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CASCADES INC.
Institutional Investor Meeting –
Toronto & Boston
January 26-27, 2015
DISCLAIMER
Certain statements in this presentation, including statements regarding future results and performance, are forwardlooking statements within the meaning of securities legislation based on current expectations. The accuracy of such
statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ
materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in
demand for the Corporation’s products, the prices and availability of raw materials, changes in the relative values of
certain currencies, fluctuations in selling prices and adverse changes in general market and industry conditions. This
presentation may also include price indices as well as variance and sensitivity analyses that are intended to provide the
reader with a better understanding of the trends related to our business activities. These items are based on the best
estimates available to the Corporation.
The financial information included in this presentation also contains certain data that are not measures of performance
under IFRS (“non-IFRS measures”). For example, the Corporation uses earnings before interest, taxes, depreciation and
amortization (EBITDA) because it is the measure used by management to assess the operating and financial
performance of the Corporation’s operating segments. Such information is reconciled to the most directly comparable
financial measures, as set forth in the “Supplemental Information on Non-IFRS Measures” section of our most recent
quarterly report or annual report.
Specific items are defined as items such as charges for or reversal of impairment of assets, for facility or machine
closures, accelerated depreciation of assets due to restructuring measures, debt restructuring charges, gains or losses
on sales of business units, unrealized gains or losses on derivative financial instruments that do not qualify for hedge
accounting, foreign exchange gains or losses on long-term debt and other significant items of an unusual or nonrecurring nature.
All amounts in this presentation are in Canadian dollars unless otherwise indicated.
2
COMPANY OVERVIEW
Balance Play in Healthier Sectors of the Paper Industry
• Founded in 1964 by the Lemaire Family and
headquartered in Kingsey Falls, QC
FY 2013 Net Sales $3.6 billion1
Segment Sales Breakdown 1
• The Lemaire Family still owns ~33% of
the shares
• Unique culture – green visionaries,
turnarounds, entrepreneurial philosophy
• Produces, converts and markets packaging
and tissue products principally composed of
recycled fiber
• Balanced play in less cyclical sectors
• Heavy exposure to two of the strongest
paper segments: Tissue Papers and
Containerboard
• Close to 12,000 employees worldwide
Containerboard
15%
36%
Tissue Papers
21%
Boxboard Europe
Specialty Products
28%
Note: Represents Sales before Corporate & Other
Geographic Sales Breakdown (Sales to) 1
Canada
24%
38%
38%
United States
Europe and Other
Countries
1 Excluding discontinued operations of Fine Papers Division, Djupafors mill and East
Angus kraft paper mill. Including North American boxboard activities (~$200M in sales).
3
COMPANY OVERVIEW
Leading Packaging and Tissue Paper Manufacturer
Packaging Products
LTM 9/30/14
Financials3
Market Position
Containerboard
• Leading containerboard
producer in Canada
Boxboard Europe
• # 2 producer in Europe
Tissue Papers
Specialty Products
• Largest paper collector in
Canada
• # 6 containerboard
producer in North America
• Leading tissue paper
producer in Canada
• # 4 tissue paper producer
in North America
• 36% of Sales1
• 22% of Sales1
• 15% of Sales1
• 27% of Sales1
• 43% of EBITDA1,2
• 20% of EBITDA1,2
• 10% of EBITDA1,2
• 27% of EBITDA1,2
• EBITDA Margin: 12%
• EBITDA Margin: 10%
• EBITDA Margin: 7%
• EBITDA Margin: 10%
1 Before inter-segment sales and corporate activities
2 Excluding specific items
3 Excluding discontinued operations of Fine Papers Division, Djupafors mill and East Angus kraft paper mill. Including North American boxboard activities.
4
COMPANY OVERVIEW
Closed-loop Business Model
Recovery
• 20 units
Manufacturing2
77% recycled fibre (3.0M tons)
NA integration rate (2013):
27% (0.55M tons)
CLIENTS
• Containerboard
• Boxboard Europe:
• Specialty Products:
• Tissue Papers:
8 units
7 units
3 units
12 units
30 units
NA integration rate (2013):
• Containerboard1
55%
• Tissue Papers
70%
Finished Products
Converting2
• Trims and rejects sent to
recycling centers
• Containerboard:
• Specialty Products:
• Tissue Papers:
25 units
17 units
15 units
57 units
Upstream and downstream integration in North America
1 Integration rate for our containerboard activities in North America (excluding boxboard activities and considering 100% of Greenpac’s production as internal capacity)
2 Including Reno De Medici’s units and Greenpac. Also including 7 manufacturing/converting tissue papers units which are counted in both Converting and Manufacturing. Including North
American boxboard activities.
