Tissue Papers segment delivers strongest
performance since 2020
KINGSEY
FALLS, QC, Aug. 3, 2023 /PRNewswire/ - Cascades Inc.
(TSX: CAS) reports its unaudited financial results for the
three-month period ended June 30,
2023.
Q2 2023 Highlights
- Sales of $1,168 million (compared
with $1,134 million in Q1 2023 and
$1,119 million in Q2 2022);
- Operating income of $64 million
(compared with an operating loss of $(80)
million in Q1 2023 and operating income of $32 million in Q2 2022);
- Net earnings per common share of $0.22 (compared with a net loss per common share
of ($0.75) in Q1 2023 and net
earnings per common share of $0.10 in
Q2 2022);
- Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA (A)1) of $141 million (compared with $134 million in Q1 2023 and $91 million in Q2 2022);
- Adjusted net earnings per common share1 of
$0.27 (compared with adjusted net
earnings per common share1 of $0.32 in Q1 2023 and adjusted net earnings per
common share1 of $0.10 in
Q2 2022);
- Net debt1 of $2,076
million as of June 30, 2023
(compared with $2,070 million as of
March 31, 2023). Net debt to EBITDA
(A) ratio1 of 4.1x, down from 4.6x as of March 31, 2023;
- Total capital expenditures, net of disposals, of $104 million in Q2 2023, compared to $137 million in Q1 2023 and to $116 million in Q2 2022. The Corporation's 2023
forecasted net capital expenditures of approximately $325 million is unchanged.
Mario Plourde, President and CEO,
commented: "We had a solid second quarter, with consolidated sales
and EBITDA (A)1 levels increasing 4% and 55%,
respectively, year-over-year. Results were driven by the Tissue
Papers segment, which had its strongest performance since
Q2 2020, reflecting benefits from commercial and operational
initiatives. The repositioning of our Tissue Papers platform
announced at the end of April 2023
progressed as planned in the second quarter, with the closures
completed as scheduled in June and July. We anticipate that these
decisions, combined with the ongoing productivity optimization
initiatives, which are also progressing as expected, will continue
to strengthen the performance of our Tissue Papers business going
forward. Slightly softer results in the Containerboard segment
largely reflect lower index-linked selling prices, the effects of
which more than offset the beneficial effect of lower raw material
costs. As expected, Containerboard results include costs related to
Bear Island as the facility
continues to be ramped up. Lastly, results in the Specialty
Packaging business decreased slightly year-over-year, as softer
volumes and higher production costs more than offset higher selling
prices."
Discussing near-term outlook, Mr. Plourde commented, "On a
consolidated basis, we are expecting a stable operational
performance sequentially in the third quarter, with the
Containerboard and Specialty Packaging businesses generating stable
results and the Tissue Papers segment delivering a slightly
stronger performance. Additionally, we anticipate continued
progress in the ramp up of the Bear Island Mill. More broadly,
while we are remaining prudent on the demand-side, raw material
pricing for our Tissue business and lower transportation costs for
all of our businesses are expected to be tailwinds in the third
quarter. Production cost levels are expected to be stable
sequentially while continuing to be more elevated than last year.
Lastly, we anticipate that our leverage ratio will continue to
improve in the coming quarters.
We will be hosting a Bear Island Mill tour and institutional
investor day in Virginia on
September 14, 2023, and look forward
to showcasing this modernized recycled containerboard facility and
elaborating on our businesses and strategies to the financial
community."
|
1 Some information
represents non-IFRS financial measures, other financial measures or
non-IFRS ratios which are not standardized under IFRS and therefore
might not be comparable to similar financial measures disclosed by
other corporations. Please refer to the "Supplemental Information
on Non-IFRS Measures and Other Financial Measures" section for a
complete reconciliation.
|
Financial Summary
Selected consolidated information
|
(in millions of
Canadian dollars, except amounts per common share)
(unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
|
|
|
|
Sales
|
1,168
|
1,134
|
1,119
|
|
As
Reported
|
|
|
|
|
Operating income
(loss)
|
64
|
(80)
|
32
|
|
Net income
(loss)
|
22
|
(75)
|
10
|
|
per common share
(basic)
|
$0.22
|
($0.75)
|
$0.10
|
|
Adjusted1
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA
(A))
|
141
|
134
|
91
|
|
Net
earnings
|
26
|
33
|
10
|
|
per common share
(basic)
|
$0.27
|
$0.32
|
$0.10
|
|
Margin (EBITDA (A) /
Sales)
|
12.1 %
|
11.8 %
|
8.1 %
|
Segmented sales
|
(in millions of
Canadian dollars) (unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
|
|
|
|
Packaging
Products
|
|
|
|
|
Containerboard
|
562
|
561
|
569
|
|
Specialty
Products
|
164
|
161
|
168
|
|
Inter-segment
sales
|
(9)
|
(7)
|
(10)
|
|
717
|
715
|
727
|
|
Tissue
Papers
|
416
|
387
|
342
|
|
Inter-segment sales,
Corporate, Recovery and Recycling activities
|
35
|
32
|
50
|
|
Sales
|
1,168
|
1,134
|
1,119
|
Segmented operating income (loss)
|
(in millions of
Canadian dollars) (unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
|
|
|
|
Packaging
Products
|
|
|
|
|
Containerboard
|
62
|
38
|
69
|
|
Specialty
Products
|
19
|
21
|
20
|
|
|
|
|
|
Tissue
Papers
|
18
|
(92)
|
(23)
|
|
|
|
|
|
Corporate, Recovery and
Recycling activities
|
(35)
|
(47)
|
(34)
|
|
Operating income
(loss)
|
64
|
(80)
|
32
|
Segmented EBITDA (A)1
|
(in millions of
Canadian dollars) (unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
|
|
|
|
Packaging
Products
|
|
|
|
|
Containerboard
|
96
|
126
|
99
|
|
Specialty
Products
|
24
|
27
|
25
|
|
|
|
|
|
Tissue
Papers
|
44
|
16
|
(8)
|
|
|
|
|
|
Corporate, Recovery and
Recycling activities
|
(23)
|
(35)
|
(25)
|
|
EBITDA
(A)1
|
141
|
134
|
91
|
|
1 Please refer to
the "Supplemental Information on Non-IFRS Measures and Other
Financial Measures" section for a complete
reconciliation.
