INVESTOR PRESENTATION: KEYBANC BASIC MATERIALS & PACKAGING CONFERENCE … · 2020-01-27 · KEYBANC BASIC MATERIALS & PACKAGING CONFERENCE - BOSTON September 13, 2017. DISCLAIMER

INVESTOR PRESENTATION:

KEYBANC BASIC MATERIALS & PACKAGING CONFERENCE -BOSTON

September 13, 2017

DISCLAIMER

2

FORWARD-LOOKING STATEMENTCertain statements in this presentation, including statements regarding future results and performance, are forward-looking statements within the meaning of securities legislationbased 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 fromthose projected, including, but not limited to, the effect of general economic conditions, decreases in demand for Cascades Inc.’s (“Cascades,” “CAS,” the “Company,” the“Corporation,” “us” or “we”) products, the prices and availability of raw materials, changes in the relative values of certain currencies, fluctuations in selling prices and adversechanges 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 thereader with a better understanding of the trends related to our business activities. These items are based on the best estimates available to the Corporation.

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES – SPECIFIC ITEMSThe Corporation incurs some specific items that adversely or positively affected its operating results. We believe it is useful for readers to be aware of these items, as they provideadditional information to measure the performance, compare the Corporation's results between periods and to assess operating results and liquidity, notwithstanding these specificitems. Management believes these specific items are not necessarily reflective of the Corporation underlying business operations in measuring and comparing its performance andanalyzing future trends. Our definition of specific items may differ from those of other corporations and some of them may arise in the future and may reduce the cash available to us.

They include, but are not limited to, charges for (reversals of) impairment of assets, restructuring gains or costs, loss on refinancing of long-term debt, some deferred tax assetsprovisions or reversals, premiums paid on long-term debt refinancing, gains or losses on the acquisition or sale of a business unit, gains or losses on the share of results of associatesand joint ventures, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps, foreignexchange gains or losses on long-term debt, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.

RECONCILIATION OF NON-IFRS MEASURESTo provide more information for evaluating the Corporation's performance, the financial information included in this analysis contains certain data that are not performance measuresunder IFRS (“non-IFRS measures”) which are also calculated on an adjusted basis to exclude specific items. We believe that providing certain key performance measures and non-IFRS measures is useful to both management and investors as they provide additional information to measure the performance and financial position of the Corporation. It alsoincreases the transparency and clarity of the financial information. The following non-IFRS measures are used in our financial disclosures:

- Operating income before depreciation and amortization (OIBD): Used to assess operating performance and contribution of each segment when excluding depreciation &amortization. OIBD is widely used by investors as a measure of a corporation ability to incur and service debt and as an evaluation metric.

- Adjusted OIBD: Used to assess operating performance and contribution of each segment on a comparable basis.- Adjusted operating income: Used to assess operating performance of each segment on a comparable basis.- Adjusted net earnings: Used to assess the Corporation‘s consolidated financial performance on a comparable basis.- Adjusted free cash flow: Used to assess the Corporation’s capacity to generate cash flows to meet financial obligation and/or discretionary items such as share repurchase,

dividend increase and strategic investments.- Net debt to adjusted OIBD ratio: Used to measure the Corporation's credit performance and evaluate the financial leverage.

Non-IFRS measures are mainly derived from the consolidated financial statements but do not have meanings prescribed by IFRS. These measures have limitations as an analyticaltool, and should not be considered on their own or as a substitute for an analysis of our results as reported under IFRS. In addition, our definitions of non-IFRS measures may differfrom those of other corporations. Any such modification or reformulation may be significant.

All amounts in this presentation are in Canadian dollars unless otherwise indicated.

Please click here for the 2016 supplemental information on non-IFRS measures.Please click here for the Q2 2017 supplemental information on non-IFRS measures.

http://www.cascades.com/media/multiuploader_images/5/22/72/SupplementalinformationonNonIFRSMeasures2016_1.pdf

https://www.cascades.com/media/multiuploader_images/89/20/82/SupplementalInformationonNonIFRSMeasuresQ22017.pdf

31 Including joint ventures. 2 Via our 57.7% equity ownership in Reno de Medici S.p.A. (RdM) 3 As of September 8, 2017

INVESTMENT THESIS

50+ Years of

Production &

Focus on

Sustainable

Development

& Innovation

• Founded in 1964 by the Lemaire brothers in Kingsey Falls, Quebec,

Canada

• 89 facilities1, 11,000 employees, operations in Canada, US & Europe2

• 80% of Cascades’ products are made with recycled fibres

• “Closed-Loop” business model: Recovery & Recycling →

Manufacturing → Converting → Customers

Publicly

Traded for

over 30 Years

• 94.7 M common shares (~ 30% held by founders & directors)

• Market cap3: CAN$1.34 B; TSX avg. volume3: 251,000 shares

• S&P/TSX Composite Index (added June 19/17), S&P/TSX Clean

Technology Index, S&P/TSX Small Cap Index, BMO Small Cap Index

• Corporate credit ratings: Moody’s: Ba2 (Stable), S&P: BB- (Stable)

Diversified

Player, Strong

Competitive

Positioning

Cascades’ has leading market positions in our targeted focus areas:

# 6 containerboard producer in North America

# 5 tissue producer in North America

# 2 coated recycled boxboard producer in Europe1

# 1 paper collector in Canada, top 10 worldwide

4

INVESTMENT THESIS

WHERE WE’VE BEEN….

We repositioned, invested & restructured over 2011 – 2016

• Invested more than $500M in modern equipment

• $125M in annual working capital savings

• Refocused our NA platform on growing packaging & tissue segments

WHERE WE ARE GOING….