5
BUSINESS DRIVERS
Price Dynamics
Containerboard - Selected Benchmarks
Tissue Papers - Selected Benchmarks
(US$/s.t.)
(US$/s.t.)
750
1,600
700
1,500
650
1,400
600
1,300
550
1,200
500
1,100
450
1,000
Linerboard 42-lb (transaction price)
400
Corrugating medium 26-lb (transaction price)
Virgin parent rolls
Recycled parent rolls
• Prices relatively stable since early 2013
Dec-06
May-07
Oct-07
Mar-08
Aug-08
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
800
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
350
900
• Recent uptick but market still under pressure:
• Additional capacity coming to market
• Reasonable recovered paper prices
Source: RISI
6
BUSINESS DRIVERS
Shipments1
Containerboard
(s.t.)
360
300
337 337
334
340
324
320
300
314
298 293 296
309
260
260
200
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
45
40
267
Specialty Products 2
263
42 41 42
257
249
247
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Tissue Papers
(s.t.)
160
47
283
240
220
(s.t.)
290
286 287
280
280
50
Boxboard Europe
(s.t.)
45
40 41 41 41
150
140
35
130
30
120
25
110
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
149
147
141 143
153
153
140
138
130
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
1 Excluding discontinued operations of the Fine Papers division, the Djupafors mill and the East Angus kraft paper mill. Including North American boxboard activities.
2 Industrial Packaging, deinked pulp and vinyl backing activities only
7
BUSINESS DRIVERS
Foreign Exchange Rates
Foreign exchange – Historical
Foreign exchange – Forecasts
Euro€/CAN$
1.05
1.00
0.95
0.90
0.85
0.80
0.75
0.70
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
Q4 11
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
US$/CAN$
US$/CAN$
Euro€/CAN$
Average 1
Q1 15
Q2 15
Q3 15
Q4 15
2016
CAN$/US$
1.17
1.18
1.19
1.19
1.17
CAN$/EURO
1.41
1.41
1.40
1.40
1.39
• Sensitivity to a change of $0.01CAN vs.
$US
• EBITDA = $4M to $5M
• Debt = $7M to $8M
A weak Canadian dollar will help our cash flow generation
Source: Bloomberg
1 Average of six largest Canadian banks
8
BUSINESS DRIVERS
Costs
Costs of sales by nature (LTM Q3-2014)1
North American Fiber List Prices
(US$/ton)
Jan 15
Oct 14
July 14
Apr 14
Jan 14
Oct 13
July 13
Apr 13
Jan 13
White Grades (SOP)
Brown Grades (OCC)
(US$/ton)
1,050
950
850
750
NBSK
Jan 15
Oct 14
July 14
Apr 14
Jan 14
Oct 13
July 13
Apr 13
Jan 13
Oct 12
July 12
650
Apr 12
Raw materials
Chemicals and production supplies
Wages and employee benefits expenses
Energy
Freight
Depreciation and amortization
Others
Oct 11
18%
13%
Oct 12
9%
July 12
Oct 11
8%
Apr 12
34%
Jan 12
6%
300
250
200
150
100
50
Jan 12
12%
NBHK
Raw materials account for nearly half of COGS
Source: RISI
1 COGS excluding discontinued operations of the Fine Papers division, the Djupafors mill and the East Angus kraft mill. Including North American boxboard activities.
9
RAW MATERIALS
Asian Demand for Recovered Papers
US OCC exports to China – Historical
China OCC imports – Historical
800
1750
650
1500
500
1250
350
1000
200
750
Jan 09
May 09
Sept 09
Jan 10
May 10
Sept 10
Jan 11
May 11
Sept 11
Jan 12
May 12
Sept 12
Jan 13
May 13
Sept 13
Jan 14
May 14
Sept 14
Jan 15
(‘000 s.t.)
Jan 09
May 09
Sept 09
Jan 10
May 10
Sept 10
Jan 11
May 11
Sept 11
Jan 12
May 12
Sept 12
Jan 13
May 13
Sept 13
Jan 14
May 14
Sept 14
Jan 15
(‘000 s.t.)