|
Analysis of results for the three-month period ended June 30, 2023 (compared to the same period last
year)
The second quarter sales of $1,168 million increased by $49 million compared with the same period last
year. This increase reflects a net benefit of $18 million that was driven by a beneficial
impact from higher selling prices in Tissue Papers and Specialty
Packaging, a favourable FX impact for all business segments, and
higher volumes in Containerboard. These were partially offset by
lower indexed selling prices in Containerboard and a lower
contribution from Recovery and Recycling activities driven by
recycled fibre material pricing changes.
The second quarter EBITDA (A)1 totaled $141 million, an increase of $50 million, or
55%, from the $91 million generated
in the same period last year. This increase reflects stronger
results in our Tissue Papers segment, the benefits of which were
partially offset by slightly lower results in our Containerboard
and Specialty Packaging businesses.
The main specific items, before income taxes, that impacted our
second quarter 2023 operating income and/or net earnings were:
- $2 million of impairment charges
on US assets in the Tissue Papers segment (operating income and net
earnings);
- $6 million of restructuring costs
related to the closure of Tissue Papers plants in the US (operating
income and net earnings);
- $1 million unrealized loss on
financial instruments (operating income and net earnings);
- $3 million foreign exchange gain
on long-term debt and financial instruments (net earnings).
For the three-month period ended June 30, 2023, the
Corporation posted net earnings of $22
million, or $0.22 per common
share, compared to net earnings of $10
million, or $0.10 per common
share, in the same period of 2022. On an adjusted
basis1, the Corporation posted net earnings of
$26 million in the second quarter of 2023, or $0.27 per common share, compared to net earnings
of $10 million, or $0.10 per common share, in the same period
of 2022.
|
1 Please refer to
the "Supplemental Information on Non-IFRS Measures and Other
Financial Measures" section for a complete
reconciliation.
|
Dividend on common shares and normal course issuer bid
The
Board of Directors of Cascades declared a quarterly dividend of
$0.12 per common share to be paid on
September 1, 2023 to shareholders of
record at the close of business on August
18, 2023. This dividend is an "eligible dividend" as per the
Income Tax Act (R.C.S. (1985), Canada). During the second quarter of 2023,
Cascades purchased no common shares for cancellation.
2023 Second Quarter Results Conference Call
Details
Management will discuss the 2023 second quarter
financial results during a conference call today at 9:00 a.m. EDT. The call can be accessed by
dialing 1-888-390-0620 (international 1-416-764-8651). The
conference call, including the investor presentation, will be
broadcast live on the Cascades website (www.cascades.com) under the
"Investors" section. A replay of the call will be available on the
Cascades website and may also be accessed by phone until
September 3, 2023 by dialing
1-888-390-0541 (international 1-416-764-8677), access code
259981.
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
close to 80 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. Certain statements in this release, including
statements regarding future results and performance, are
forward-looking statements 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, increases in raw material costs,
fluctuations in selling prices and adverse changes in general
market and industry conditions and other factors.
