CASCADES INC. Institutional Investor Roadshow Toronto September 27, - PowerPoint PPT Presentation

CASCADES INC. Institutional Investor Roadshow – Toronto September 27, 2016

DISCLAIMER 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 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 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 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 Company. 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 Company uses operating income before depreciation and amortization (“OIBD” which, for purposes of this presentation, we call “EBITDA”) and operating income before depreciation and amortization (excluding specific items) (“OIBD (excluding specific items)” which, for purposes of this presentation, we call “EBITDA (excluding specific items)”) because such measures are used by management to assess the operating and financial performance of the Company’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, premiums paid on long-term debt refinancing, loss on refinancing of long-term debt, gains or losses on sales of business units, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps, foreign exchange gains or losses on long-term debt, other significant items of an unusual or non-recurring nature, and all such items included in discontinued operations or in the share of results of our associates and joint ventures. All amounts in this presentation are in Canadian dollars unless otherwise indicated. 2

COMPANY OVERVIEW LTM 6/30/16 Net Sales $4,002 million Segment Sales Breakdown 1 • Founded in 1964 by the Lemaire family; headquartered in Kingsey Falls, QC 15% • Produces, converts and markets packaging & tissue Containerboard 33% products composed principally of recycled fibre Tissue Papers 20% Boxboard Europe • Balanced play in less cyclical sectors Specialty Products • Heavy exposure to two of the strongest paper 32% segments: Tissue and Containerboard LTM 6/30/16 EBITDA $456 million • Market leader across many of its primary Segment EBITDA Breakdown 1, 2 product offerings • Unique culture – green visionaries, turnarounds, 12% entrepreneurial philosophy Containerboard 12% Tissue Papers • ~ 90 facilities in Canada, US & Europe 46% Boxboard Europe • ~ 11,000 employees worldwide Specialty Products 30% 1 Before inter-segment sales and corporate activities 2 EBITDA excluding specific items 3

COMPANY OVERVIEW Leading Packaging and Tissue Paper Manufacturer Packaging Products Tissue Papers Containerboard Boxboard Europe Specialty Products • One of the Canadian • # 1 in Canada Position • # 2 in coated recycled • Largest paper collector in Market leaders boxboard in Europe Canada • # 5 in North America • # 6 in North America 3 • 33% of Sales 1 • 20% of Sales 1 • 15% of Sales 1 • 32% of Sales 1 LTM 6/30/16 Financials • 46% of EBITDA 1,2 • 12% of EBITDA 1,2 • 12% of EBITDA 1,2 • 30% of EBITDA 1,2 • EBITDA Margin 2 : 18% • EBITDA Margin 2 : 7% • EBITDA Margin 2 : 11% • EBITDA Margin 2 : 12% 1 Before inter-segment sales and corporate activities 2 Excluding specific items 4 3 Including 100% of Greenpac’s capacity

COMPANY OVERVIEW Sales and Operations Across North America and Europe Sales from (in %) Sales to (in %) Europe Europe 23% 23% Canada 37% 50% Canada 27% 40% US US Operating Facilities (in %) PP&E by Geographic Segment (in %) Europe Europe 9% 19% US 31% 52% 60% Canada Canada 29% US 5 Note: Figures as of December 31, 2015

OPERATING PERFORMANCE AND FINANCIAL SITUATION Strong Financial Momentum Sales EBITDA (excl. specific items) (M CAN$) (M CAN$) 4,250 500 18.0% 4,002 456 4,000 450 16.0% 3,861 426 3,750 400 14.0% 3,561 340 342 3,500 350 12.0% 3,370 285 3,250 300 10.0% 3,141 3,000 250 8.0% 200 6.0% 2,750 2012 2013 2014 2015 LTM 6/30/16 2012 2013 2014 2015 LTM 6/30/16 • $3 million EBITDA sensitivity to every CAN$0.01 change vs US$ Positive momentum in results reflect improved productivity and favourable FX & energy costs 6