We are focused on strategic growth & capital allocation over 2017 – 2022:

• Organic growth, increasing integration, optimizing our footprint, investing in state of the art equipment

• Monetize important benefits from significant IT & internal processes optimizations

• Continue to differentiate via innovation, customer focus, our sustainable product offerings

51 Cascades has a 57.7% equity ownership in Reno de Medici S.p.A. (RdM)

INVESTMENT THESIS

Allan Hogg

VP & CFO

Cascades Inc.25+ years with Cascades

Mario Plourde

President & CEO

Cascades Inc.30+ years with Cascades

Charles MaloPresident & COO

26 years with Cascades

Luc LangevinPresident & COO


Jean JobinPresident & COO


Michele BianchiPresident & CEO

Joined RdM in 2016

17 years of industry experience

Containerboard Boxboard Europe1 Specialty Products Tissue Papers

Senior Management team has a combined 140+ years of industry experience

6

✓ Revenues: $4.0 B (+6.2% 5-yr CAGR)

✓ Adj. EBITDA: $403 M (+9.0% 5-yr CAGR)

✓ Adj. CF Ops.: $324 M (+20.2% 5-yr CAGR)

✓ Net debt reduced by 11% to $1.5 B

✓ Net debt/Adjusted EBITDA1: 3.8x

1 Via 57.7% equity ownership in Reno de Medici S.p.A. (RdM)2 Pro-forma for the consolidation of Greenpac on a LTM basis. Supplemental information on non-IFRS measures for 2016 and Q2-2017.

INVESTMENT THESIS

Sales by Segment

% before inter-segment sales

2016 SALES TO (DESTINATION)

2016 SALES FROM(SOURCE)

34%

19%16%

31%Containerboard

Boxboard Europe1

Specialty Products

Tissue Papers

39%

39%

22%

51%

28%

21% Europe1

U.S.

Canada

LTM Q2-2017

sales

$4,136M

Financial Metrics

Financial Metrics

✓ Shipments: 3,124 (‘000 s.t.)

✓ Adjusted EBITDA2 margin: 8.9%

✓ ROCE: 3.8%

✓ Working capital (% of sales): 10.5%

✓ Net debt/Adjusted EBITDA2: 4.2x

Sales by Geography2016

LTM Q2-17

Export: ~ 25% of our Canadian sales



7

1 Via our 57.7% equity

ownership in Reno de

Medici S.p.A. (RdM)

1

INVESTMENT THESISInternational Footprint Provides Geographic Diversification

82016 capacity. 1 Including joint ventures. 2 Via our 57.7% equity ownership in Reno de Medici S.p.A. (RdM) 3 Containerboard capacity includes Greenpac Mill capacity of 540,000 s.t.

INVESTMENT THESISPaper & Packaging Provides Operational Diversification

6 Manufacturing 4 Canada / 2 US 1.53 M s.t.

18 Converting 14 Canada / 4 US 12.6 million ft

7 Manufacturing 2 Canada / 5 US 380,000 s.t.

10 Converting 2 Canada / 8 US –

4 Manufacturing/Converting 3 Canada / 1 US 270,000 s.t.

5 Recycled boxboard 3 Italy / 1 Germany / 1 France 885,000 m.t.

1 Virgin boxboard France 165,000 m.t.

2 Manufacturing Canada 165,000 s.t.

6 Consumer product packaging 4 Canada / 2 US 58.9 M Kg

11 Industrial packaging 5 Canada / 4 US / 2 Europe 353,000 s.t.

19 Recovery & Recycling facilities 16 Canada / 3 US 1.37 M s.t.

Containerboard1,3

→ 24 facilities

Tissue1

→ 21 facilities

Europe2

→ 6 facilities

SpecialtyProducts1

→ 38 facilities

TYPE OF

FACILITY

ANNUAL

CAPACITY

FACILITY

LOCATION

BUSINESS

SEGMENT

9

Packaging End Markets Tissue End Markets

4%

42%

22%

15%

17%

Retail -branded

Retail -private label

Afh -branded

AfH -private label

Parent rolls

44%

21%

19%

10%

6%Food &Beverage

Papers &Wood

Other

Chemicals &Plastics

Agriculture &Meat

INVESTMENT THESISDiversified End Markets & Customer Base

% of 2016 N.A. Sales of Corrugated Boxes by Industry % of 2016 N.A. Sales by Market

10

✓ Full implementation of linerboard and medium price increases in containerboard

✓ Benefits from business process modernization and implementation of ERP platform

✓ Ramp-up of new state of the art tissue converting facility in Oregon

✓ New containerboard facility in NJ with expected start-up in Q2/18

✓ Announced price increases in European Boxboard division

INVESTMENT THESIS

✓ Fluctuations in raw material pricing – OCC, SOP, pulp

✓ Increased competitiveness and capacity additions in tissue segment

✓ Over-supply in hand towel jumbo roll segment

✓ Rumored and announced plant conversions in containerboard

✓ Canadian dollar exchange rate – USD and euro

Tailwinds

Headwinds

FINANCIAL OVERVIEW

11

72

176

137153

221

162

2.3%

5.2%

3.8% 4.0%

5.5%

3.9%

0.0%

2.0%

4.0%

6.0%

8.0%

0

50

100

150

200

250

2012 2013 2014 2015 2016 LTMQ2-17

285342 340

426 403367

9.1%10.1% 9.5%

11.0%10.1%

8.9%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

020406080100120140160180200220240260280300320340360380400420440460

2012 2013 2014 2015 2016 LTMQ2-17

12

OPERATING PERFORMANCE AND FINANCIAL SITUATIONStrong Financial Profile

3,1413,370

3,5613,861

4,001 4,136

2500

3000

3500

4000

4500

2012 2013 2014 2015 2016 LTMQ2-17

CAGR: + 6.3%

Sales (CAN$ M) Operating Income & Margin (CAN$ M and %)

CAGR: + 19.7%

1 Supplemental information on non-IFRS measures for 2016 and Q2-2017.

Adjusted OIBD1 & Margin (CAN$ M and %)

CAGR: + 6.5%

Adjusted Free Cash Flow per Share1(CAN$)

($0.28)

$0.78 $0.86

$1.58

$1.20

$0.85

2012 2013 2014 2015 2016 LTMQ2-17



713

324

561

52

169

1 year >1 year 2021 2022 2023

Senior notes Revolver

Debts without recourse Subsidiaries debts

Bank debt financial covenant ratios: Net funded debt to capitalization < 65% (currently at 47.60%), interest coverage ratio > 2.25x (currently at 3.98x).1 Supplemental information on non-IFRS measures for 2016 and Q2-2017.2 OIBD to interest expense.3 Pro-forma for the consolidation of Greenpac on a LTM basis. Leverage ratio stands at 3.5x on a pro-forma basis following sale of Boralex investment in July 2017.

