Mr. Mario Plourde reports

CASCADES REPORTS SOLID RESULTS FOR THE THIRD QUARTER OF 2023

Cascades Inc. has released its unaudited financial results for the three-month period ended Sept. 30, 2023.

Q3 2023 highlights:

• Sales of $1,198-million (compared with $1,168-million in Q2 2023 and $1,174-million in Q3 2022);
• Operating income of $80-million (compared with $64-million in Q2 2023 and $25-million in Q3 2022);
• Net earnings per common share of 34 cents (compared with net earnings per common share of 22 cents in Q2 2023 and a net loss per common share of two cents in Q3 2022);
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)) of $161-million (compared with $141-million in Q2 2023 and $111-million in Q3 2022);
• Adjusted net earnings per common share of 44 cents (compared with 27 cents in Q2 2023 and 20 cents in Q3 2022);
• Net debt of $2,088-million as of Sept. 30, 2023 (compared with $2,076-million as of June 30, 2023); net debt to EBITDA (A) ratio of 3.8 times, down from 4.1 times as of June 30, 2023;
• Total capital expenditures, net of disposals, of $56-million in Q3 2023, compared with $104-million in Q2 2023; the corporation's 2023 forecasted net capital expenditures of approximately $325-million is unchanged;
• Sales of $1,198-million (compared with $1,168-million in Q2 2023 and $1,174-million in Q3 2022);
• Operating income of $80-million (compared with $64-million in Q2 2023 and $25-million in Q3 2022);
• Net earnings per common share of 34 cents (compared with net earnings per common share of 22 cents in Q2 2023 and a net loss per common share of two cents in Q3 2022);
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)) of $161-million (compared with $141-million in Q2 2023 and $111-million in Q3 2022);
• Adjusted net earnings per common share of 44 cents (compared with 27 cents in Q2 2023 and 20 cents in Q3 2022);
• Net debt of $2,088-million as of Sept. 30, 2023 (compared with $2,076-million as of June 30, 2023); net debt to EBITDA (A) ratio of 3.8 times, down from 4.1 times as of June 30, 2023;
• Total capital expenditures, net of disposals, of $56-million in Q3 2023, compared with $104-million in Q2 2023; the corporation's 2023 forecasted net capital expenditures of approximately $325-million is unchanged.

Mario Plourde, president and chief executive officer, commented: "We are pleased with our solid third quarter results. Sequential sales growth of 2.6 per cent reflects stronger containerboard volume and more favourable sales mix in tissue papers. Quarterly EBITDA (A) improved 14 per cent, exceeding expectations, fuelled by a robust 39-per-cent increase in tissue papers as benefits from lower raw material costs, price increases and repositioning of this segment's operational platform and other profitability, efficiency and productivity initiatives undertaken over the past year continued to yield results. Sequentially, raw material costs were a headwind for our packaging businesses, but remained below prior-year levels, while production costs were a tailwind. Notwithstanding a less favourable exchange rate, we maintained our net debt levels stable due to strong cash flows from operations and lower capital expenditures during the quarter. Consequently, our leverage ratio1 improved to 3.8 times from 4.1 times at the end of Q2."

Discussing near-term outlook, Mr. Plourde commented: "On a consolidated basis, we are forecasting fourth quarter results to decrease sequentially. This is driven by lower expected results in our containerboard segment due to higher raw material costs, slightly lower average selling prices and usual softer seasonal volumes in the fourth quarter. Results in the specialty packaging and tissue papers segments are expected to remain stable on a sequential basis. More broadly, we continue to remain prudent on the demand side, most notably in our packaging businesses, due to general economic uncertainty. Notwithstanding this, we are very pleased with the continued ramp-up of production at the Bear Island facility, and the benefits being realized in our tissue papers segment following the wide-ranging measures executed in recent quarters. In both cases, the benefits from these strategic actions will continue to generate long-term commercial and competitive advantages for Cascades and sustainable value for our shareholders."

Analysis of results for the three-month period ended Sept. 30, 2023 (compared with the same period last year)

The third quarter sales of $1,198-million increased by $24-million compared with the same period last year. This increase reflects a net benefit of $46-million that was driven by stronger volume in containerboard and a favourable FX (foreign exchange) impact for all business segments. These increases were partially offset by lower indexed selling prices in containerboard, the effects of which outweighed the increase generated by higher average selling prices in tissue papers.

The third quarter EBITDA (A) totalled $161-million, an increase of $50-million, or 45 per cent, from the $111-million generated in the same period last year. This increase was driven by a significant improvement in the tissue papers segment, which generated an EBITDA (A) of $61-million in the quarter, or 14.5 per cent on a margin basis, reflecting profitability initiatives implemented over recent quarters and lower raw material, logistics and energy costs. On a consolidated basis, results benefited from more favourable volume and sales mix and lower raw material and logistics costs. These impacts were partially offset by lower average selling prices in packaging, most notably in containerboard following decreases in index prices, and higher production costs in all businesses due to inflationary pressures in the last 12 months.

The main specific items, before income taxes, that impacted the company's third quarter 2023 operating income and/or net earnings were:

• $12-million of impairment charges on U.S. assets, restructuring costs and other loss related to the closure plants in the United States (operating income and net earnings);
• $2-million foreign exchange loss on long-term debt and financial instruments (net earnings).

For the three-month period ended Sept. 30, 2023, the corporation posted net earnings of $34-million, or 34 cents per common share, compared with a net loss of $2-million, or two cents per common share, in the same period of 2022. On an adjusted basis, the corporation posted net earnings of $45-million in the third quarter of 2023, or 44 cents per common share, compared with net earnings of $20-million, or 20 cents per common share, in the same period of 2022.

Dividend on common shares and normal course issuer bid

The board of directors of Cascades declared a quarterly dividend of 12 cents per common share to be paid on Dec. 7, 2023, to shareholders of record at the close of business on Nov. 24, 2023. This dividend is an eligible dividend as per the Income Tax Act (R.C.S. (1985), Canada). During the third quarter of 2023, Cascades purchased no common shares for cancellation.

2023 third quarter results conference call details

Management will discuss the 2023 third quarter financial results during a conference call today at 9 a.m. EDT. The call can be accessed by dialling 1-888-390-0620 (international: 1-416-764-8651). The conference call, including the investor presentation, will be broadcast live on the Cascades website under the investors section. A replay of the call will be available on the Cascades website and may also be accessed by phone until Dec. 9, 2023, by dialling 1-888-390-0541 (international: 1-416-764-8677); access code 557685.

Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs approximately 10,000 women and men across a network of more than 70 facilities in North America. Driven by its participative management, half a century of experience in recycling, and continuous research and development efforts, Cascades continues to provide innovative products that customers have come to rely on while contributing to the well-being of people, communities and the entire planet. Cascades' shares trade on the Toronto Stock Exchange under the ticker symbol CAS.

We seek Safe Harbor.