bear Island 100% 2 recycled and lightweight containerboard facility Explore opportunities to grow our sustainable 3 packaging business in the U.S. over the longer ter
Slide 7: 2024 Financial Targets
2024 Financial Targets2 • Containerboard spreads decreased by ~ US$150/s.t. year-over-year in 2023 due to higher raw material costs and lower indexed selling prices. Annualised, these changes represent a negative EBITDA (A)1 impact of ~CAN$300 M4 for this segment. • Forecasted benefits of ~$50 M in
Slide 8: Sustainability Action Plan 2021-2025
Sustainability Action Plan 2021-2025 Ambitious targets, a robust action plan, GHG reduction targets have been approved by the Science Based Targets initiative (SBTi). Climate Change 38.7% IN 2030 VS 2019 27.5% IN 2030 VS 2019 22% IN 2030 VS 2019 Respectful scopes 1 + 2, mills (kg of CO2 scopes 1 + 2
Slide 9: Financial Results
Financial Results 9
Slide 10: Q4 2023 and FY2023 Results
Q4 2023 and FY2023 Results (in millions of CAN$, except per share amounts) Q4 Q4 2023 2022 2023 2022 Sales 1,138 1,135 4,638 4,466 Operating Income (loss) (24) (20) 40 33 EBITDA (A)1 122 116 558 376 Margin (EBITDA (A)1/Sales) 10.7% 10.2% 12.0% 8.4% Net earnings (loss) (57) (27) (76) (34) Adjusted ne
Slide 11: Overview of Consolidated Profitability Drivers
Overview of Consolidated Profitability Drivers (in millions of CAN$) Consolidated EBITDA (A)1 Quarter-over-Quarter Year-over-Year 2023 vs 2022 Variation Drivers (M CAN$) Q4 2023 vs Q3 2023 Q4 2023 vs Q4 2022 Pricing ($29) million ($70) million ($14) million Freight & Production Costs $6 million $22
Slide 12: Recycled Fibre Costs – Index Prices
Recycled Fibre Costs – Index Prices (US$/s.t.) OCC: Current • Consistent strong domestic demand, and fibre generation (Mar-24) still following lower seasonal generation levels that are in line with average pace in recent years • Export volumes remaining consistent • Tighter market dynamics given fac
Slide 13: Virgin Fibre Costs – Index List Prices
Virgin Fibre Costs – Index List Prices (US$/tonne) VIRGIN PULP : Current (Feb-24) • Sequential index price increases starting late 2023; index prices remain significantly lower YoY • Lower NBSK supply from market related downtime 1,430 NBSK and permanent closures in North America 1,220 • Uncertainty
Slide 14: Capital Investments
Capital Investments (in property, plant & equipment, in millions of CAN dollars, excluding new leases, disposal of assets and accounts payable variation) Strategic investments have transformed our operational platform. 532 36 41 29 330 312 289 26 27 50 32 81 227 213 35 37 169 20 39 22 426 25 ~175 24
Slide 15: 5-Year Financial Performance
5-Year Financial Performance Sales (M CAN$) Free Cash Flow2 8.5% 8.9% 4,638 4,466 7.4% 4,105 5.1% 3,948 3,956 4.7% 413 290 348 204 210 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Free Cash Flow (M CAN$) Free Cash Flow/Sales (%) EBITDA (A)1 & Margin Net Debt / EBITDA (A)1 5.2x 12.6% 13.3% 12.0%
Slide 16: Financial Ratios & Debt Maturities
Financial Ratios & Debt Maturities Net Debt / Adjusted EBITDA (A)1,3 Interest Coverage Ratio2,3 5.2x 6.7x 4.7x 6.0x 5.8x 4.0x 3.8x 4.9x 3.6x 3.5x 3.25x 3.5x 3.4x 4.7x 4.6x 4.6x 4.5x 4.3x 2.5x 3.4x 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net
Slide 17: Containerboard Packaging
Containerboard Packaging Customer-centric Modernized group operational firmly platform rooted incustomers providing its key markets, with a wide placing innovation and eco- range of innovative, high-performance responsibility packaging at the heart of its solutions business strategy Our Sustainable
Slide 18: Containerboard Packaging
Containerboard Packaging 6 mills1 Annual capacity3: 2023 sales2: 2023 Integration 16 converting sites1 1.805 M s.t. $2.3 B rate1: 52% (68% including partners) 13% 8% 19% 22% 2023 47% 2023 2023 sales sales 53% sales 87% 51% Manufacturing - Canada Manufacturing - US Recycled Virgin Linerboard Medium C
Slide 19: Containerboard – Quarterly Performance
Containerboard – Quarterly Performance Quarterly EBITDA (A)1 (M CAN$) • Sequential Q4 shipments of converted products: Canada +0.6% (vs. market +0.9%); US +5.6% (vs. market -0.2%) 22% Shipments/day: +6.4% 21% 17% 17% • Year-over-year Q4 shipments of converted products: 126 12% 119 Canada +7.4% (vs.
