Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended June 30, 2025.
Q2 2025 Highlights
— Sales of $1,187 million (compared with $1,154 million in Q1 2025 and $1,180 million in Q2 2024);
— Operating income of $36 million (compared with $50 million in Q1 2025 and $34 million in Q2 2024);
— Net loss per common share of ($0.03) (compared with net earnings per common share of $0.07 in Q1 2025 and net earnings per common share of $0.01 in Q2 2024);
— Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)1) of $137 million (compared with $125 million in Q1 2025 and $112 million in Q2 2024);
— Adjusted net earnings per common share1 of $0.19 (compared with $0.13 in Q1 2025 and $0.08 in Q2 2024);
— Net debt1 of $2,104 million as of June 30, 2025 (compared with $2,216 million as of March 31, 2025). Net debt to EBITDA (A) ratio1 of 3.8x, down from 4.2x as of March 31, 2025;
— Total capital expenditures, net of disposals of $26 million, totaled $18 million in Q2 2025, compared to $36 million in Q1 2025 and $23 million in Q2 2024. The Corporation's 2025 forecasted capital expenditures before disposals will be approximately $150 million.
Hugues Simon, President and CEO, commented: “Second quarter performance was in line with our forecasts. On a consolidated basis, sequential improvement was underpinned by stronger volumes and selling prices, and lower transportation and energy costs. Packaging results were driven by the implementation of selling price increases and stable shipments. As expected, these were partially offset by higher operational costs per unit attributable to lower operating rates. Operational metrics at Bear Island improved sequentially, with production levels up 8%. This trend has continued into July. Our tissue segment generated stable results sequentially as benefits from improved pricing, sales volume and mix were offset by higher operational costs due to planned shutdowns and maintenance activities. These initiatives were scheduled to improve line efficiencies, support the execution of our retail tissue realignment strategy, and manage inventory in the Away-from-Home tissue market. The Corporation's net debt levels decreased by $112million sequentially, and leverage contracted to 3.8x from 4.2x at the end of the first quarter. Net of disposals, capital expenditures totaled $18 million in the quarter, and $54 million year-to-date. We now expect full year 2025 levels to be in the range of $150million, before disposals, down from $175million previously.”
Discussing near-term outlook, Mr. Simon commented, “We are anticipating third quarter performance to be slightly higher sequentially. We remain cautious in packaging, where results are expected to be largely stable as benefits from continued favourable pricing and raw material trends are forecasted to be offset by constrained demand levels. We expect a stronger tissue performance in the third quarter, driven by volume growth and largely stable raw material costs and selling prices. Continued uncertainty in the macro-economic environment may impact future demand levels across North America and ouroutlook.”
1 Some information represents non-IFRS Accounting Standards Financial measures, other financial measures or non-IFRS Accounting Standards ratios which are not standardized under IFRS Accounting Standards and therefore might not be comparable to similar financial measures disclosed by other corporations. Please refer to the “Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures” section for a completereconciliation.
Financial Summary
Selected consolidated information
(in millions of Canadian dollars, except amounts per common share) (unaudited) Q2 2025 Q1 2025 Q2 2024Sales 1,187 1,154 1,180As ReportedOperating income 36 50 34Net earnings (loss) (3) 7 1per common share (basic) ($0.03) $0.07 $0.01Adjusted1Earnings before interest, taxes, depreciation and amortization (EBITDA (A)) 137 125 112Net earnings 19 13 8per common share (basic) $0.19 $0.13 $0.08Margin (EBITDA (A) / Sales) 11.5% 10.8% 9.5%Net debt1 2,104 2,216 2,093Net debt / EBITDA (A) ratio1 3.8x 4.2x 4.2x
Segmented sales
(in millions of Canadian dollars) (unaudited) Q2 2025 Q1 2025 Q2 2024Packaging Products 763 762 745Tissue Papers 392 364 397Inter-segment sales, Corporate, Recovery and Recycling activities 32 28 38Sales 1,187 1,154 1,180
Segmented operating income (loss)
(in millions of Canadian dollars) (unaudited) Q2 2025 Q1 2025 Q2 2024Packaging Products 46 60 34Tissue Papers 25 24 38Corporate, Recovery and Recycling activities (35) (34) (38)Operating income 36 50 34
Segmented EBITDA (A)1
(in millions of Canadian dollars) (unaudited) Q2 2025 Q1 2025 Q2 2024Packaging Products 119 109 86Tissue Papers 38 37 54Corporate, Recovery and Recycling activities (20) (21) (28)EBITDA (A)1 137 125 112
