Cascades Inc. · TSX:CAS
Cascades — Q3 2017 Earnings Presentation
33 slides from Cascades's earnings presentation, Nov 13, 2017
Slide 1: 1-20 11D 1-0 1-20 1-20 1-10 1-0 1-20 1-2 a) 1-0 0.95 085 0.80
1-20 120 11D 1-0 1-20 1-20 1-10 1-0 1-20 1-2 a) 1-0 0.95 090 085 0.80 075 0.70
Slide 2: Historical Market Prices of Main Products and Raw Material
LTM 4 Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 TOTAL US$/CAN$ - Average rate $ 0.81 $ 0.81 $ 0.76 $ 0.75 $ 0.78 $ 0.73 $ 0.78 $ 0.77 $ 0.75 $ 0.75 $ 0.76 $ 0.74 $ 0.80 $ 0.77 $ 0.76 US$/CAN$ End of period rate $ 0.79 $ 0.80 $ 0.75 $ 0.72 $ 0.72 $ 0.77 $ 0.77 $ 0.76 $ 0.74 $ 0.74 $ 0.75 $ 0.77 $
Slide 3: Sales variance Q3 2016 to Q3 2017
2402 €0 sales $NVO X/4 BWUN|OA DuljoXoay pue 23 Alanooay Ss! xIW 9 aoud Bulyjas = sainsojo pue ‘boy xo ssaulsng 9102 £0 sales 1,021
Slide 4: Supplemental Information on Non-IFRS Measures
Please refer to “Supplemental Information on Non-IFRS Measures” on pages 7 to 13 for reconciliation of these figures. Raw material: The impacts of these estimated costs are based on production costs per unit shipped externally or inter-segment, which are affected by yield, product mix changes, and p
Slide 5: Total production and capacity utilization
12 2 < < < < — b Ss Ss S Ss S S Ss Ss Rg Ss i i) Si Si Si i <2 st Ny el x = x oS So oS So So So So oS @ Total production (‘000 s.t.) O Capacity utilization rate (%) 100% 95% 90% 85% 80% 75% Q3 2017
Slide 6: Containerboard Packaging segment performance
Source: RISI Source: Fibre Box Association Our Performance main variances in sales and operating income for the Containerboard Packaging segment in the third quarter of 2017 , compared to the same period of 2016, are shown below: Sales ($M) Operating income ($M)
Slide 7: Containerboard Packaging sales variance
356 2102 €0 sales $NVO X/4 WIN XIW 9 80d Bulljas uogisinboe ssauisng 9102 €D sales
Slide 8: Containerboard Packaging Q3 results
Shipments 2 ('000 s.t.) 26% 294 369 Average Selling Price (CAN$/unit) 1,212 1,186 -2% Sales ($M) 23% 356 438 Operating income ($M) (as reported) 44 50 14% (adjusted) 1 18% 45 53 OIBD 1 ($M) 57 69 21% % of sales 16% 16% (adjusted) 1 58 72 24% % of sales 16% 16% For exponents on the graphics, see defi
Slide 9: European boxboard weekly data
80,000 70,000 60,000 50,000 40,000 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 (m.t. per week) m 2015 mm 2016 wm 2017
Slide 10: Boxboard Europe segment performance
Source: CEPI Cartonboard Our Performance main variances in sales and operating income for the Boxboard Europe segment in the third quarter of 2017 , compared to the same period of 2016, are shown below: Sales ($M) Operating income ($M)
Slide 11: Boxboard Europe sales variance
202 cop] co = 2102 €D sales $NVO X/4 xIwW 9 aoud Bulljas awIN|O\ 9102 £0 sales
Slide 12: Boxboard Europe Q3 results
Shipments 2 ('000 s.t.) 5% 258 271 Average Selling Price 3 (CAN$/unit) 734 748 2% (Euro€/unit) 504 508 1% Sales ($M) 7% 189 202 Operating income ($M) (as reported) 1 5 400% (adjusted) 1 400% 1 5 OIBD 1 ($M) 9 14 56% % of sales 5% 7% (adjusted) 1 9 14 56% % of sales 5% 7% For exponents on the graphic
Slide 13: Recycled paper prices
(US$/s.t.) 190 170 150 130 110 3 12 wf ee — = = = = = = Ss = Ss = Ss S S SR & SRS 8 & & 8&8 & SB KS KF KF KR B > +s > = s > => > = ~ => => 6 Ss Ss Ss Ss Ss Ss Ss 2 Ss S Ss s = 7 Ss B =a Ss = = Ss = =. = = Ss 8B _ = Recycle paper No. 37 (Northeast) Recycle paper No. 11 (Northeast) == Recycle paper No
Slide 14: Specialty Products segment performance
Source: RISI Our Performance main variances in sales and operating income for the Specialty Products segment in the third quarter of 2017 , compared to the same period of 2016, are shown below: Sales ($M) Operating income ($M)
Slide 15: Specialty Products sales variance
L102 £0 Sees SUwnN|o/, SUOELEA JBYIO _ xw 9 oud Buy|jag , DuyjoAooy pue Aienooay 23 158 9102 €D sales
Slide 16: Specialty Products Q3 results
Sales ($M) 15% 158 181 Operating income ($M) (as reported) 12 10 -17% (adjusted) 1 -17% 12 10 OIBD 1 ($M) 18 15 -17% % of sales 11% 8% (adjusted) 1 18 15 -17% % of sales 11% 8% For exponents on the graphics, see definitions on page 19. Corporation incurred certain specific items in the third quarter
Slide 17: Parent roll production and capacity utilization