« Projections of rising OCC prices have
become an industry dogma. Unfortunately,
the data do not square with the dogma. »
« OCC has yet to hit its floor with January
prices down … recent decline in OCC has
been linked to waning demand from China »
Mark Wilde, BMO
Debbie Jones, Deutsche Bank
Source: RISI
10
RAW MATERIALS
Reliable Sourcing Strategy
Cascades’ North American Recycled Fiber Supply
Top Recovered Paper Suppliers in the World
(M Tonnes)
Cascades
Recovery and
Internal
28%
2013
Cascades
currently controls
over 60% of its
fiber supply
Contractual
Agreement
35%
Spot
Purchase
37%
6
5
4
3
2
1
0
Source: RISI
Our Strategy
• Short term:
• constant review of our inventory strategy
• Long term:
•
•
•
•
ensure control over fiber supply with potential increase of tons under control
develop substitute grades
potential to increase virgin content in certain circumstances
continue to close the loop with customers retailers
11
CONTAINERBOARD
Attractive Market Conditions
North American Containerboard Producers
Fundamentals strong despite added capacity
2014 Industry Participants
Operating Rates
% of total capacity







IP
Rock Tenn
Koch/GP
PCA
Kapstone
Cascades 1
Pratt
Others
33%
20%
10%
9%
4%
4%
3%
17%
Top-5 Producers
76%
100%
90%
80%
70%
60%
Q4
2007
Q4
2009
Q4
2010
Q4
2011
Q4
2012
Q4
2013
Q4
2014
Capacity
(Million s.t.)
1.0
42.0
1.0
41.0
0.9
40.0
39.0
0.6
38.4
38.0
SP Fiber
Atlantic Yr 1
Norampac Yr 1
Productivity 1%
37.0
2012
Source: RISI, Deutsche Bank, Company reports and estimates
1 Including 59.7% of Greenpac’s total capacity
Q4
2008
39.0
SP Fiber
PCA D3 Yr 1
Atlantic Yr 2
Norampac Yr 2
Productivity 1%
39.9
2 SP Fiber
PCA D3 Yr 2
Pratt
Greif Yr 1
IP Valliant Yr 1
Productivity 1%
41.9
40.9
Pratt
Greif Yr 2
IP Valliant Yr 2
SP Fiber Yr 2
Productivity 1%
New 2013e New 2014e New 2015e New 2016e
capacity
capacity
capacity
capacity
12
CONTAINERBOARD
Our Strategic Move: Greenpac
• Largest recycled linerboard mill in NA:
1,500 s.t./day of lightweight recycled linerboard
(26 pounds)
• Product differentiation
• State-of-the-art equipment
• Take-or-pay agreement for 81% of the mill’s output
• Significant ownership at 59.7%1:
Greenpac
EBITDA
(M$)
• Partners include a pension fund and
two independent converters
LTM EPS
Value per share
using 7x
2
EBITDA multiple
$0.32
60
80
100
Sensitivity
Impact on
Cascades
EPS
±10
1 Greenpac is not consolidated in the results and balance sheet since Cascades does not have effective control under IFRS
2 For illustration purposes only. Value by segment do not necessary reflect the Corporation’s view on their respective value
$0.08
$0.15
$0.23
$0.76
$1.65
$2.54
± $0.45
13
CONTAINERBOARD
Greenpac’s XP Product: A Real Advantage
• New breed of maximum strength performance linerboard
• One of the best sustainable option for fiber reduction
• Through a fiber segregation process, longer and stronger fibers directed to the top layer to
increase the resistance to tearing and cracking while retaining outstanding printing surface
• A thin film of starch is then applied to both fiber plies with a size press, dried and calendared
• The process enhances the cross-directional compression strength of the linerboard and
improves the smoothness of the sheet
• Currently offered in 5 strength categories (from 26lbs to 35lbs); capacity to go as low as 20lbs
Starch layer
Top ply: 100% long and strong recycled fibers
Bottom ply: 100% recycled fibers
Starch layer
XP Product increasing compression strength by ~12% % over regular
high performance grades in North America
14
BOXBOARD EUROPE
Stronger and Leaner Production Platform
• ~58% ownership of RdM, a public Italian company, and 100% of the La Rochette mill in France
• Rationalization of production capacity (from 10 machines to 7 and closure of Djupafors mill) and
consolidation of sales forces have resulted in improved performance
• Structure simplification and modernization investments are improving the position on the cost curve
#2 Producer of Boxboard in Europe
Boxboard Europe Group’s
EBITDA and EBITDA Margin
(M CAN$)
100
81
80
La Rochette
(165K tons GC)
60
40
20
57
41
6%
10%
43
6%
7%
8%
6%
4%
2%
0
0%
2011
Source: Reno de Medici’s public disclosure
10%
2012
2013
LTM
Q3 2014
: energy credits totaling $5M in 2013 and $8M in LTM Q3 2014
15
TISSUE PAPERS
Industry Trends
Future capacity additions CAGR of 1.5%, close to
annual consumption growth
211 9,393
9,400
511 9,182
9,200
First Quality (2)
St. Croix Tissue
9,000
8,800
157 8,671
8,600
8,400
149 8,514
8,365
8,200
SCA
Cascades
Double Tree
Orchids Paper
Confidential (2)
First Quality
von Drehle Corp.