13

Revolving credit facility pushed from 2019 to 2021

5.0x 4.6x 4.7x4.0x 3.8x 4.2x

2012 2013 2014 2015 2016 Q22017

3.0x 3.4x 3.4x

4.7x 4.6x 4.7x

2012 2013 2014 2015 2016 Q22017

Net Debt / LTM Adjusted OIBD1 Interest Coverage Ratio2

Long-Term Debt Maturities (as at June 30, 2017)Net Debt1 / Net Debt + Total Equity

58% 57%

62%64%

59%

54%

2012 2013 2014 2015 2016 Q22017

Weighted Average

Interest Rate of

5.32% in 2016

OPERATING PERFORMANCE AND FINANCIAL SITUATIONConsolidated Financial Ratios & Debt Maturities

33



5.8x

5.0x

4.6x 4.7x

4.0x 3.8x

3.2x

2.4x 2.2x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x20

11

2012

2013

2014

2015

2016

2017

E

2018

E

2019

E

The $288 M of proceeds from the sale of our equity stake in Boralex on

July 27, 2017, will enable us to achieve our leverage target ratio in 2017

14

1 Based on Street’s adjusted OIBD estimates $428 million for 2017 and $521 million for 2018. Assuming stable adjusted OIBD for 2019 ($521 million), FX US$/CAN$ at 1.25 and $100

million of free cash flows dedicated to debt reduction annually. Greenpac Mill included on a twelve month pro-forma basis. 2017e also takes into consideration the sale of our equity

stake in Boralex.

1

11

OPERATING PERFORMANCE AND FINANCIAL SITUATIONNear-Term Leverage Target of 3.0x – 3.5x

50

75

100

125

150

175

200

Ju

ne

14

Se

pt

14

Dec 1

4

Ma

r 1

5

Ju

ne

15

Se

pt

15

Dec 1

5

Ma

r 1

6

Ju

ne

16

Se

pt

16

Dec 1

6

Ma

r 1

7

Ju

ne

17

Se

pt

17

(US$/ton)Recycled Fibre Prices

White grades (Basket of products) Brown grades (OCC)

Recovered Paper Prices Q2-2016 Q1-2017 Q2-2017 Q2/Q2 Q2/Q1

White grades - Basket of products (Northeast average)1 154 182 181 +17% -1%

Brown grades - OCC No. 11 (Northeast average) 88 142 148 +68% +4%

Virgin Pulp Prices

NBSK (Canadian sources delivered to Eastern US) 980 1,033 1,093 +12% +6%

NBHK (Canada/US sources delivered to Eastern US) 847 853 942 +11% +10%

700

800

900

1,000

1,100

1,200

Ma

y 1

4

Au

g 1

4

Nov 1

4

Fe

b 1

5

Ma

y 1

5

Au

g 1

5

Nov 1

5

Fe

b 1

6

Ma

y 1

6

Au

g 1

6

Nov 1

6

Fe

b 1

7

Ma

y 1

7

Au

g 1

7

(US$/ton)Virgin Pulp Prices

NBSK NBHK

RAW MATERIAL COSTS – INDEX LIST PRICES

15Source: RISI. 1 Basket of white recycled paper, including grades such as SOP, Hard White Envelope and Coated Book Stock; Northeast average.

Weighted average based on Cascades’ consumption of each grade.

Current

(Sept.)

155

1791,100

975

Current

(August)

Q2 recovered paper prices remained elevated as strong domestic & foreign demand persisted

BUSINESS OVERVIEW

16

17

▪ Largest corrugated box producer in Canada with

~32% market share

▪ 64%1 integration rate, targeting 85%1 in the mid-term

▪ Strong platform in Canada and growing presence in

U.S. Northeast

▪ Annual capacity of 1,531K s.t.(including Greenpac):

✓ 84% recycled vs. 16% virgin

✓ 53% linerboard vs. 47% medium

▪ 2013-LTM Q2-17 sales CAGR: +8.7%

1,0951,181

1,301 1,370 1,466

104 108

170 158135150 164

231 216 202

0

100

200

300

400

0

400

800

1,200

1,600

2013 2014 2015 2016 LTMQ2-17

Sales Operating Income Adj. OIBD

CONTAINERBOARD PACKAGING GROUPA Leading Canadian and Major North American Player

8%

15%

61%

16%Manufacturing - CAN

Manufacturing - US

Converting - CAN

Converting - US

2016

Sales

$1,370M

LTM Q2-17 adjusted OIBD2 margin of 14%

1 Including associates and JVs and Greenpac. 2 Supplemental information on non-IFRS

measures for 2016 and Q2-2017. 3 EBITDA margin including Greenpac on a pro-forma basis:

15.6% in 2014, 21.3% in 2015, 18.5% in 2016 and 15.7% in LTM Q2-17.

Strong Asset Base Improving Results

13.7%13.9%

17.8% 15.8% 13.8%

& Margin32

Not including Greenpac Mill.