CONSOLIDATED BALANCE SHEETS
|
(in millions of
Canadian dollars) (unaudited)
|
June 30,
2023
|
December 31,
2022
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
41
|
102
|
|
Accounts
receivable
|
537
|
556
|
|
Current income tax
assets
|
11
|
11
|
|
Inventories
|
611
|
587
|
|
Current portion of
financial assets
|
2
|
9
|
|
1,202
|
1,265
|
|
Long-term
assets
|
|
|
|
Investments in
associates and joint ventures
|
92
|
94
|
|
Property, plant and
equipment
|
2,847
|
2,945
|
|
Intangible assets with
finite useful life
|
63
|
73
|
|
Financial
assets
|
1
|
4
|
|
Other assets
|
73
|
70
|
|
Deferred income tax
assets
|
152
|
114
|
|
Goodwill and other
intangible assets with indefinite useful life
|
482
|
488
|
|
4,912
|
5,053
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Bank loans and
advances
|
4
|
3
|
|
Trade and other
payables
|
634
|
746
|
|
Current income tax
liabilities
|
4
|
4
|
|
Current portion of
long-term debt
|
75
|
134
|
|
Current portion of
provisions for contingencies and charges
|
8
|
8
|
|
Current portion of
financial liabilities and other liabilities
|
22
|
22
|
|
747
|
917
|
|
Long-term
liabilities
|
|
|
|
Long-term
debt
|
2,038
|
1,931
|
|
Provisions for
contingencies and charges
|
41
|
41
|
|
Financial
liabilities
|
7
|
7
|
|
Other
liabilities
|
95
|
97
|
|
Deferred income tax
liabilities
|
145
|
132
|
|
3,073
|
3,125
|
|
Equity
|
|
|
|
Capital
stock
|
613
|
611
|
|
Contributed
surplus
|
14
|
14
|
|
Retained
earnings
|
1,138
|
1,212
|
|
Accumulated other
comprehensive income
|
14
|
34
|
|
Equity attributable
to Shareholders
|
1,779
|
1,871
|
|
Non-controlling
interests
|
60
|
57
|
|
Total
equity
|
1,839
|
1,928
|
|
4,912
|
5,053
|
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
|
For the 3-month
periods
ended June 30,
|
For the 6-month
periods
ended June 30,
|
|
(in millions of
Canadian dollars, except per common share amounts and number of
common shares) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
|
Sales
|
1,168
|
1,119
|
2,302
|
2,157
|
|
|
|
|
|
|
Supply chain and
logistic
|
690
|
713
|
1,353
|
1,380
|
|
Wages and employee
benefits expenses
|
270
|
250
|
543
|
491
|
|
Depreciation and
amortization
|
68
|
63
|
130
|
123
|
|
Maintenance and
repair
|
60
|
50
|
118
|
106
|
|
Other
|
7
|
15
|
13
|
31
|
|
Impairment
charges
|
2
|
—
|
154
|
—
|
|
Gain on acquisitions,
disposals and others
|
—
|
(4)
|
(2)
|
(10)
|
|
Restructuring
costs
|
6
|
—
|
7
|
1
|
|
Unrealized loss on
derivative financial instruments
|
1
|
—
|
2
|
7
|
|
Operating income
(loss)
|
64
|
32
|
(16)
|
28
|
|
Financing
expense
|
31
|
21
|
54
|
36
|
|
Share of results of
associates and joint ventures
|
(3)
|
(6)
|
(15)
|
(10)
|
|
Earnings (loss)
before income taxes
|
36
|
17
|
(55)
|
2
|
|
Provision for
(recovery of) income taxes
|
9
|
3
|
(15)
|
(1)
|
|
Net earnings (loss)
including non-controlling interests for the period
|
27
|
14
|
(40)
|
3
|
|
Net earnings
attributable to non-controlling interests
|
5
|
4
|
13
|
8
|
|
Net earnings (loss)
attributable to Shareholders for the period
|
22
|
10
|
(53)
|
(5)
|
|
Net earnings (loss)
per common share
|
|
|
|
|
|
Basic
|
$0.22
|
$0.10
|
($0.53)
|
($0.05)
|
|
Diluted
|
$0.22
|
$0.10
|
($0.53)
|
($0.05)
|
|
Weighted average
basic number of common shares outstanding
|
100,447,357
|
100,588,470
|
100,404,729
|
100,705,048
|
|
Weighted average
number of diluted common shares
|
100,860,684
|
101,083,826
|
100,781,402
|
101,344,843
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
For the 3-month
periods
ended June 30,
|
For the 6-month
periods
ended June 30,
|
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
|
Net earnings (loss)
including non-controlling interests for the period
|
27
|
14
|
(40)
|
3
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
Items that may be
reclassified subsequently to earnings
|
|
|
|
|
|
Translation
adjustments
|
|
|
|
|
|
Change in foreign
currency translation of foreign subsidiaries
|
(22)
|
32
|
(24)
|
21
|
|
Change in foreign
currency translation related to net investment hedging
activities
|
8
|
(9)
|
9
|
(6)
|
|
Cash flow
hedges
|
|
|
|
|
|
Change in fair value
of commodity derivative financial instruments
|
1
|
1
|
(5)
|
7
|
|
Recovery of
(provision for) income taxes
|
(1)
|
1
|
—
|
(1)
|
|
(14)
|
25
|
(20)
|
21
|
|
Items that are not
released to earnings
|
|
|
|
|
|
Actuarial gain on
employee future benefits
|
2
|
12
|
3
|
31
|
|
Provision for income
taxes
|
(1)
|
(3)
|
(1)
|
(8)
|
|
1
|
9
|
2
|
23
|
|
Other comprehensive
income (loss)
|
(13)
|
34
|
(18)
|
44
|
|
Comprehensive income
(loss) including non-controlling interests for the
period
|
14
|
48
|
(58)
|
47
|
|
Comprehensive income
attributable to non-controlling interests for
the period
|
5
|
5
|
13
|
9
|
|
Comprehensive income
(loss) attributable to Shareholders for
the period
|
9
|
43
