CASCADES INC. Institutional Investors Roadshow May 2013 DISCLAIMER - PowerPoint PPT Presentation

CASCADES INC. Institutional Investors Roadshow May 2013

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 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 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 non-recurring nature. All amounts in this presentation are in Canadian dollars unless otherwise indicated. 2

OVERVIEW OF OUR OPERATIONS Green packaging and tissue product offering Packaging Products Tissue Papers Containerboard Boxboard Europe Specialty Products Leading NA packaging and tissue manufacturer with substantial recycling capabilities 3

OVERVIEW OF OUR OPERATIONS Closed-loop business model 100+ business units 77% recycled fibre (2.9M tons) NA integration rate (2012): 23 units 34% (520K tons) May be sent to 32 units recycling centers NA integration rate (2012): • Containerboard Group 56% 58 units • Tissue Papers Group 69% Upstream and downstream integration Including seven manufacturing/converting tissue papers units and Reno De Medici‟s units. 4

OVERVIEW OF OUR OPERATIONS Balanced play in less cyclical sectors Cascades 2013 LTM Sales: $3,668M 2013 LTM EBITDA: $300M Packaging Products Tissue Papers 74% of Sales 26% of Sales 58% of EBITDA 42% of EBITDA Containerboard Boxboard Europe Specialty Products 32% of Sales 21% of Sales 21% of Sales 31% of EBITDA 12% of EBITDA 15% of EBITDA Exposure to two healthiest sectors in the Pulp and Paper industry EBITDA excluding specific items. Breakdown of sales and EBITDA before eliminations & corporate activities. 5

OUR FINANCIAL PERFORMANCE AND SITUATION Historical performance EBITDA Sales (M CAN$) (M CAN$) 4,500 500 465 3,929 4,017 3,877 4,000 400 350 3,625 3,645 3,668 310 315 300 306 304 3,500 300 3,278 3,182 229 3,000 200 2,500 100 2006 2007 2008 2009 2010 2011 2012 03/31/13 2006 2007 2008 2009 2010 2011 2012 03/31/13 LTM LTM IFRS CANADIAN GAAP IFRS CANADIAN GAAP Results impacted by challenging market conditions, lower shipments and higher cost input EBITDA excluding specific items. 6

OUR FINANCIAL PERFORMANCE AND SITUATION Historical segmented EBITDA Containerboard Boxboard Europe Containerboard Boxboard Europe (M CAN$) (M CAN$) (% of sales) (% of sales) 30 12.0% 20 12.0% 27 26 17 25 25 23 25 9.0% 15 9.0% 21 13 11 11 11 19 20 10 10 20 6.0% 10 6.0% 7 15 3.0% 5 3.0% 10 0.0% 0 0.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2011 2011 2012 2012 2012 2012 2013 2011 2011 2011 2012 2012 2012 2012 2013 Specialty Products Tissue Papers Specialty Products Tissue Papers (M CAN$) (M CAN$) (% of sales) (% of sales) 39 20 12.0% 40 20.0% 35 33 31 15 15 29 28 15 9.0% 30 15.0% 13 12 11 11 18 8 16 10 6.0% 20 10.0% 5 3.0% 10 5.0% 2 0 0.0% 0 0.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2011 2011 2012 2012 2012 2012 2013 2011 2011 2011 2012 2012 2012 2012 2013 7 EBITDA excluding specific items.

OUR FINANCIAL PERFORMANCE AND SITUATION Key performance indicators (KPIs) Capacity Utilization Rate ('000 s.t.) Total Shipments 95% 1000 92% 92% 875 826 831 808 809 90% 804 89% 89% 750 88% 87% 86% 625 83% 500 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2012 2012 2012 2012 2013 2012 2012 2012 2012 2013 Containerboard only: Containerboard only: 86% (for the quarter) 87% (for the quarter) 92% (for March 2013) Capacity utilization rate improving and shipments picking up Refer to Notes included in the Appendix. 8