St. Croix Tissue
P&G
8,000
2009
New 2011 New 2013 New 2015 New 2017
capacity
capacity
capacity
capacity
North American Tissue Producers
% of total capacity





Koch/GP
P&G
Kimberly-Clark
Cascades
SCA
Others
Total - 2014
30%
15%
15%
7%
6%
27%
8,792
New capacity has more impact on brands but trickles-down to other products
Source: RISI, Company reports and estimates
16
TISSUE PAPERS
Extended Geographical Reach
Sales End-Users (2013)
• AfH (40%)
• Private Label (44%) / Branded (56%)
• Retail (45%)
• Private Label (86%) / Branded (14%)
• Parent Rolls (15%)
New 55k tons
machine
St-Helens, OR
- Manufacturing
- Manufacturing
Kingman, AZ
- Conversion
Retail
Away-from-Home
Whitby, ON
- Manufacturing
Scarborough, ON
- Manufacturing
Toronto, ON
- Conversion
Candiac, QC
- Manufacturing and Conversion
Granby, QC
- Conversion
Kingsey Falls, QC
- Manufacturing and Conversion
Lachute, QC
- Manufacturing and Conversion
Laval, QC
- Conversion
Eau Claire, WI
- Manufacturing
and Conversion
Waterford, NY
- Conversion
Mechanicville, NY
- Manufacturing
Brownsville, TN
- Conversion
Memphis, TN
- Manufacturing
Rockingham, NC
- Manufacturing
Wagram, NC (New Site)
- Conversion
Kinston, NC
- Conversion
Ransom, PA
- Manufacturing
Pittston, PA
- Conversion
New 10M
cases facility
Sales to (2013)
• Canada (30%)
• US (70%)
17
TISSUE PAPERS
Our Market Positioning
Product Category Overview
Our Portfolio of Products
BRAND RECOGNITION
Entry Level
BEST
Retail National
Brand
AfH Branded
High End
CONSUMER
PRODUCTS CANADA
extreme
BETTER
GOOD
AfH Private
Label
LOW
Retail Private
Label
MEDIUM
AWAYFROM-HOME
PRODUCTS
HIGH
VIRGIN FIBRE CONTENT
Our market presence
Moving Towards High-end Quality Products
18
SPECIALTY PRODUCTS GROUP1
Stable Source of Revenue and Unique Platform for Innovation
• Diverse and stable revenue stream with leading market positions
• Recent initiatives have included
• Sale of Fine Papers division (3 units)
• Exit from the kraft paper market (1 unit)
• Disposal of a smaller unit (1 unit)
Industrial Packaging Products (~40% of sales)
• Leading producer of papermill packaging
• 12 units
• JV Share of EBITDA $10-$15M
Recycling and Recovery (~35% of sales)
• Largest recycled paper collector in Canada
through 73% interest in Cascades
Recovery
• 20 units
1 Including 100% of joint ventues
Consumer Packaging Products (~15% of sales)
• Largest producer of honeycomb in
Canada
• 6 units
Other Products (~10% of sales)
• 2 units
• Vinyl backing
• Deinked pulp
19
OTHER INVESTMENT
Boralex Inc.
• Publicly traded independent power producer
EBITDA - Boralex1
• Legacy ownership
• Following the recent transaction,
ownership of ~28 %
• A smaller portion of a bigger pie
• Enterprise value: $1,480M
• Market capitalization: $599M
• Strong potential of growth
• Solid pipeline of projects
• Sizeable footprint in Europe
1 Results presented on a proportional consolidation basis; refer to Boralex website for more details
20
OUR STRATEGIC ACTION PLAN
1
Modernize
core operations through
focused investments
2
Optimize
capital allocation and
reduce working capital
(M CAN$)
(M CAN$)
400
300
365
100
CFFO
EBITDA
Focus on operations to drive increased
profitability and operating cash flows
230
200
0
239
250
300
200
150
132
100
2011 1
LTM 09/30/2014
50
1
3
4
Restructure
underperforming units
2011 1
LTM 09/30/2014 1
Innovate
to improve and develop
processes and products
EBITDA excluding specific items
1 Excluding discontinued operations of Fine Papers Division, Djupafors mill and East Angus kraft paper mill. Including North American boxboard activities.