|
(71)
|
38
|
CONSOLIDATED STATEMENTS OF EQUITY
|
For the 6-month
period ended June 30, 2023
|
|
(in millions of
Canadian dollars)
(unaudited)
|
CAPITAL
STOCK
|
CONTRIBUTED
SURPLUS
|
RETAINED
EARNINGS
|
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
|
TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS
|
NON-
CONTROLLING
INTERESTS
|
TOTAL EQUITY
|
|
Balance - Beginning
of period
|
611
|
14
|
1,212
|
34
|
1,871
|
57
|
1,928
|
|
Comprehensive income
(loss)
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
—
|
—
|
(53)
|
—
|
(53)
|
13
|
(40)
|
|
Other comprehensive
income
(loss)
|
—
|
—
|
2
|
(20)
|
(18)
|
—
|
(18)
|
|
—
|
—
|
(51)
|
(20)
|
(71)
|
13
|
(58)
|
|
Dividends
|
—
|
—
|
(24)
|
—
|
(24)
|
(9)
|
(33)
|
|
Issuance of common
shares
upon exercise of stock
options
|
2
|
—
|
—
|
—
|
2
|
—
|
2
|
|
Acquisition of
non-controlling
interests
|
—
|
—
|
1
|
—
|
1
|
(1)
|
—
|
|
Balance - End of
period
|
613
|
14
|
1,138
|
14
|
1,779
|
60
|
1,839
|
|
|
|
|
|
|
|
|
|
For the 6-month period
ended June 30, 2022
|
|
(in millions of
Canadian dollars)
(unaudited)
|
CAPITAL
STOCK
|
CONTRIBUTED
SURPLUS
|
RETAINED
EARNINGS
|
ACCUMULATED
OTHER
COMPREHENSIVE
LOSS
|
TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS
|
NON-
CONTROLLING
INTERESTS
|
TOTAL EQUITY
|
|
Balance - Beginning
of period
|
614
|
14
|
1,274
|
(23)
|
1,879
|
48
|
1,927
|
|
Comprehensive
income
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
—
|
—
|
(5)
|
—
|
(5)
|
8
|
3
|
|
Other comprehensive
income
|
—
|
—
|
23
|
20
|
43
|
1
|
44
|
|
—
|
—
|
18
|
20
|
38
|
9
|
47
|
|
Dividends
|
—
|
—
|
(24)
|
—
|
(24)
|
(6)
|
(30)
|
|
Stock options
expense
|
—
|
1
|
—
|
—
|
1
|
—
|
1
|
|
Issuance of common
shares
upon exercise of stock
options
|
2
|
(1)
|
—
|
—
|
1
|
—
|
1
|
|
Redemption of common
shares
|
(2)
|
—
|
(3)
|
—
|
(5)
|
—
|
(5)
|
|
Acquisition of
non-controlling
interests
|
—
|
—
|
1
|
—
|
1
|
(1)
|
—
|
|
Balance - End of
period
|
614
|
14
|
1,266
|
(3)
|
1,891
|
50
|
1,941
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the 3-month
periods
ended June 30,
|
For the 6-month
periods
ended June 30,
|
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
|
Operating
activities
|
|
|
|
|
|
Net earnings (loss)
attributable to Shareholders for the period
|
22
|
10
|
(53)
|
(5)
|
|
Adjustments
for:
|
|
|
|
|
|
Financing
expense
|
31
|
21
|
54
|
36
|
|
Depreciation and
amortization
|
68
|
63
|
130
|
123
|
|
Impairment
charges
|
2
|
—
|
154
|
—
|
|
Gain on acquisitions,
disposals and others
|
—
|
(4)
|
(2)
|
(10)
|
|
Restructuring
costs
|
6
|
—
|
7
|
1
|
|
Unrealized loss on
derivative financial instruments
|
1
|
—
|
2
|
7
|
|
Provision for (recovery
of) income taxes
|
9
|
3
|
(15)
|
(1)
|
|
Share of results of
associates and joint ventures
|
(3)
|
(6)
|
(15)
|
(10)
|
|
Net earnings
attributable to non-controlling interests
|
5
|
4
|
13
|
8
|
|
Net financing expense
paid
|
(18)
|
(4)
|
(62)
|
(34)
|
|
Net income taxes
paid
|
(5)
|
(3)
|
(7)
|
(4)
|
|
Dividends
received
|
6
|
5
|
7
|
5
|
|
Provisions for
contingencies and charges and other liabilities
|
(7)
|
(8)
|
(7)
|
(16)
|
|
117
|
81
|
206
|
100
|
|
Changes in non-cash
working capital components
|
(30)
|
(59)
|
(76)
|
(151)
|
|
87
|
22
|
130
|
(51)
|
|
Investing
activities
|
|
|
|
|
|
Disposals in associates
and joint ventures
|
—
|
—
|
10
|
—
|
|
Payments for property,
plant and equipment
|
(104)
|
(117)
|
(244)
|
(219)
|
|
Proceeds from disposals
of property, plant and equipment
|
—
|
1
|
3
|
7
|
|
Change in intangible
and other assets
|
1
|
(2)
|
(1)
|
(3)
|
|
(103)
|
(118)
|
(232)
|
(215)
|
|
Financing
activities
|
|
|
|
|
|
Bank loans and
advances
|
3
|
(6)
|
2
|
—
|
|
Change in credit
facilities
|
44
|
191
|
166
|
248
|
|
Payments of other
long-term debt, including lease obligations
|
(34)
|
(40)
|
(91)
|
(49)
|
|
Issuance of common
shares upon exercise of stock options
|
2
|
1
|
2
|
1
|
|
Redemption of common
shares
|
—
|
—
|
—
|
(5)
|
|
Dividends paid to
non-controlling interests
|
(6)
|
(2)
|
(9)
|
(6)
|
|
Acquisition of
non-controlling interests
|
(3)
|
(2)
|
(3)
|
(2)
|
|
Dividends paid to the
Corporation's Shareholders
|
(12)
|
(12)
|
(24)
|
(24)
|
|
(6)
|
130
|
43
|
163
|
|
Net change in cash
and cash equivalents during the period
|
(22)
|
34
|
(59)
|
(103)
|
|
Currency translation
on cash and cash equivalents
|
(1)
|
(1)
|
(2)
|
(1)
|
|
Cash and cash
equivalents - Beginning of the period
|
64
|
37
|
102
|
174
|
|
Cash and cash
equivalents - End of the period
|
41
|
70
|
41
|
70
|
SEGMENTED INFORMATION
The Corporation's operations are managed in three segments:
Containerboard and Specialty Products (which constitutes the
Corporation's Packaging Products) and Tissue Papers. The accounting
policies of the reportable segments are the same as the
Corporation's accounting policies described in Note 2.