CAN $ M

71% Canada ; 28% US; 1% other



• Product differentiation: Greenpac XP grades

represent majority of total production

• Take-or-pay agreement for 81% of the mill’s output

• Partners: 1 pension fund, 2 independent converters

• As of Q2/17: ownership increased to 62.5% from

59.7%, and Greenpac results are consolidated

18

CONTAINERBOARD PACKAGING GROUPModernizing and Upgrading - Organic Growth

1 Mill capacity at 515,000 tons based on 90% production of lightweight products compared to initial stated capacity of 540,000 tons.3 Q2/17, including associates and JVs and Greenpac.

• New state of the art conversion facility housing

1st quartile equipment

• US$80 M project largely funded by sale of land of

NYC plant (scheduled to close by end of 2018);

property is currently listed for US$72 M

• Corrugator capacity: 2.4 billion ft2

• Q2/18 start-up planned, with focus in 1st year of

operation to ramp up 1.5 billion ft2 to accommodate

business transferred from Cascades’ other US

northeast plants and new customers

• When fully ramped-up, operation will increase

integration rate by 5%, from current 64%3

New Conversion Plant in

Piscataway, NJ

Largest recycled

linerboard mill in

North America

→ 1,4251 st/day

→ 26 pounds

19

CONTAINERBOARD PACKAGING GROUPConsolidated North American Competitive Landscape

Smurfit Stone 20%

❖ Weyerhaeuser 16%

IP 11%

GP 11%

Temple Inland 9%

PCA 6%

Cascades1 3%

Others 24%

Top-5 67%

IP 35%

❖ Rock Tenn 20%

Koch/GP 11%

PCA 7%

Cascades1 4%

Pratt 3%

Kapstone 2%

Others 18%

Top-5 77%

IP 33%

❖ WestRock 19%

Koch/GP 10%

PCA 9%

Kapstone 4%

Cascades1 4%

Pratt 4%

Others 17%

Top-5 75%

2007 2013 2016

% of total capacity

Source: RISI, Deutsche Bank, Company reports and estimates, Fibre Box Association, Paper Packaging Canada1 Including Greenpac Mill in 2016 and 2013. Greenpac was not in operation in 2007

60%

70%

80%

90%

100%

Q22010

Q22011

Q22012

Q22013

Q22014

Q22015

Q22016

Q22017

44.0

42.0

40.0

38.0

36.02019e2018e New

capacity

1.0

2017e New

capacity

41.90.9

42.9

41.0

New

capacity

0.4

2016e

40.6

New

capacity

0.6

2015e

40.0

20

Fundamentals Sound Despite Added Capacity

Industry Operating Rates1

1 Source: RISI, Deutsche Bank, RBC, Company reports and estimates. New

capacity, net of capacity shutdowns.

Pratt Yr 2

Greif Yr 2

IP Valliant Yr 2

SP Fiber Yr 2

Corr. Supplies

WestRock shuts

Productivity 0.8%

Kruger Yr 2

Corr. Sup. Yr 1

PCA Yr 1

McKinley Yr 1

Productivity 0.8%

(+1.5%) (+1.0%) (+2.2%) (+2.4%)

Cascades adjusted EBITDA increases ~$2.5M

with every 1% increase in our utilization rate

CONTAINERBOARD PACKAGING GROUPSound Environment

Kruger Yr 1

Productivity 0.8%

Corr. Sup. Yr 2

PCA Yr 2

McKinley Yr 2

Productivity 0.8%

• Capacity growth of ±1.8% annually

over 2015 - 2019 period

• Sound industry fundamentals (July/17):

✓ YTD capacity utilization: 97.1% (97.9% in July)

✓ Inventories: 2% above 10 year avg.

✓ 3.7 weeks of supply below 10 year avg. of 3.9

• US$50/st containerboard price increase

being implemented on rolls and boxes

• US$30/st corrugating medium price

increase reflected in July (US$20/st) &

August (US$10/st) RISI publications

Industry Expected Capacity1 (M s.t.)

0

20

40

60

80

100

120

140

160

180

200

Se

p 0

7

Mar

08

Se

p 0

8

Mar

09

Se

p 0

9

Mar

10

Se

p 1

0

Mar

11

Se

p 1

1

Mar

12

Se

p 1

2

Mar

13

Se

p 1

3

Mar

14

Se

p 1

4

Mar

15

Se

p 1

5

Mar

16

Se

p 1

6

Mar

17

Se

p 1

7

Old corrugated containers no. 11 (Northeast)

Old corrugated containers no. 11 (Midwest)

(US$/s.t.)

300

350

400

450

500

550

600

650

700

750

Au

g 0

7

Fe

b 0

8

Au

g 0

8

Fe

b 0

9

Au

g 0

9

Fe

b 1

0

Au

g 1

0

Fe

b 1

1

Au

g 1

1

Fe

b 1

2

Au

g 1

2

Fe

b 1

3

Au

g 1

3

Fe

b 1

4

Au

g 1

4

Fe

b 1

5

Au

g 1

5

Fe

b 1

6

Au

g 1

6

Fe

b 1

7

Au

g 1

7Linerboard 42-lb. unbleached kraft, Eastern U.S.

Corrugating medium 26-lb. semichemical, Eastern U.S.

(US$/s.t.)

21Source: RISI

CONTAINERBOARD PACKAGING GROUPBusiness Drivers

Containerboard Benchmark Market Prices Brown Grades Recycled Fibre Prices

US$50/st containerboard price increase

reflected in RISI of April 2017;

US$30/st medium price increase

reflected in RISI of July and August 2017

OCC up US $70/st in Q1/17, and $6/st in Q2/17 due

to strong domestic and foreign demand; Price rose

$15/st in July, was flat in August, and decreased by

$10/st in September RISI publications.

