Cascades Inc. · TSX:CAS
Cascades — Q4 2021 Earnings Presentation
31 slides from Cascades's earnings presentation, Feb 24, 2022
Slide 1: Q4 2021 Financial Results
Q4 2021 FINANCIAL RESULTS February 24, 2022
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: Summary of Quarterly Financial Results
SUMMARY OF QUARTERLY FINANCIAL RESULTS 105 104 139 122 98 73 107 62 73 44 23 42 22 29 32 3 8 (90) (1) (9) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Operating Income (loss) Adjusted OIBD 1 Net Earnings Adjusted Net Earnings (loss) 1 Figures above in millions of C
Slide 4: Historical Segmented Quarterly Operating Income & Adjusted OIBD
HISTORICAL SEGMENTED QUARTERLY OPERATING INCOME (LOSS) & ADJUSTED OIBD1 Containerboard (millions of CAN$) 122 110 108 100 94 65 64 70 58 43 Tissue Papers (millions of CAN$) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 40 29 20 10 12 Operating Income Adjusted OIBD 1 — 1 (6) Specialty Products (millions of
Slide 5: Historical Segmented Quarterly Shipments
HISTORICAL SEGMENTED QUARTERLY SHIPMENTS Containerboard ('000 s.t. and % capacity utilization1) 399 391 385 377 368 97% 97% 96% 94% 89% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Tissue Papers ('000 s.t. and % capacity utilization1) 152 138 148 145 123 86% 84% 85% 80% 78% Q4 2020 Q1 2021 Q2 2021 Q3 202
Slide 6: Raw Material Costs - Index List Prices
RAW MATERIAL COSTS - INDEX LIST PRICES ($ US/s.t.) Recycled Fibre Prices Current ($ US/s.t.) Virgin Pulp Prices Current (Jan-22) (Dec-21) 250 225 1,800 200 1,600 1,450 175 194 150 1,400 1,245 140 125 1,200 100 75 1,000 50 800 25 0 600 Feb 18 Feb 19 Feb 20 Feb 21 Aug 17 Aug 18 Aug 19 Aug 20 Aug 21 No
Slide 7: Packaging Products / Containerboard
PACKAGING PRODUCTS / CONTAINERBOARD Results Change vs. Comments on sequential performance Q4 2021 Q3 2021 Q4 2020 è Total shipments decreased by 2% sequentially. Shipments of parent rolls decreased by Shipments ('000 s.t.) 4% while those of converted products decreased by 1% on a sequential basis. T
Slide 8: Tissue Papers
TISSUE PAPERS Results Change vs. Comments on sequential performance Q4 2021 Q3 2021 Q4 2020 è Shipments decreased by 2% on a sequential basis in the fourth quarter. This reflects a Shipments ('000 s.t.) 1% increase in shipments of converted products and a 16% decrease in external 145 (2)% (5)% shipm
Slide 9: Packaging Products / Specialty Products
PACKAGING PRODUCTS / SPECIALTY PRODUCTS Results Change vs. Comments on sequential performance Q4 2021 Q3 2021 Q4 2020 è Sales increased by 5% sequentially. Price increases in response to cost inflation Sales (M$) contributed positively in all business segments. These were partly offset by volume 151
Slide 10: Discontinued Operations
DISCONTINUED OPERATIONS On July 5, 2021, the Corporation announced the monetization of its 57.6% controlling equity interest in Reno de Medici S.p.A. (RDM) for an amount per share of €1.45, or $462 million including foreign exchange contracts and before related transaction fees of $12 million. The t
Slide 11: Year Over Year Sales Reconciliation
YEAR OVER YEAR SALES RECONCILIATION (M CAN$) -0% 1,200 66 15 1,100 1,030 (3) (26) 1,028 1,000 (54) 900 Sales Recovery & Sales (M CAN$) Q4 20201 Price & Mix Recycling Other F/X CAN$ Volume Q4 2021 Containerboard 500 51 — — (10) (39) 502 Specialty Products 123 28 — — (4) 4 151 Tissue Papers 381 (14) —