OPERATING PERFORMANCE AND FINANCIAL SITUATION Historical Segmented EBITDA Containerboard Boxboard Europe (M CAN$) (M CAN$) 2012 – LTM6/30/16 CAGR: 32% 2012 – LTM6/30/16 CAGR: 10% 300 24% 100 24% 239 231 80 20% 250 20% 72 63 57 60 200 16% 60 16% 164 150 43 150 12% 40 12% 100 90 8% 20 8% 50 4% 0 4% 1 2012 2013 2014 2015 LTM 6/30/16 2012 2013 2014 2015 LTM 6/30/16 Specialty Products Tissue Papers (M CAN$) (M CAN$) 2012 – LTM6/30/16 CAGR: 17% 2012 – LTM6/30/16 CAGR: 3% 100 24% 175 24% 154 80 20% 150 20% 138 133 64 58 119 60 16% 125 16% 41 37 40 96 40 12% 100 12% 20 8% 75 8% 0 4% 50 4% 2012 2013 2014 2015 LTM 6/30/16 2012 2013 2014 2015 LTM 6/30/16 Green line represents segment EBITDA margin; EBITDA excluding specific items 7 1 Including $9 million of energy credits

OPERATING PERFORMANCE AND FINANCIAL SITUATION Cash Flow and Free Cash Flow per Share Cash Flow From Operating Activities 1 Free Cash Flow per Share 1,2 (CAN$) (M CAN$) 1.88 2.00 500 1.58 388 400 1.50 337 0.86 277 300 1.00 0.78 233 200 0.50 155 100 0.00 (0.28) 0 (0.50) 2012 2013 2014 2015 LTM 6/30/16 2012 2013 2014 2015 LTM 6/30/16 Cash flows have grown at a 30% CAGR since 2012 • • Improving cash flows driven by Strategic Action Plan Objective: Direct ~$100M of free cash flow annually toward debt reduction 1 Excluding specific items 2 Excluding increase in investments 8

OPERATING PERFORMANCE AND FINANCIAL SITUATION Debt Maturities Debt Repayment as at June 30, 2016 1,000 • Over last 24 months, $1 billion+ of senior notes refinanced 710 • Extended maturities to 2021, 750 2022 and 2023 • $750 million revolving facility 500 extended to 2019 323 250 233 250 • Average interest rate down 112 bps 125 to 4.93% in 2015 from 6.05% in 2013 34 0 • Results in annual interest 1 year > 1 year 2019 2021 2022 2023 savings of ~ $23 million Debts without recourse Subsidiaries debts Revolver Senior notes 9

LEVERAGE TARGET OF 3.0x – 3.5x Achievable Without Asset Disposals 5.8x 6.0x 5.0x 4.7x 5.0x 4.6x 4.0x 1 4.0x 3.6x 3.6x 1 3.3x 1 3.1x 3.0x 2.0x 1.0x 0.0x 2011 2012 2013 2014 2015 Q2-16 2016E 2017E 2018E 1 Based on Street’s EBITDA estimates $437 million for 2016 and $444 million for 2017. Assuming stable EBITDA for 2018 ($444 million), FX US$/CAN$ at 1.30 and only $100 1 million of free cash flows dedicated to debt annually. 10

CONTAINERBOARD PACKAGING GROUP Environment Still Sound North American Containerboard Producers Fundamentals Sound Despite Added Capacity 2015 Industry Participants Industry Operating Rates and Expected Capacity 2 % of total capacity (Operating rate)  100% IP 33% 90%  WestRock 19% 80% Cascades EBITDA increases ~$2.5M with  every 1% increase in our utilization rate GP 10% 70% 60%  PCA 10% Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2  Kapstone 4% 2009 2010 2011 2012 2013 2014 2015 2016  Cascades 4% 1 (Million s.t.)  44.0 Pratt 4% 0.8 42.6 Others 16% 0.6 41.8 42.0 0.5 41.2 0.9 40.7 Kruger Yr 2 Corr. Sup. Yr 2 Top-5 Producers 76% Kruger Yr 1 39.8 Productivity 0.8% 40.0 Pratt Yr 2 Corr. Sup. Yr 1 Greif Yr 2 Productivity 0.8% 2 SP Fiber IP Valliant Yr 2 PCA D3 Yr 2 SP Fiber Yr 2 Pratt Yr 1 38.0 Corr. Supplies Greif Yr 1 Productivity 0.8% IP Valliant Yr 1 Productivity 0.8% 36.0 2014 New 2015e New 2016e New 2017e New 2018e Source: RISI, Deutsche Bank, Company reports and estimates capacity capacity capacity capacity 1 Including 59.7% of Greenpac’s total capacity 11 2 New capacity, net of capacity shutdowns (+2.3%) (+1.2%) (+1.5%) (+1.9%)