22

CONTAINERBOARD INDUSTRY STATISTICS

U.S. Corrugated Boxes Shipments (BSF)

345357 359 360 360 364 369

376384

392 399408 414

2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

RISI Forecast

U.S Containerboard Production & Utilization Capacity Rate (tons & %)

31,517 33,766 34,024 34,371 34,823 35,354 35,822 36,316 37,430 38,472 39,359 40,520 41,352

80%

85%

90%

95%

100%

105%

0

10,000

20,000

30,000

40,000

50,000

2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

2017 – 2021 CAGR: + 1.9%

2017 – 2021 CAGR: + 2.5%RISI Forecast

Source: FBA, RISI

78%

22%Coatedrecycledboxboard

Coatedvirginboxboard

23

▪ 57.7% equity ownership of Reno de Medici, a public

Italian company; 5 recycled (885K m.t.) & 1 virgin

boxboard (165K m.t.) mills

▪ Operations in Italy, France and Germany

▪ Simplified structure and investments made in

modernization

▪ Completed legal transfer of Cascades’ virgin mill in

France to RdM in Q2-2016

2016

Sales

$796M


BOXBOARD EUROPE GROUPSecond Largest Coated Recycled Boxboard Producer in Europe

1 Supplemental information on non-IFRS measures for 2016 and Q2-2017.2 Including $9 million of energy credits.

Steady Contributor to Results

786841 825 796 804

1129

(28)

19 22

5772

6353 55

-40

-20

0

20

40

60

80

100

120

0

200

400

600

800

1,000

2013 2014 2015 2016 LTMQ2-17


7.3%8.6%

7.6%6.7% 6.8%

& Margin1

CAN $ M

2

32% Italy; 21% France; 12% Eastern Europe; 11% Germany,

Austria & Switzerland; 12% Western Europe; 12% Overseas



0 500 1000 1500

Mayr-Melnhof

Reno De Medici

Weig Karton

Smurfit Kappa

Buchmann

Fiskeby Board

Barcelona Cartonboard

KappaStar

Pulp Mill Holding

Paprinsa

24

BOXBOARD EUROPE GROUPLeading European Producer of Coated Board

1 Source: PÖYRY, 2016, Reno de Medici. Capacity in 1,000 t/a. SBS = Solid Bleached Sulphate (virgin); FBB = Folding Boxboard (virgin); CUK = Coated Unbleached Kraft (virgin);

WLC = White Lined Chipboard (recycled); LPB = Liquid Packaging Board (virgin).

Cartonboard Producers by Grade1 (2016) WLC Producers1 (2016)

25

▪ Largest paper collector in Canada with 19 facilities

and 1.4 million s.t. of material processed in 2016

▪ A leading position in industrial packaging with

Cascades Sonoco JV

▪ Strong growth potential in consumer packaging

▪ 2016 sales (IFRS) of $620M, vs. $819M (Non-IFRS)

with JVs at 100%

▪ 2013-LTM Q2-17 sales CAGR: +6.1%

SPECIALTY PRODUCTS GROUPA Diversified Packaging Player

46%

30%

24%

Recovery

Industrialpackaging

Consumerproductspackaging

2016

Sales

$620M



Focusing on Growth Sectors

548 568 579620

675

166

31

51 53

41 40

5865

73

0

20

40

60

80

100

0

100

200

300

400

500

600

700

800

2013 2014 2015 2016 LTMQ2-17


7.5% 7.0%

10.0%10.5%

10.8%

& Margin1

CAN $ M

53% Canada; 38% US; 9% Europe & other



26

Spot

25%

SPECIALTY PRODUCTS GROUPCascades Recovery+ Sub-Segment

• Business unit created via the merger of

recovery operations & recycled fibre

buying group

• Manages procurement of all raw material

fibre for Cascades’ North American

operations

31%

11%

4%

16%

38%

Brown recycled purchased

White recycled purchased

Recycled groundwoodpurchased

Recycled fibre collected &USED by CAS

Recycled fibre collected &SOLD by CAS

• We use 29% of the 1.4M st of recycled fibre that

we collect via our Recovery operations

• Out of the 2.6M st of recycled fibre that we collect

& purchase externally, we use 62% internally, and

sell the remaining 38% to external customers

NA Recycled Fibre1

(2.6M st)

(1.0M st) (0.8M st)

(0.3M st)

(0.1M st)

(0.4M st)

1 North America only.

CIRCULAR ECONOMY APPROACH

27

▪ 5th largest tissue producer in NA based on capacity

(650K s.t.)

▪ Growing footprint in Western U.S.

▪ 68% integration rate, targeting 85% in the mid-term

▪ Repositioned and rebranded AfH product lines under

Cascades PRO brand to simplify product offering

▪ Launched new Cascades consumer tissue paper lines in

Canada: Fluff™ and Tuff™ brands

▪ 2013-LTM Q2-17 sales CAGR: +6.9%

TISSUE PAPERS GROUPA Canadian Leader and Important North American Player

46%

37%

17% Retail

Away-from-Home

Parent rolls

2016

Sales

$1,305M



Targeting 13% OIBD Margin Near Term

1,033 1,054

1,2361,305 1,305

106

4864 75

63

133

96119

150135

0

50

100

150

200

250

0

400

800

1,200

2013 2014 2015 2016 LTMQ2-17


12.9%

9.1%9.6%

11.5%10.3%

& Margin1

CAN $ M



9,571 9,838 9,883 10,227 10,522267 45 344 295

0

2,500

5,000

7,500

10,000

12,500

2013 2016 2017e 2018e 2019e

80

100

120

140

160

1996 2000 2004 2008 2012 2016

Inde

xed

U.S

. T

issu

e

Dem

and

281 Source: RISI

CAS Sales by Country (2016)

CAS North American Sales by End Markets (2016)

Tissue Market Demand1

North American Tissue Capacity Additions1

(M s.t.)