Slide 12: Sequential Sales Reconciliation
SEQUENTIAL SALES RECONCILIATION -0% (M CAN$) 1,075 29 4 1,050 (2) 1,030 1,028 1,025 (31) 1,000 Sales Sales (M CAN$) Q3 2021 Price & Mix Other F/X CAN$ Volume Q4 2021 Containerboard 507 8 — — (13) 502 Specialty Products 144 14 — — (7) 151 Tissue Papers 344 7 (1) — (11) 339 Corporate & Elim. 35 — 5 (2
Slide 13: Year-over-Year Operating Income Reconciliation
YEAR-OVER-YEAR OPERATING INCOME RECONCILIATION + Higher selling prices and favourable mix + Higher realized spreads and more favourable sales mix - Higher raw material and operational costs - Lower volumes - Higher raw material and operational + Lower production costs costs - Higher energy costs and
Slide 14: Sequential Operating Income Reconciliation
SEQUENTIAL OPERATING INCOME RECONCILIATION + Higher selling prices and favourable mix of products sold + Higher selling prices and favourable mix - Slightly lower volume - Higher operational costs - Higher raw material and production costs - Lower volume (M CAN$) - Higher raw material costs 150 63 1
Slide 15: Q4 2021 Adjusted OIBD to Operating Income (Loss) Reconciliation
Q4 2021 ADJUSTED OIBD TO OPERATING INCOME (LOSS) RECONCILIATION (M CAN$) 100 62 50 2 1 1 0 -50 (60) (6) -100 -150 (88) (90) Adjusted Depr. & Adjusted Gain on acq., Unrealized Restructuring Impairment Operating 1 OIBD Amort. Operating disp. and gain costs charges Income (loss) 1 Income others on fina
Slide 16: Net Earnings (Loss) - IFRS vs Adjusted
NET EARNINGS (LOSS) - IFRS VS ADJUSTED2 NET EARNINGS (LOSS) NET EARNINGS (LOSS) PER COMMON SHARE1 (In millions of Canadian dollars, except per common share amounts) Q4 2021 Q4 2021 As per IFRS 105 $1.04 Specific items: Gain on acquisitions, disposals and others (1) ($0.01) Impairment charges 88 $0.7
Slide 17: Quarterly Year-over-Year Adjusted EPS Variance
QUARTERLY YEAR-OVER-YEAR ADJUSTED EPS VARIANCE1,2,3 1.25 1.13 1.04 1.00 0.72 0.75 0.03 0.03 $ cents 0.50 0.04 0.42 (0.01) (0.04) (0.30) 0.25 0.00 (0.56) (0.09) -0.25 EPS Specific Adjusted Income Financing Share of Depreciation Non- OIBD Adjusted Specific EPS reported items EPS tax expense & results
Slide 18: Quarterly Sequential Adjusted EPS Variance
QUARTERLY SEQUENTIAL ADJUSTED EPS VARIANCE1,2 1.25 1.13 1.04 1.00 Q3 2021 Reversal of tax assets in Canada 0.75 $ cents 0.50 0.32 0.02 0.02 0.02 0.25 0.21 (0.02) 0.00 (0.33) (0.01) (0.33) (0.09) -0.25 EPS Specific Adjusted Income Share of Depreciation Financing Non- OIBD Adjusted Specific EPS report
Slide 19: Cash Flow Overview
CASH FLOW OVERVIEW 131 137 84 82 86 87 89 34 58 70 51 20 (4) (71) (13) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2 2 CF from oper. Adj. CF from oper. Adjusted Free Cash Flow generated (used) Figures above in millions of CAN$ Figures above in millions of CAN$ 201
Slide 20: Net Debt Reconciliation - Q4 2021
NET DEBT1 RECONCILIATION - Q4 2021 (M CAN$) 1,760 1,750 1,500 95 1,351 13 16 1,250 (450) (49) (20) (9) (3) (2) Net debt as at Business Changes in Cash flow F/X CAN$ Investments Proceeds Right-of-use Dividends Payments for Net debt as at September disposal non-cash from oper. and others from assets p
Slide 21: Net Debt Reconciliation - 2021