OUR FINANCIAL PERFORMANCE AND SITUATION Our debt profile Objective: reduce debt below long term average Maturities well spread out • Banking Facilities: $422M • Increase in ratios due to challenging FY2011 and • Senior Notes: $958M modernization program • Other Debt (net): $201M • Short-term objective to improve profitability • Total Net Debt: $1,581M • Assuming debt remains the same, leverage ratio to improve • Available Liquidity (03/2013): $300M • Mid-term objective to reach industry standards Debt Maturity (towards 3x EBITDA) 7.0x 5.9x 5.8x 5.0x4.8x 4.4x 6.0x 4.5x 4.8x 5.0x 2017 4.7x 2020 4.5x 5.0x 33% 3.8x 3.3x 17% 4.0x 3.0x 2.0x Pre-2016 1.0x 9% 0.0x 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2016 41% Average 2003-2012 1 : 4.7x No significant maturity before 2016 and sufficient liquidity 9 1 EBITDA excluding specific items. 2013E and 2014E ratios are based on forecasts by analysts and debt remaining at Q1 2013 level.

OUR FINANCIAL PERFORMANCE AND SITUATION Investment program • Capex requests for 2013 initially approved at Capital Expenditures Distribution in 2012 - $198M approximately $175M First allocation of $150M • Including ~$60-70M of maintenance • By segment capex Container- Amount subject to change depending • board on operating results and economic Specialty 36% Products conditions 7% Corporate • Mostly dedicated towards converting 10% Tissue operations Papers IT 17% 15% Boxboard Europe 15% Gradual capex program to improve asset base while maintaining financial flexibility 10

OUR BUSINESS DRIVERS Raw material costs Virgin Pulp Prices (US$/ton) Main Recycled Fiber North Amercian OBM (US$/tonne) List Prices 1,100 300 Current 1,000 250 Current 930 200 900 150 800 150 835 100 700 100 50 600 Mar 13 Mar 13 Jan 11 Apr 11 July 11 Oct 11 Jan 12 Apr 12 July 12 Oct 12 Jan 13 Jan 11 Apr 11 July 11 Oct 11 Jan 12 Apr 12 July 12 Oct 12 Jan 13 NBSK NBHK White grades (SOP) Brown grades (OCC) OBM Average Quarterly List Prices Q1-2012 Q4-2012 Q1-2013 YoY QoQ 135 98 108 -20% +10% Brown grades - OCC No. 11 (New England) 163 172 165 +1% -4% White grades - SOP No. 37 (New England) Virgin Pulp Prices 873 863 898 +3% +4% NBSK (Canadian sources delivered to US East) 714 744 791 +11% +6% NBHK (Canada/US sources delivered to US East) Based on 2012 shipments, EBITDA sensitivity to US$15 or € /s.t. change: ±$47M 11 Sources: RISI, Bloomberg.

OUR BUSINESS DRIVERS Raw material dynamics Our North American Recycled Fibre Supply Our strategy • Short term: 2012 • constant review of our inventory strategy Cascades Recovery • prepare for Greenpac project to and Currently control minimize market disruption Internal over 80% of our Spot • Long term: 33% fibre supply Purchases • ensure control over fiber supply; despite 27% greater • develop substitute grades Contractual concentration Agreement • potential to increase virgin content on the supply side 40% in certain circumstances • continue to close the loop with customers retailers Largest recycled paper collector in Canada 12

OUR BUSINESS DRIVERS Cost structure and FX Raw materials, energy & supplies = 62% of 2012 COGS A weaker CAN$ would be a game changer US$/CAN$ € /CAN$ 1.10 0.85 Supplies and 1.05 0.80 Raw material chemicals and 12% Maintenance consumables 1.00 0.75 7% 32% Freight 0.95 0.70 8% 0.90 0.65 Energy Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 10% Wages and benefits 18% US$/CAN$ € /CAN$ Others 13% • US$/CAN$ forecasts by top-5 Canadian banks • Range 2013  0.95 to 0.99 (average 0.97) • Range 2014  0.91 to 1.01 (average 0.98) Stronger CAN$ and significant variable cost inflation negatively impact results 13 Source: Bloomberg