(+0.9%/year) (+0.0%) (+3.5%) (+2.9%)

TISSUE PAPERS GROUPStrong Position Across the North American Tissue Market

4%

42%

22%

15%

17%Retail - branded

Retail - private label

Afh - branded

AfH - private label

Parent rolls

Private

Label57%

At-Home

58%

Private

Label73%

At-Home

53%

Branded

43%

Away-from-

Home42%

Branded

27%Away-from-

Home47%

Canada (25%) US (75%)

NA Tissue sales:

~ 75% recycled and ~ 25% virgin

29

TISSUE PAPERS GROUPNewest investment: Converting Facility in Oregon

• Expands tissue footprint on US West Coast

• US$64M investment

• 40% integration with St. Helens, OR tissue paper

plant, located ~12 km away, resulting in a ~9%

increase in overall integration rate to 78%

• State-of-the-art facility, with annual production

capacity of 5.2 M cases or ~ 58,000 s.t. of

finished product• Manufactures virgin & recycled bathroom

tissue products and paper hand towels for

the US AfH market

• 3 production lines are installed and in

production

• Fully commissioned at the end of Q2/17,

on schedule

30

2016 NORTH AMERICAN TISSUE MANUFACTURERS

Capacity

('000 s.t.)

Market

Share

Capacity

Retail

Capacity

AfH

1 Georgia-Pacific 2,849 29% 67% 33%

2 Procter & Gamble 1,494 15% 100% 0%

3 Kimberly-Clark 1,466 15% 67% 33%

4 SCA Tissue NA 784 8% 0% 100%

5 Cascades Tissue 650 7% 62% 38%

6 Clearwater Paper 435 4% 90% 10%

7 KP Tissue 400 4% 77% 23%

8 First Quality Tissue 319 3% 100% 0%

9 Irving Tissue 282 3% 100% 0%

10 ST Paper & Tissue 160 2% 0% 100%

Others 1,044 10%

TOTAL 9,883 100%

Source: RISI

TISSUE PAPERS GROUPDiversified Capacity and Positioning

0

50

100

150

200

250

300

350

Se

p 0

7

Mar

08

Se

p 0

8

Mar

09

Se

p 0

9

Mar

10

Se

p 1

0

Mar

11

Se

p 1

1

Mar

12

Se

p 1

2

Mar

13

Se

p 1

3

Mar

14

Se

p 1

4

Mar

15

Se

p 1

5

Mar

16

Se

p 1

6

Mar

17

Se

p 1

7

Sorted office papers no. 37 (Northeast)

Sorted office papers no. 37 (Midwest)

(US$/s.t.)

800

900

1,000

1,100

1,200

1,300

1,400

1,500

Jul 07

Jan

08

Jul 08

Jan

09

Jul 09

Jan

10

Jul 10

Jan

11

Jul 11

Jan

12

Jul 12

Jan

13

Jul 13

Jan

14

Jul 14

Jan

15

Jul 15

Jan

16

Jul 16

Jan

17

Jul 17Virgin parent rolls

Recycled parent rolls

(US$/s.t.)

31Source: RISI

TISSUE PAPERS GROUPBusiness Drivers

Tissue Papers Benchmark Market Prices White Grades Recycled Fibre Prices

After years of volatility, parent roll prices have

remained relatively stable since 2015

The recent increase is partially due to lower

levels of material generation

32

52%

33%

7%

7%

1%

N.A. Retail Tissue Product Consumption (2016)

Bathroomtissue

Toweling

Facial

Napkins

Sanitary

44%

34%

18%

2% 2%

N.A. Away-from-Home Tissue Product Consumption (2016)

Toweling

Bathroomtissue

Napkins

Facial

Sanitary

Source: RISI

TISSUE PAPERS GROUPNorth American Tissue Market

Towel and bathroom tissue products account for majority of tissue consumption

2017-2022 STRATEGIC PLAN

33

34

POSITIONING FOR GROWTHBuilding on the Past, Positioning for the Future

Consolidation of

Reno De Medici

2011 2012 2013 2014 2015 2016

Sale of

DopacoSale of

Fine Papers

Sale NA

Boxboard

activities

Start-up of the

Greenpac Mill Start-up of

the Wagram

tissue plant

New tissue paper

machine in Oregon

Acquisition of

a corrugated

box plant in

Connecticut

Consolidation

of Recovery

ownership

Acquisition of

Papersource

WE MODERNIZED

• Invested more than $500M in

modern equipment

WE OPTIMIZED

• $125M in annual savings by

improving working capital

WE RESTRUCTURED

• Closed 16 non-performing

assets, completed 6 asset sales,

exited industries and

consolidated operational

platforms in NA representing

$1B in sales, 2% EBITDA margin

WE INNOVATED

• Launched many new products

2011 - 2016

35

0

50

100

150

200

250

2012 2013 2014 2015 2016 2017B

(M$)

Containerboard Boxboard Europe Specialty Products

Tissue Papers Corporate & IT

Capital Expenditures

• 2017B Capex ~ $200M

✓ Mainly growth Capex

✓ Mostly in the US

• Strong free cash flow has

funded Capex

• Impacted by strong US$

• Important investments made in

Tissue Papers (2013-15) and

in Containerboard (2012-13)

• Significant IT & administrative

process modernization

$161M

$184M$173M

$206M $200M


$184M

36


UPGRADE OUR PLATFORMS

- Invest in organic growth

- Increase integration rate to 85%

- Grow US platform

- Optimize geographic footprint

VALUE CREATION

- Increase profitability margin from 10% to 15%

- Disciplined capital allocation

- Sustainable free cash flow generation

- Continued focus on debt reduction

INNOVATION & CUSTOMER FOCUS

- 2020: 20% of sales from innovative products

- Leverage our diversified portfolio to cross-sell

- Reinforce positioning as THE provider of sustainable packaging and tissue products

-

-

-

2017 – 2022

FOCUS AREAS

2017 – 2022

STRATEGY

1 2

3

37

UPGRADE OUR PLATFORMS1

Accelerate Modernization

• Replace older equipment

• Invest in organic growth

Drummondville, QC

Scappoose, OR

64%1

68%1

85%2

85%2

1Q2 2017 integration rate including associates, joint ventures and Greenpac. 2 Including associates, joint ventures. Containerboard integration including Greenpac.