NET DEBT1 RECONCILIATION - 2021 (M CAN$) 2,000 1,679 1,500 286 1,351 43 81 (467) 9 36 1,000 (247) (53) (16) 500 0 Net debt as at Business Cash flow Proceeds F/X CAN$ Investments Changes in Right-of-use Dividends Payments for Net debt as at December 31, disposal from oper. from and others non-cash as
Slide 22: Consolidated Financial Ratios & Debt Maturities
CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES Net Debt / Adjusted OIBD1,3 Interest Coverage Ratio2,3 5.0x 4.6x 4.7x 6.7x 4.0x 3.8x 3.96x 5.8x 6.0x 3.6x 3.5x 3.5x 4.7x 4.6x 4.3x 4.6x 2.5x 3.0x 3.4x 3.4x 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 23: Capital Investments
CAPITAL INVESTMENTS (in millions of Canadian dollars, excluding new leases, disposal of assets and accounts payable variation) 2022F CAPEX: $415 M1 includes ~ CAN$275 M for Bear Island conversion 415 330 312 26 27 50 81 227 37 213 20 39 22 169 24 85 104 61 217 184 22 22 18 62 66 84 — 2017 2018 2019
Slide 24: Near Term Factors
NEAR TERM FACTORS vs Q4 2021 vs Q1 2021 • Logistics and production costs: expect higher costs YoY Q1 2022 and QoQ in Q1 for all business segments OIBD Trend • Containerboard: QoQ performance to reflect good demand, lower average raw material prices and higher selling prices, offset by elevated produ
Slide 25: Containerboard - Segmented Operating Income
CONTAINERBOARD - SEGMENTED OPERATING INCOME YoY WATERFALL (millions of CAN$) SEQUENTIAL WATERFALL (millions of CAN$) 200 125 51 8 100 30 94 150 (1) (4) (1) (4) 6 (5) 122 28 (17) 110 70 (28) 75 100 (40) (28) 58 (22) 1 70 (28) 50 43 (41) 1 50 43 25 0 0 Q4 Depr. Q4 Price F/X Energy Volume Other Raw Q4
Slide 26: Tissue Papers - Segmented Operating Income
TISSUE PAPERS - SEGMENTED OPERATING INCOME YoY WATERFALL (millions of CAN$) SEQUENTIAL WATERFALL (millions of CAN$) 100 50 29 18 14 7 12 50 17 40 (35) (2) (3) (17) (5) 0 (5) 10 13 (11) (14) (15) (6) (92) 0 (17) (30) (6) (92) -50 -50 -100 -100 (115) (115) -150 -150 Q4 Depr. Q4 Other Energy Volume Pri
Slide 27: Specialty Products - Segmented Operating Income
SPECIALTY PRODUCTS - SEGMENTED OPERATING INCOME YoY WATERFALL (millions of CAN$) SEQUENTIAL WATERFALL (millions of CAN$) 50 35 28 14 30 40 (6) 25 (4) 30 21 20 (6) 21 4 17 17 20 (16) 17 3 15 15 (4) 13 12 (4) 10 10 0 5 Q4 2020 Depr. & Q4 2020 Price Other Raw Q4 2021 Depr. & Q4 2021 Q3 2021 Depr. & Q3
Slide 28: Key Performance Indicators (KPIs)
KEY PERFORMANCE INDICATORS (KPIs) Total Shipments1,2 ('000 s.t.) Capacity Utilization Rate1,2,3 (manufacturing only) 93% 92% 90% 91% 88% 551 514 523 525 513 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 LTM Working Capital (% of LTM Sales) 8.8% 8.4% 8.4% 8.5% 8.6% Q
Slide 29: Selected Reference Prices
SELECTED REFERENCE PRICES Current Current (US$/s.t.) Containerboard - Selected Products (US$/s.t.) Specialty Products - Selected Products (Jan-22) (Jan-22) 900 1,100 875 1,000 1,000 800 795 900 800 700 700 600 600 Aug-21 Aug 18 Aug-20 Nov-21 Aug-19 Feb 19 Feb-21 May 19 May-21 Nov 18 Nov-20 Feb-20 Ma
Slide 30: Selected Reference Prices and Fibre Costs
SELECTED REFERENCE PRICES AND FIBRE COSTS Q4 2021 vs Q4 2021 vs 2019 2020 2021 Q4 2020 Q3 2021 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) (%) Sell
Slide 31: For more information
For more information: www.cascades.com/investors Jennifer Aitken, MBA Director, Investor Relations 514-282-2697 / [email protected]