The Corporation's operating segments are reported in a manner
consistent with the internal reporting provided to the chief
operating decision-maker (CODM). The Chief Executive Officer has
authority for resource allocation and management of the
Corporation's performance and is therefore the CODM. The CODM
assesses the performance of each reportable segment based on sales
and earnings before interest, taxes, depreciation and amortization,
adjusted to exclude specific items (EBITDA (A)). The CODM
considers EBITDA (A) to be the best performance measure of the
Corporation's activities.
Sales for each segment are prepared on the same basis as those
of the Corporation. Inter-segment operations are recorded on the
same basis as sales to third parties, which are at fair market
value.
EBITDA (A) does not have a standardized meaning under IFRS;
accordingly, it may not be comparable to similarly named measures
used by other companies. Investors should not view EBITDA (A) as an
alternative measure to, for example, net earnings, or as a measure
of operating results, which are IFRS measures.
Sales by country by business segment are presented in the
following table:
|
|
|
|
|
|
|
SALES TO
|
|
|
|
For the 3-month
periods ended June 30,
|
|
Canada
|
United
States
|
Other
countries
|
Total
|
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
|
Packaging
Products
|
|
|
|
|
|
|
|
|
|
Containerboard
|
329
|
337
|
233
|
232
|
—
|
—
|
562
|
569
|
|
Specialty
Products
|
58
|
65
|
105
|
103
|
1
|
—
|
164
|
168
|
|
Inter-segment
sales
|
(4)
|
(5)
|
(5)
|
(5)
|
—
|
—
|
(9)
|
(10)
|
|
383
|
397
|
333
|
330
|
1
|
—
|
717
|
727
|
|
Tissue
Papers
|
136
|
105
|
280
|
237
|
—
|
—
|
416
|
342
|
|
Inter-segment sale,
Corporate, Recovery and Recycling
activities
|
23
|
44
|
7
|
6
|
5
|
—
|
35
|
50
|
|
542
|
546
|
620
|
573
|
6
|
—
|
1,168
|
1,119
|
|
|
|
|
|
|
|
SALES TO
|
|
|
|
For the 6-month
periods ended June 30,
|
|
Canada
|
United
States
|
Other
countries
|
Total
|
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
|
Packaging
Products
|
|
|
|
|
|
|
|
|
|
Containerboard
|
658
|
665
|
464
|
438
|
1
|
—
|
1,123
|
1,103
|
|
Specialty
Products
|
114
|
122
|
209
|
203
|
2
|
—
|
325
|
325
|
|
Inter-segment
sales
|
(8)
|
(9)
|
(8)
|
(9)
|
—
|
—
|
(16)
|
(18)
|
|
764
|
778
|
665
|
632
|
3
|
—
|
1,432
|
1,410
|
|
Tissue
Papers
|
262
|
200
|
541
|
456
|
—
|
—
|
803
|
656
|
|
Inter-segment sale,
Corporate, Recovery and Recycling
activities
|
48
|
81
|
13
|
10
|
6
|
—
|
67
|
91
|
|
1,074
|
1,059
|
1,219
|
1,098
|
9
|
—
|
2,302
|
2,157
|
EBITDA (A) by business segment is reconciled to IFRS measure,
namely operating income (loss), and is presented in the following
table:
|
For the 3-month
period ended June 30, 2023
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
62
|
19
|
18
|
(35)
|
64
|
|
Depreciation and
amortization
|
34
|
5
|
18
|
11
|
68
|
|
Impairment
charges
|
—
|
—
|
2
|
—
|
2
|
|
Restructuring
costs
|
—
|
—
|
6
|
—
|
6
|
|
Unrealized loss on
derivative financial instruments
|
—
|
—
|
—
|
1
|
1
|
|
EBITDA
(A)
|
96
|
24
|
44
|
(23)
|
141
|
|
For the 3-month period
ended June 30, 2022
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
69
|
20
|
(23)
|
(34)
|
32
|
|
Depreciation and
amortization
|
29
|
5
|
19
|
10
|
63
|
|
Gain on acquisitions,
disposals and others
|
—
|
—
|
(4)
|
—
|
(4)
|
|
Unrealized loss (gain)
on derivative financial instruments
|
1
|
—
|
—
|
(1)
|
—
|
|
EBITDA
(A)
|
99
|
25
|
(8)
|
(25)
|
91
|
|
For the 6-month
period ended June 30, 2023
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
100
|
40
|
(74)
|
(82)
|
(16)
|
|
Depreciation and
amortization
|
64
|
10
|
35
|
21
|
130
|
|
Impairment
charges
|
59
|
1
|
94
|
—
|
154
|
|
Gain on acquisitions,
disposals and others
|
—
|
—
|
(2)
|
—
|
(2)
|
|
Restructuring
costs
|
—
|
—
|
7
|
—
|
7
|
|
Unrealized loss (gain)
on derivative financial instruments
|
(1)
|
—
|
—
|
3
|
2
|
|
EBITDA
(A)
|
222
|
51
|
60
|
(58)
|
275
|
|
For the 6-month period
ended June 30, 2022
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