• Increase our integration rate

by investing in conversion

capacity

Increase Integration

• Improve geographic footprint

to better serve our customers,

increase penetration of

national accounts

Grow our US platform &

geographic footprint

Optimize Footprint+ +

Tissue

Containerboard

38

CREATE VALUE2↑ Profitability Margin to 15%

• Consolidate Greenpac results

(Q2/17)

• New Oregon tissue conversion

facility

• Monetize the benefits of our

optimization, modernization and

restructuring efforts

• Transformation program benefits &

reduction of implementation costs

±$50 M ANNUALLY

• Growth associated with potential

strategic investments and

acquisitions

1

3

4

2

Cash Flow from Operations

INVEST IN OUR ASSET BASE

• Modernize equipment

• Opportunistic M&A

• Increase integration, optimize footprint

DIVIDENDS & SHARE REPURCHASES

• Maintain current strategy

DEBT REDUCTION

• Objective = allocate at least $100M of

FCF toward debt reduction annually

• Near-term leverage ratio target of

3.0 x - 3.5 x

Disciplined Capital Allocation+

39

FOCUS ON CUSTOMERS AND INNOVATION3

Polystyrene foam

packaging

containing 25%

recycled material

Low-density PETE

containing 80% post-

consumer material

OBJECTIVE: 20% of sales from innovative products in 2020

Water-based coating that

acts as a barrier against

grease and humidity for

takeout containers

Recyclable insulated

container, made with

FSC® certified

recycled materials

Produces innovative, lightweight

recycled linerboard – XP grades

Hand towel dispenser

with new, patented

dispenser technology

APPENDIX

40

2016 2017

Q1 Q2 Q3 Q4 Year Q1 Q2 LTM

Financial results

Sales 1,003 998 1,021 979 4,001 1,006 1,130 4,136

Operating income 73 65 50 33 221 31 48 162

Adjusted OIBD1

106 112 103 82 403 75 107 367

Net earnings 75 36 20 4 135 161 323 508

Adjusted net earnings1

34 35 30 15 114 12 24 81

Net earnings per share $0.79 $0.38 $0.21 $0.04 $1.42 $1.70 $3.41 $5.36

Adjusted net earnings per share1

$0.35 $0.38 $0.32 $0.16 $1.21 $0.13 $0.25 $0.86

(In millions of CAN$, except amount per share)

41

Net earnings of $323 million or $3.41 per share in Q2 2017 reflects

revaluation gain on Greenpac acquisition

6550

33 3148

112 10382 75

107

Q22016

Q32016

Q42016

Q12017

Q22017

Operating Income Adjusted OIBD

36 20 4

161

323

35 30 15 12 24

Q22016

Q32016

Q42016

Q12017

Q22017

Net Earnings Adjusted Net Earnings


1 1

Figures above in millions of CAN$ Figures above in millions of CAN$

Q2 2017 PERFORMANCE – FINANCIAL RESULTS



19 166

31

51 53

3% 3%1%

5%

8% 8%

0%1%2%3%4%5%6%7%8%9%

0

10

20

30

40

50

60

2012 2013 2014 2015 2016 LTMQ2-17

1 Including $9 million of energy credits 2 Via our 57.7% equity ownership in Reno de Medici S.p.A. (RdM)

92106

4864

75639%

10%

5% 5% 6%5%

0%

2%

4%

6%

8%

10%

12%

0

20

40

60

80

100

120

2012 2013 2014 2015 2016 LTMQ2-17

(13)

104 108

170 158135

(1%)

9% 9%

13%12%

9%

-4%-2%0%2%4%6%8%10%12%14%

-100

-50

0

50

100

150

2012 2013 2014 2015 2016 LTMQ2-17

311

29

(28)

19 22

0% 1%

3%

(3%)

2% 3%

-5%

-3%

-1%

1%

3%

5%

-40-30-20-10

010203040

2012 2013 2014 2015 2016 LTMQ2-17

42

Containerboard (CAN$ M and %) Boxboard Europe2(CAN$ M and %)

Tissue Papers (CAN$ M and %)Specialty Products (CAN$ M and %)

BUSINESS SEGMENTSHistorical Segmented Operating Income and Margin

1

37 41 40

5865

73

7%7% 7%

10% 10% 11%

4%5%6%7%8%9%10%11%12%

01020304050607080

2012 2013 2014 2015 2016 LTMQ2-17

1 Including $9 million of energy credits 2 Via our 57.7% equity ownership in Reno de Medici S.p.A. (RdM)3 Supplemental information on non-IFRS measures for 2016 and Q2-2017.

138 133

96119

150135

14%13%

9% 10%

11%10%

4%

6%

8%

10%

12%

14%

16%

020406080

100120140160

2012 2013 2014 2015 2016 LTMQ2-17

90

150 164

231216 202

10%

14% 14%

18%16%

14%

5%7%9%11%13%15%17%19%

0

50

100

150

200

250

2012 2013 2014 2015 2016 LTMQ2-17

43

57

7263

53 55

6%

7%

9%

8%

7% 7%

3%

4%

5%

6%

7%

8%

9%

01020304050607080

2012 2013 2014 2015 2016 LTMQ2-17

43

Containerboard (CAN$ M and %) Boxboard Europe2(CAN$ M and %)

Tissue Papers (CAN$ M and %)Specialty Products (CAN$ M and %)

BUSINESS SEGMENTSHistorical Segmented Adjusted OIBD3 and Margin

1



(In million of Canadian dollars) Q2-17 Q1-17 2016 Q4-16 Q3-16 Q2-16 Q1-16 2015 2014