21
1
MODERNIZE
Containerboard –
Manufacturing
• Construction of the Greenpac linerboard mill in Niagara Falls, NY
Containerboard –
Converting
• Consolidation of the platform in Ontario
• Recent investments in Québec
Tissue Papers –
Manufacturing
• Installation of a new paper machine in Oregon (Q4-2014)
Tissue Papers –
Converting
• Additional converting capacity in Arizona and North Carolina
Boxboard Europe –
Manufacturing
• Rebuild of a paper machine at Santa Giustina mill
Corporate
• ERP platform
22
2
OPTIMIZE
Corporate initiative –
Improving working capital management
16.0%
14.0%
LTM Working Capital (% of LTM Sales)
14.8%
14.4%
14.0% 13.5%
13.1% 12.9% 12.9%
12.7% 12.6%
12.0%
Allocate capital towards core sectors –
Tissue papers example
• Acquisition and conversion of Boise paper
machine adjacent to our existing tissue
machine
• Increase capacity by 55,000 tons on a
faster timeline and a lower cost per ton
• Improve overall operating efficiency of
the mill and market reach
10.0%
8.0%
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Working capital includes accounts receivable (excluding the short term portion of other assets) plus
inventories less accounts payable.
• US$40M cost and start-up in Q4-2014
• Installation of a new tissue converting
facility in Wagram, NC
• Increase presence in the fast growing
Southeastern US area
• US$45M cost with start-up in Q4-2014
23
3
RESTRUCTURE
15 closures
• Containerboard:
• 1 manufacturing mill + 5 converting plants
• Boxboard North America:
• 1 converting plant
• Boxboard Europe:
• 3 mills + 1 paper machine
• Specialty Products:
• 1 pulp mill, 1 industrial packaging plant and
1 specialty paper mill
7 asset sales
• Containerboard – Manufacturing
• Avot-Vallée mill
• Boxboard
• Manufacturing - Versailles mill
• Converting - Dopaco business, Hebron plant
• 5 units in Canada
• Specialty Products
• Fine papers division
• Other small unit
• Tissue:
• 1 napkin plant
24
4
INNOVATE
Cascades®
Antibacterial Towels
UltratillTM
EVOKTM
Made from 100%
recycled fibre.
Special agent activated
by water.
Kills over 99.99% of
harmful bacteria1.
Low-density PETE
containing 80% of postconsumer material.
Polystyrene foam packaging
using recycled material.
Some activities aim to achieve 10% of sales from new products
1 Based on third party laboratory testing.
25
FINANCIAL PERFORMANCE AND SITUATION
Strong Financial Momentum
Sales1
EBITDA (excl. specific items)1
(M CAN$)
(M CAN$)
4,000
400
341
3,742
3,750
294
300
3,584
365
12.0%
10.0%
230
3,500
200
8.0%
3,250
100
6.0%
3,000
0
3,345
2011
3,376
2012
2013
LTM 09/30/2014
4.0%
2011
2012
2013
LTM 09/30/2014
• On December 11, 2014, Cascades announced the sale of its boxboard activities in North America:
• Transaction expected to close during Q1-2015
• Sales of $231M and EBITDA of $4M (LTM 09/30/2014)
Results progressed as productivity, FX and pricing environment improved
1 Excluding discontinued operations of Fine Papers Division, Djupafors mill and East Angus kraft paper mill. Including North American boxboard activities.
26
FINANCIAL PERFORMANCE AND SITUATION
Historical Segmented EBITDA1
Containerboard
(M CAN$)
56
42
42
28
26 25 25
46
(% of sales)
43
50
33
33
14
0
20%
28
15%
21
10%
14
5%
7
0%
0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Specialty Products
(M CAN$)
12
8
12
12
11 12
6
9
9
8
10
4
0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
23 24
(% of sales)
16%
20
12 11 12 11
12%
14
6
8%
4%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
(% of sales)
16
Boxboard Europe
(M CAN$)
Tissue Papers
(M CAN$)
12%
44
9%
33
6%
22
3%
11
0%
0
35 31
29
33
(% of sales)
20%
39
32
32
20
23
15%
10%
5%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
EBITDA excluding specific items
1 Excluding discontinued operations of Fine Papers Division, Djupafors mill and East Angus kraft paper mill. Including North American boxboard activities.