113
|
44
|
(58)
|
(71)
|
28
|
|
Depreciation and
amortization
|
57
|
9
|
36
|
21
|
123
|
|
Gain on acquisitions,
disposals and others
|
—
|
(6)
|
(4)
|
—
|
(10)
|
|
Restructuring
costs
|
—
|
—
|
1
|
—
|
1
|
|
Unrealized loss (gain)
on derivative financial instruments
|
9
|
—
|
—
|
(2)
|
7
|
|
EBITDA
(A)
|
179
|
47
|
(25)
|
(52)
|
149
|
Payments for property, plant and equipment by business segment are
presented in the following table:
|
PAYMENTS FOR PROPERTY,
PLANT AND EQUIPMENT
|
|
For the 3-month
periods
ended June 30,
|
For the 6-month
periods
ended June 30,
|
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
|
Packaging
Products
|
|
|
|
|
|
Containerboard
|
66
|
84
|
155
|
159
|
|
Specialty
Products
|
7
|
6
|
11
|
17
|
|
73
|
90
|
166
|
176
|
|
Tissue
Papers
|
8
|
17
|
17
|
22
|
|
Corporate, Recovery
and Recycling activities
|
10
|
7
|
13
|
15
|
|
Total
acquisitions
|
91
|
114
|
196
|
213
|
|
Right-of-use assets
acquisitions
|
(7)
|
(12)
|
(15)
|
(33)
|
|
84
|
102
|
181
|
180
|
|
Acquisitions for
property, plant and equipment included in "Trade and other
payables"
|
|
|
|
|
|
Beginning of the
period
|
63
|
51
|
106
|
75
|
|
End of the
period
|
(43)
|
(36)
|
(43)
|
(36)
|
|
Payments for
property, plant and equipment
|
104
|
117
|
244
|
219
|
|
Proceeds from
disposals of property, plant and equipment
|
—
|
(1)
|
(3)
|
(7)
|
|
Payments for
property, plant and equipment net of proceeds from
disposals
|
104
|
116
|
241
|
212
|
SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES AND OTHER FINANCIAL
MEASURES
SPECIFIC ITEMS
The Corporation incurs some specific items that adversely or
positively affect its operating results. We believe it is useful
for readers to be aware of these items as they provide additional
information to measure performance, compare the Corporation's
results between periods, and assess operating results and
liquidity, notwithstanding these specific items. Management
believes these specific items are not necessarily reflective of the
Corporation's underlying business operations in measuring and
comparing its performance and analyzing future trends. Our
definition of specific items may differ from that of other
corporations and some of these items may arise in the future and
may reduce the Corporation's available cash.
They include, but are not limited to, charges for (reversals of)
impairment of assets, restructuring gains or costs, loss on
refinancing and repurchase of long-term debt, some deferred tax
asset provisions or reversals, premiums paid on repurchase of
long-term debt, gains or losses on the acquisition or sale of a
business unit, gains or losses on the share of results of
associates and 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 and
option fair value revaluation, foreign exchange gains or losses on
long-term debt and financial instruments, fair value revaluation
gains or losses on investments, specific items of discontinued
operations and other significant items of an unusual, non-cash or
non-recurring nature.
RECONCILIATION AND USES OF NON-IFRS AND OTHER FINANCIAL
MEASURES
To provide more information for evaluating the Corporation's
performance, the financial information included in this analysis
contains certain data that are not performance measures under IFRS
("non-IFRS measures"), which are also calculated on an adjusted
basis to exclude specific items. We believe that providing certain
key performance and capital measures, as well as 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. This also increases the transparency
and clarity of the financial information. The following non-IFRS
measures and other financial measures are used in our
financial disclosures:
Non-IFRS measures
- Adjusted earnings before interest, taxes, depreciation and
amortization or EBITDA (A): represents the operating income before
depreciation and amortization excluding specific items. Used to
assess recurring operating performance and the contribution of each
segment on a comparable basis.