100% 98% 96% 94% 92% 90% 88% 12 < < < < — KR — Ss Ss S S Ss S Ss Ss Ss Rg x Si i a i i ro) Si <2 = x <2 a = Ny el oS So oS SG So Go GS So fo} @ Total parent roll production (‘000 s.t.) (2) Capacity utilization rate (%)
Slide 18: Tissue Papers segment performance
Source: RISI Our Performance main variances in sales and operating income for the Tissue Papers segment in the third quarter of 2017 , compared to the same period of 2016, are shown below: Sales ($M) Operating income ($M)
Slide 19: Tissue Papers sales variance
oO N oO L102 €0 sales $NVO X/4 AWUN|O/A, xIwW 9 aoud Bulljas 342 9102 €D sales
Slide 20: Tissue Papers Q3 results
Shipments 2 ('000 s.t.) -4% 163 157 Average Selling Price (CAN$/unit) 2,093 2,064 -1% Sales ($M) -6% 342 323 Operating income ($M) (as reported) 26 9 -65% (adjusted) 1 -65% 31 11 OIBD 1 ($M) 42 22 -48% % of sales 12% 7% (adjusted) 1 47 24 -49% % of sales 14% 7% For exponents on the graphics, see def
Slide 21: Major capital projects
major capital projects that were initiated, are in progress or were completed in the first nine months of 2017 are as follows: CONTAINERBOARD PACKAGING • Investment for the construction of a new containerboard packaging plant in Piscataway, New Jersey, United States (please refer to “Significant Fac
Slide 22: Liquidity and net debt
Adjusted OIBD 1,2 (last twelve months) 3.8 Net debt/Adjusted OIBD 1,2 3.6 Liquidity available via the Corporation’s credit facilities, along with the expected cash flow generated by its operating activities, will provide sufficient funds to meet our financial obligations and to fulfill our capital e
Slide 23: Accounting policies and controls and procedures
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS For all the details for this section, please refer to the notes to the unaudited condensed interim consolidated financial statements. CONTROLS AND PROCEDURES EVALUATION OF THE EFFECTIVENESS OF DISCLOSURE CONT
Slide 24: Operating income variance analysis
GLA 2102 €0 sales SUOMEUIWUI|a Auedwioos9}ul JaYO $NVO X/4 EO xXIW 9 aud Bul|jas BuljoXoay pue S Ayanooay saunso|9 pue ‘boy ssauisng GLA 9102 €D sales
Slide 25: Containerboard Packaging nine-month performance
For exponents on the graphics, see definitions on page 19. operating income variance analysis by segment is shown in each business segment review (refer to pages 38 to 45). APPENDIX (CONTINUED) INFORMATION FOR THE 9-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016 BUSINESS SEGMENT REVIEW PACKAGING PR
Slide 26: Containerboard Packaging YTD sales variance
GLA ZL02 €0 sles 1,212 cs $NVO X/4 > BWUN|OA XIW 2 adud Bulyjas saunsojo pue ‘boy ssaulsng GLA 9102 €0 sales
Slide 27: Containerboard Packaging YTD results
Shipments 2 ('000 s.t.) 20% 855 1,029 Average Selling Price (CAN$/unit) 1,209 1,178 -3% — Sales ($M) 17% 1,034 1,212 Operating income ($M) (as reported) 130 113 -13% (adjusted) 1 -8% 131 121 OIBD 1 ($M) (as reported) 172 165 -4% % of sales 17% 14% (adjusted) 1 173 173 — % of sales 17% 14% For expone
Slide 28: Boxboard Europe YTD sales variance
LO aS co GLA ZL02 €0 sales $NVO X/4 xIW 9 aoud Bulyjas awN|o,, GLA 9102 €0 sales
Slide 29: Boxboard Europe YTD results
Shipments 2 ('000 s.t.) 6% 803 850 Average Selling Price 3 (CAN$/unit) 754 737 -2% (Euro€/unit) 511 507 -1% Sales ($M) 3% 605 626 Operating income ($M) (as reported) 16 23 44% (adjusted) 1 33% 18 24 OIBD 1 ($M) (as reported) 40 48 20% % of sales 7% 8% (adjusted) 1 42 49 17% % of sales 7% 8% For expo
Slide 30: Specialty Products YTD sales variance
GLA L102 €D sales alnsojo ssauisng S8OURLIEA J8YIO 12 XIW 2 add Bulljas BuljoAoay pue Alano0ay 87 s 3S sale: S GLA 9102 £0 sees
Slide 31: Specialty Products YTD results
Sales ($M) 17% 464 542 Operating income ($M) (as reported) 37 37 — (adjusted) 1 12% 33 37 OIBD 1 ($M) (as reported) 52 53 2% % of sales 11% 10% (adjusted) 1 48 53 10% % of sales 10% 10% For exponents on the graphics, see definitions on page 19. Corporation incurred some specific items in the first n
Slide 32: Tissue Papers YTD sales variance
GLA 102 €0 sales AWN|OA, $NVO X/4 S@OURLIEA JAY Xiu °g eoud Bulljes GLA 9102 €D sales
Slide 33: Tissue Papers YTD results
Shipments 2 ('000 s.t.) -4% 464 447 Average Selling Price (CAN$/unit) 2,126 2,166 2% — Sales ($M) -2% 986 967 Operating income ($M) (as reported) 63 34 -46% (adjusted) 1 -49% 74 38 OIBD 1 ($M) (as reported) 109 78 -28% % of sales 11% 8% (adjusted) 1 120 82 -32% % of sales 12% 8% For exponents on the