Sales

Containerboard 428 346 1,370 336 356 342 336 1,301 1,181

Boxboard Europe 213 211 796 191 189 197 219 825 841

Specialty Products 188 173 620 156 158 157 149 579 568

Tissue Papers 338 306 1,305 319 342 324 320 1,236 1,054

Inter-segment sales and corporate activities (37) (30) (90) (23) (24) (22) (21) (80) (83)

Total 1,130 1,006 4,001 979 1,021 998 1,003 3,861 3,561

Operating Income

Containerboard 30 33 158 28 44 46 40 170 108

Boxboard Europe 13 5 19 3 1 7 8 (28) 29


Tissue Papers 17 8 75 12 26 18 19 64 48

Corporate activities (26) (28) (82) (24) (33) (22) (3) (84) (54)

Total 48 31 221 33 50 65 73 153 137

Adjusted OIBD1

Containerboard 56 45 216 43 58 60 55 231 164

Boxboard Europe 21 14 53 11 9 17 16 63 72


Tissue Papers 35 23 150 30 47 39 34 119 96

Corporate activities (25) (25) (81) (19) (29) (20) (13) (45) (32)

Total 107 75 403 82 103 112 106 426 340

Adjusted OIBD1 Margin 9.5% 7.5% 10.1% 8.4% 10.1% 11.2% 10.6% 11.0% 9.5%

44

HISTORICAL RESULTS




45

NEAR TERM OUTLOOK

+

I

• Higher OCC costs in North America and

Europe

• Other recovered paper prices in North

America and Europe remain high

• NBSK and NBHK pulp prices remain high

• Appreciation of the CAN$ vs US$

• Gradual price increase in corrugated boxes

following the US$50/st containerboard price

increase reflected in RISI in April 2017

• US$20/st corrugating medium price increase

reflected in RISI in July 2017

• €40/mt recycled boxboard (WLC) price

increase in Europe, effective September 1,

2017

• Slightly lower energy costs

Q3-2017 vs

Q2-2017

Boxboard

Europe

Operating

Income

Impact

Containerboard

Operating

Income

Impact

Specialty

Products

Operating

Income

Impact

Tissue Papers

Operating

Income

Impact

Volume Slight decrease Slight increase Slight increase Slight increase

Average selling

pricesSlight increase Increase Stable Slight increase

Average raw material

costsSlight increase Slight increase Slight increase Slight increase

CAN$ exchange rate Stable Appreciation Appreciation Appreciation

Energy costs Stable Slight decrease Slight decrease Slight decrease

46

CONTAINERBOARD PACKAGING GROUPGreenpac Mill Acquisition – Accounting Factsheet

Fact Sheet

• Interest of one partner classified in other liabilities due to put option

• Cascades share of profit before tax

• Minority interest

• Client list and amortizable fixed assets increase

• Goodwill addition

• Net debt increase

• Provision for income tax calculated on 62.5% of profit before tax

• Including one equity partner classified as liability, interest expense up $5 million

on a quarterly basis (including $2 million non-cash)

78.3%

21.7%

$53 million

$256 million

$219 million

50%

150%

250%

350%

450%

550%

2012

-09

2012

-12

2013

-03

2013

-06

2013

-09

2013

-12

2014

-03

2014

-06

2014

-09

2014

-12

2015

-03

2015

-06

2015

-09

2015

-12

2016

-03

2016

-06

2016

-09

2016

-12

2017

-03

2017

-06

2017

-09

Cascades TSX Composite Index TSX Small Cap Index Containerboard Index Tissue Index

5-YEAR SHAREHOLDER RETURNCAS vs. Indices

47

CASTSX

Composite

TSX

Small Cap

Container-

board Index

Tissue

Index

1 Year 123% 104% 97% 127% 81%

3 Year 235% 97% 91% 113% 81%

5 Year 294% 121% 101% 208% 103%

Note: Shareholder return excludes dividend yield. As of market close September 8, 2017. Source: Bloomberg1 Containerboard Index includes the following companies: International Paper, WestRock (starting June 24, 2015), Packaging Corp of America and KapStone.2 Tissue Index includes the following companies: Kimberly-Clark, Clearwater Paper, KP Tissue (starting December 13, 2012) and Orchids Paper.

1 2

CAS added to the TSX Composite Index June 19, 2017

48

SHAREHOLDERS & ANALYST COVERAGE

Major Shareholders %

Lemaire Brothers, BoD & employees 33.7%

Letko Brosseau 14.2%

Caisse de Dépôt et Placement du QC 5.0%

Dimensional Fund Advisors 3.4%

Norges Bank (Government of Norway) 1.8%

Royal Bank of Canada 1.5%

Vanguard Group 1.4%

IA Financial Group 1.2%

SEI Investments 0.8%

Boston Partners 0.5%

Putnam Investments 0.4%

BlackRock 0.3%

33.7%

41.8%

24.5%

Lemaire brothers, BoD &CAS employees

Institutional

Retail

Ownership Breakdown1

Analyst City Bank

Leon Aghazarian Montréal National Bank

Keith Howlett Toronto Desjardins

Benoît Laprade Montréal Scotiabank

Hamir Patel Vancouver CIBC

Paul Quinn Vancouver Royal Bank of Canada

Sean Stuart Toronto TD Bank

50.0%50.0%

Sector Outperform

Sector Perform

Analyst Recommendations1

1 As of September 8, 2017 . Source: Bloomberg, InfoSuite

49

For more information:www.cascades.com/investors

Jennifer Aitken, MBA

Director, Investor Relations

514-282-2697 or [email protected]

Documents

INVESTOR PRESENTATION: KEYBANC BASIC MATERIALS & PACKAGING CONFERENCE … · 2020-01-27 · KEYBANC BASIC MATERIALS & PACKAGING CONFERENCE - BOSTON September 13, 2017. DISCLAIMER