- Adjusted net earnings: Used to assess the Corporation's
consolidated financial performance on a comparable basis.
- Adjusted cash flow: Used to assess the Corporation's capacity
to generate cash flows to meet financial obligations and/or
discretionary items such as share repurchases, dividend increases
and strategic investments.
- Free cash flow: Used to measure the excess cash the Corporation
generates by subtracting capital expenditures (excluding strategic
projects) from the EBITDA (A).
- Working capital: Used to assess the short-term liquidity of the
Corporation.
Other financial measures
- Total debt: Used to calculate all the Corporation's debt,
including long-term debt and bank loans. Often put in relation to
equity to calculate the debt-to-equity ratio.
- Net debt: Used to calculate the Corporation's total debt less
cash and cash equivalents. Often put in relation to EBITDA (A) to
calculate net debt to EBITDA (A) ratio.
Non-IFRS ratios
- Net debt to EBITDA (A) ratio: Ratio used to assess the
Corporation's ability to pay its debt and evaluate financial
leverage.
- EBITDA (A) margin: Ratio used to assess operating performance
and the contribution of each segment on a comparable basis
calculated as a percentage of sales.
- Adjusted net earnings per common share: Ratio used to assess
the Corporation's consolidated financial performance on a
comparable basis.
- Net debt / Net debt + Shareholders' equity: Ratio used to
evaluate the Corporation's financial leverage and thus the risk to
Shareholders.
- Working capital as a percentage of sales: Ratio used to assess
the Corporation's operating liquidity performance.
- Adjusted cash flow per common share: Ratio used to assess the
Corporation's financial flexibility.
- Free cash flow ratio: Ratio used to measure the liquidity and
efficiency of how much more cash the Corporation generates than it
uses to run the business by subtracting capital expenditures
(excluding strategic projects) from the EBITDA (A) calculated as a
percentage of sales.
Non-IFRS and other financial measures are mainly derived from
the consolidated financial statements, but do not have meanings
prescribed by IFRS. These measures have limitations as an
analytical tool 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 and other financial
measures may differ from those of other corporations. Any such
modification or reformulation may be significant.
The CODM assesses the performance of each reportable segment
based on sales and earnings before interest, taxes, depreciation
and amortization, adjusted to exclude specific items
(EBITDA (A)1). The CODM considers EBITDA
(A)1 to be the best performance measure of the
Corporation's activities.
EBITDA (A)1 by business segment is reconciled to IFRS
measure, namely operating income (loss), and is presented in the
following table:
|
Q2
2023
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
62
|
19
|
18
|
(35)
|
64
|
|
Depreciation and
amortization
|
34
|
5
|
18
|
11
|
68
|
|
Impairment
charges
|
—
|
—
|
2
|
—
|
2
|
|
Restructuring
costs
|
—
|
—
|
6
|
—
|
6
|
|
Unrealized loss on
derivative financial instruments
|
—
|
—
|
—
|
1
|
1
|
|
EBITDA
(A)1
|
96
|
24
|
44
|
(23)
|
141
|
|
Q1 2023
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
38
|
21
|
(92)
|
(47)
|
(80)
|
|
Depreciation and
amortization
|
30
|
5
|
17
|
10
|
62
|
|
Impairment
charges
|
59
|
1
|
92
|
—
|
152
|
|
Gain on acquisitions,
disposals and others
|
—
|
—
|
(2)
|
—
|
(2)
|
|
Restructuring
costs
|
—
|
—
|
1
|
—
|
1
|
|
Unrealized loss (gain)
on derivative financial instruments
|
(1)
|
—
|
—
|
2
|
1
|
|
EBITDA
(A)1
|
126
|
27
|
16
|
(35)
|
134
|
|
Q2 2022
|
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate,
Recovery and
Recycling
activities
|
Consolidated
|
|
Operating income
(loss)
|
69
|
20
|
(23)
|
(34)
|
32
|
|
Depreciation and
amortization
|
29
|
5
|
19
|
10
|
63
|
|
Gain on acquisitions,
disposals and others
|
—
|
—
|
(4)
|
—
|
(4)
|
|
Unrealized loss (gain)
on derivative financial instruments
|
1
|
—
|
—
|
(1)
|
—
|
|
EBITDA
(A)1
|
99
|
25
|
(8)
|
(25)
|
91
|
|
1 Please refer to the "Supplemental Information on
Non-IFRS Measures and Other Financial Measures" section for a
complete reconciliation.