27
FINANCIAL PERFORMANCE AND SITUATION
Investment Program
• Capital expenditures for 2014 to reach ~$180M
(including IT)
• 2015 level to be lower (~$135M, including IT)
• Including ~$60-70M of maintenance capex
• Amount subject to change depending on
operating results and economic conditions
• Mostly dedicated towards tissue activities
Capital Expenditures Distribution
for FY2013 - $157M
(excluding IT)
By segment
Specialty
Products
14%
Tissue
papers
30%
Containerboard
28%
Corporate
10%
Boxboard
Europe
18%
Gradual capex program to improve asset base
28
FINANCIAL PERFORMANCE AND SITUATION
Managing our Debt During our Modernization Phase
+8%
1 700
1 600
115
1 640
FX
Net Debt
30/09/2014
-1%
1 535
345
1 525
1 500
1 400
1 300
50
1 200
39
1 100
(405)
(39)
1 000
Net Debt
31/12/2012
Cash flow
from
operations
Sale of
assets
Dividends Var. in nonCapital
Net debt
paid, shares cash work. investments
after
buyback &
cap.
& others
continuing
others
components
operations
29
FINANCIAL PERFORMANCE AND SITUATION
Financial Ratios and Maturities
Net debt / LTM EBITDA
Interest Coverage Ratio
7.0x
6.0x
5.0x
5.8x
4.0x
5.0x
5.0x
4.6x
4.5x
4.0x
3.0x
3.4x
3.5x
2013
LTM
09/30/2014
3.0x
2.5x
2.0x
3.0x
1.0x
2011
2012
2013
LTM
09/30/2014
2011
Net Debt / Net Debt + Total Equity
2012
Long-Term Debt Maturities
65%
700
60%
60%
56%
58%
57%
616
525
55%
350
50%
175
374
277
39
250
75
0
45%
2011
2012
2013
LTM
09/30/2014
1 year >1 year
2016
Senior notes
Debts without recourse
2020
2021
2022
Revolver
Subsidiaries debts
Net debt to EBITDA ratio should continue to improve in 2015
Cascades’ bank debt financial covenant ratios: Net funded debt to capitalization < 65% (currently at 58%), interest coverage ratio > 2.25x (currently at 3.24x)
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SELECTED PERFORMANCE INDICATORS
Selected Performance Indicators
Shipments ('000 s.t.)
2011
1
2012
1
2013
1
Q3-2014 LTM
excl. disc. op.
3,159
3,243
3,359
3,114
12,126
12,123
12,221
11,518
86
83
85
79
3,625
3,645
3,849
3,742
42
44
45
47
229
304
352
365
EBITDA Margin (excl. specific items)
6.3%
8.3%
9.1%
9.8%
EPS (excl. specific items)
(0.14)
0.05
0.31
0.32
CFFO (M$)
126
161
226
239
Net Debt / EBITDA
5.8x
5.0x
4.6x
4.5x
ROCE
1.3%
2.8%
4.0%
4.4%
Employees
Units (excl. Recovery) 2
Sales (M$)
Sales / Unit (M$)
EBITDA (excl. specific items) (M$)
Improvement on all fronts since the start of our strategic plan
Discontinued operations consist of Fine Papers Division, Djupafors mill and East Angus kraft paper mill Including North American boxboard activities.
1 As reported
2 Including Reno De Medici’s units and Greenpac as well as joint ventures
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POTENTIAL BENEFITS STEMMING FROM OUR INITIATIVES
Modernizing our operating platform to increase profitability



• ±$140M capex program per year, including ERP upgrade
• Divestitures and closures of under-performing units
• Containerboard: great fundamentals and improved platform
• Modernized converting platform and manufacturing productivity improvement
• Greenpac to positively contribute to EPS in 2015
• Tissue Papers: strong and growing position in North America
• Increasing presence in the US with recent expansion initiatives
Other sources of growth and incremental value
• Culture of innovation
• Good performance from European platform and hidden value of Boralex investment
• On-going initiatives to improve our business processes
Potential tailwinds
•
•
•
•
CAD$ weakness
Economic recovery in Canada, the US and Europe
Chinese’s economy weakness and impact on recovered paper prices
Lower oil and gas costs
Taking the right steps to position Cascades for the future
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