Slide 20: Containerboard - Market Landscape
Containerboard - Market Landscape U.S. Containerboard Inventories Reference Selling Prices for Containerboard1 at Box Plants and Mills2 2,838 920 833 845 850 745 727 2,627 2,528 4.4 4.2 3.8 2021 2022 2023 2021 2022 2023 Average inventory level ('000 s.t.) Weeks of supply Corrugated medium 26 lbs sem
Slide 21: Specialty Products
Specialty Products Customer-centric group firmly rooted in its key markets, placing innovation and eco-responsibility at the heart of its business strategy • Fresh proteins • Fruits & vegetables • Isothermal distribution • Egg packaging • Food services 21
Slide 22: Specialty Products
Specialty Products 22 17 operating facilities1 • 9 in the industrial packaging sector 2023 Sales2: $642 M • 8 in the consumer product packaging sector 5%4% 20% 29% 36% 2023 29% 2023 4% 2023 sales sales sales 64% 71% 38% Fresh proteins Fruits & vegetables Consumer packaging Canada US Egg packaging In
Slide 23: Specialty Products – Quarterly Performance
Specialty Products – Quarterly Performance Quarterly EBITDA (A)1 (M CAN$) • Cardboard: results decreased sequentially reflecting the impacts of lower volume, less favourable spread 17% following increases in raw material costs, and higher 15% maintenance costs that were associated with usual 12% 13%
Slide 24: Tissue Papers – More resilient. More agile. Less volatile.
Tissue Papers – More resilient. More agile. Less volatile. Equipped to be the conventional towel and tissue papers Private Label PARTNER OF CHOICE for distributors and retailers 24
Slide 25: Tissue Papers
Tissue Papers 2023 sales: Annual capacity1: 2023 Integration 10 plants $1.6 B 445,000 s.t. rate1: 87% ~65-70 M cases Converting 40% Manufacturing Converting capacity 48% 49% capacity 51% capacity 52% by country1 by country1 by market1 60% Canada US Canada US Away-from-Home tissue Retail tissue (1) C
Slide 26: Operating Platform Aligned with Major Population Areas
Operating Platform Aligned with Major Population Areas 26 2017 - 2021 • Significant investments in converting assets • Closure of underperforming plants • Well-located and larger plants • Acquisition of Orchids assets • Production efficiency initiatives 2022 – 2023 Population Density (People / km2)
Slide 27: Tissue Papers – Quarterly Performance
Tissue Papers – Quarterly Performance Quarterly EBITDA (A)1 (M CAN$) Q4 2023 Shipments of Converted Products (cases): 14% 16% 11% Retail tissue Away-from-Home tissue 4% 61 61 Q4 vs. Q4: +1.1 million Q4 vs. Q4: +0.1 million 2% Q4 vs. Q3: -0.2 million Q4 vs. Q3: -0.3 million 44 FY 2023 Shipments of Co
Slide 28: Tissue Papers Industry
Tissue Papers Industry US Tissue Parent Roll Production & Capacity Utilization1 U.S. Parent Roll Prices1 (US$/s.t.) 1,594 97% 1,515 92% 93% 94% 1,465 1,428 9,891 1,266 1,222 9,484 9,491 1,120 1,156 9,401 2020 2021 2022 2023 Recycled parent roll, average (US$/s.t.) Virgin parent roll, average (US$/s.
Slide 29: Near-Term Factors
NEAR-TERM FACTORS vs Q4 2023 vs Q1 2023 Q1 2024 • Containerboard: Sequential performance forecast to decrease, reflecting higher raw material and energy costs, lower average EBITDA (A)1 Trend selling price and lower production levels related to inventory management following softer Q4 demand. Year-o
Slide 30: Appendices
APPENDICES 30
Slide 31: Recovery & Recycling
Recovery & Recycling A natural extension of our operations, delivering financial and strategic value. MT/YR of secondary fibre & virgin of Cascades’ fibre requirements via 2.6 M pulp supply chain provided 25% our collection & processing facilities We create value by North American operations facilit
Slide 32: Recovery & Recycling: Protecting our “Forests”
Recovery & Recycling: Protecting our “Forests” Materials that are • Domestic competition is rising… OCC consumed from NA containerboard and recycled pulp mills integral to our products to grow by 3.7 M MT from 2020-2025 Mixed & • OCC represents 74% (60% in 2010) of recycled Newsprint, 7% fibre consu
Slide 33: Quarterly Financial Results & KPIs
Quarterly Financial Results & KPIs 2021 2022 2023 (In millions of CAN$, except per common share amounts, where noted) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year 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 1,198 1,138 4,638 Operating income (los
Slide 34: Cash Flow Overview
Cash Flow Overview 2021 2022 2023 (In millions of CAN$, except per common share amounts) Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 Year Cash flow from operations 82 87 58 20 247 19 81 60 100 260 89 117 100 91 397 Specific items1 4 2 12 31 49 7 — 2 3 12 1 5 6 12 24 Adjusted cash flow from operati
Slide 35: Historical COGS and SG&A Overview
Historical COGS and SG&A Overview COST OF SALES 2022 2023 (In millions of CAN$) Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR Raw materials 359 393 440 395 1,587 365 396 419 395 1,570 Wages & benefits 171 176 171 180 698 193 194 192 180 773 Energy 59 59 65 60 243 63 58 57 60 231 Delivery 142 149 149 137 577 135
Slide 36: Historical Reference Prices and Fibre Costs
Historical Reference Prices and Fibre Costs 2021 2022 2023 2023 vs 2022 Q4 2023 vs. Q3 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. Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year (units) (%) (units) (%) Selling
Slide 37: Sensitivities
SHIPMENTS / EBITDA (A)1 SENSITIVITIES2 CONSUMPTION (‘000 s.t, ‘000 mm Btu for Natural Gas) INCREASE IMPACT (Annually, CAN$ M) 37 SELLING PRICE2 (Manufacturing & Converting) PACKAGING Linerboard, 42-lbs unbleached kraft, Eastern US 425 US$25/s.t. 14 Corrugated Medium, 26-lbs semichemical, Eastern US
Slide 38: Investor Relations Contact
www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514.282.2697 / investor@cascades.com