|
The following table reconciles net earnings (loss) and net earnings
(loss) per common share, as reported, with adjusted net
earnings1 and adjusted net earnings per common
share1:
|
(in millions of
Canadian dollars, except per common share amounts and number of
common shares) (unaudited)
|
NET EARNINGS
(LOSS)
|
|
NET EARNINGS
(LOSS)
PER COMMON
SHARE2
|
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
As
reported
|
22
|
(75)
|
10
|
|
$0.22
|
($0.75)
|
$0.10
|
|
Specific
items:
|
|
|
|
|
|
|
|
|
Impairment
charges
|
2
|
152
|
—
|
|
$0.02
|
$1.14
|
—
|
|
Gain on acquisitions,
disposals and others
|
—
|
(2)
|
(4)
|
|
—
|
($0.01)
|
($0.03)
|
|
Restructuring
costs
|
6
|
1
|
—
|
|
$0.04
|
$0.01
|
—
|
|
Unrealized loss on
derivative financial instruments
|
1
|
1
|
—
|
|
$0.01
|
—
|
—
|
|
Foreign exchange loss
(gain) on long-term debt and financial instruments
|
(3)
|
—
|
3
|
|
($0.02)
|
—
|
$0.03
|
|
Share of results of
associates and joint ventures
|
—
|
(9)
|
—
|
|
—
|
($0.07)
|
—
|
|
Tax effect on specific
items, other tax adjustments and attributable to
non-controlling
interest2
|
(2)
|
(35)
|
1
|
|
—
|
—
|
—
|
|
4
|
108
|
—
|
|
$0.05
|
$1.07
|
—
|
|
Adjusted1
|
26
|
33
|
10
|
|
$0.27
|
$0.32
|
$0.10
|
|
Weighted average
basic number of common shares outstanding
|
|
|
|
|
100,447,357
|
100,361,627
|
100,588,470
|
The following table reconciles cash flow from operating activities
with EBITDA (A)1:
|
(in millions of
Canadian dollars) (unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
Cash flow from
operating activities
|
87
|
43
|
22
|
|
Changes in non-cash
working capital components
|
30
|
46
|
59
|
|
Net income taxes
paid
|
5
|
2
|
3
|
|
Net financing expense
paid
|
18
|
44
|
4
|
|
Provisions for
contingencies and charges and other liabilities, net of dividends
received
|
1
|
(1)
|
3
|
|
EBITDA
(A)1
|
141
|
134
|
91
|
The following table reconciles cash flow from operating activities
with cash flow from operating activities (excluding changes in
non-cash working capital components) and adjusted cash flow from
operating activities1. It also reconciles adjusted cash
flow from operating activities1 to adjusted cash flow
used1, which is also calculated on a per common share
basis:
|
(in millions of
Canadian dollars, except per common share amounts or otherwise
noted) (unaudited)
|
Q2
2023
|
Q1 2023
|
Q2 2022
|
|
Cash flow from
operating activities
|
87
|
43
|
22
|
|
Changes in non-cash
working capital components
|
30
|
46
|
59
|
|
Cash flow from
operating activities (excluding changes in non-cash working capital
components)
|
117
|
89
|
81
|
|
Restructuring costs
paid
|
5
|
1
|
—
|
|
Adjusted cash flow
from operating activities1
|
122
|
90
|
81
|
|
Payments for property,
plant and equipment
|
(104)
|
(140)
|
(117)
|
|
Change in intangible
and other assets
|
1
|
(2)
|
(2)
|
|
Lease obligation
payments
|
(15)
|
(14)
|
(13)
|
|
Proceeds from
disposals of property, plant and equipment
|
—
|
3
|
1
|
|
4
|
(63)
|
(50)
|
|
Dividends paid to
non-controlling interests
|
(6)
|
(3)
|
(2)
|
|
Dividends paid to the
Corporation's Shareholders and to non-controlling
interests
|
(12)
|
(12)
|
(12)
|
|
Adjusted cash flow
used1
|
(14)
|
(78)
|
(64)
|
|
Adjusted cash flow
used per common share1
(in Canadian
dollars)
|
($0.14)
|
($0.78)
|
($0.64)
|
|
Weighted average
basic number of common shares outstanding
|
100,447,357
|
100,361,627
|
100,588,470
|
|
1 Please refer to
the "Supplemental Information on Non-IFRS Measures and Other
Financial Measures" section for a complete
reconciliation.
|
|
2 Specific amounts
per common share are calculated on an after-tax basis and are net
of the portion attributable to non-controlling interests. Per share
amounts in line item ''Tax effect on specific items, other tax
adjustments and attributable to non-controlling interests'' only
include the effect of tax adjustments.
|
The following table reconciles total debt1 and net
debt1 with the ratio of net debt to adjusted earnings
before interest, taxes, depreciation and amortization (EBITDA
(A))1:
|
(in millions of
Canadian dollars) (unaudited)
|
June
30,
2023
|
March 31,
2023
|
June 30,
2022
|
|
Long-term
debt
|
2,038
|
2,044
|
1,710
|
|
Current portion of
long-term debt
|
75
|
88
|
71
|
|
Bank loans and
advances
|
4
|
2
|
1
|
|
Total
debt1
|
2,117
|
2,134
|
1,782
|
|
Less: Cash and cash
equivalents
|
(41)
|
(64)
|
(70)
|
|
Net debt1
as reported
|
2,076
|
2,070
|
1,712
|
|
Last twelve months
EBITDA (A)1
|
502
|
452
|
318
|
|
Net debt / EBITDA
(A) ratio1
|
4.1x
|
4.6x
|
5.4x
|
|
1 Please refer to the "Supplemental Information on
Non-IFRS Measures and Other Financial Measures" section for a
complete reconciliation.
|
View original
content:https://www.prnewswire.com/news-releases/cascades-reports-solid-results-for-the-second-quarter-of-2023-301891998.html
SOURCE Cascades Inc.