1 Please refer to the “Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures” section for a complete reconciliation.
Analysis of results for the three-month period ended June30,2025 (compared to the same period last year)
The Corporation's second quarter sales of $1,187 million increased by $7 million compared with the same period last year. This increase was driven by consolidated net benefits of $51million from higher selling prices and $8million from a more favourable foreign exchange. These were partially offset by $46 million from lower volumes.
The second quarter EBITDA (A)1 totaled $137 million, an increase of $25million, or 22%, from the $112 million generated in the same period last year. This increase was driven by net benefits of $51million from higher selling prices and by lower raw material costs of $15 million, mainly in the Packaging Products segment. These were partially offset by net impacts of $23million from higher production and energy costs and $18million from lower volumes.
The main specific items, before income taxes, that impacted our second quarter of 2025 operating income and/or net loss were:
— $23 million of impairment charge on inventory and some equipment related to a closed facility in the United Sates (operating income and net loss);
— $2 million loss of other items (operating income and net loss);
— $4 million unrealized loss on financial instruments (operating income and net loss);
— $1 million loss on repurchase of long-term debt (net loss).
For the three-month period ended June30,2025, the Corporation posted a net loss of $(3) million, or ($0.03) per common share, compared to net earnings of $1 million, or $0.01 per common share, in the same period of 2024. On an adjusted basis1, the Corporation posted net earnings of $19million in the second quarter of 2025, or $0.19 per common share, compared to net earnings of $8million, or $0.08 per common share, in the same period of2024.
1 Please refer to the “Supplemental Information on Non-IFRS Accounting Standards 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 4, 2025 to shareholders of record at the close of business on August 21, 2025. This dividend is an “eligible dividend” as per the Income Tax Act (R.C.S. (1985), Canada). During the second quarter of 2025, Cascades purchased no common shares for cancellation.
2025 Second Quarter Results Conference Call Details
Management will discuss the 2025 second quarter financial results during a conference call today at 9:00 a.m. ET. The call can be accessed by dialing 1-800-990-4777 (international 1-289-819-1299). 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 7, 2025 by dialing 1-888-660-6345 (international 1-289-819-1450), access code 49150 #.
Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs approximately 9,600women and men across a network of 66 operating facilities, including 17 Recovery and Recycling facilities which are part of Corporate Activities and joint ventures managed by the Corporation, 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 otherfactors.
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars) (unaudited) June 30, December 31, 2025 2024AssetsCurrent assetsCash and cash equivalents 26 27Accounts receivable 472 469Current income tax assets 5 4Inventories 685 685Current portion of financial assets 5 1 1,193 1,186Long-term assetsInvestments in associates and joint ventures 95 97Property, plant and equipment 2,674 2,847Intangible assets with finite useful life 35 41Financial assets 5 -Other assets 104 105Deferred income tax assets 216 220Goodwill and other intangible assets with indefinite useful life 489 504 4,811 5,000Liabilities and EquityCurrent liabilitiesBank loans and advances 3 10Trade and other payables 649 748Current income tax liabilities 3 2Current portion of unsecured senior notes – 175Current portion of long-term debt 70 67Current portion of provisions for charges 25 42Current portion of financial liabilities and other liabilities 24 43 774 1,087Long-term liabilitiesLong-term debt 2,057 1,871Provisions for charges 55 58Financial liabilities 12 -Other liabilities 75 80Deferred income tax liabilities 136 133 3,109 3,229EquityCapital stock 618 616Contributed surplus 17 16Retained earnings 998 1,019Accumulated other comprehensive income 40 73Equity attributable to Shareholders 1,673 1,724Non-controlling interests 29 47Total equity 1,702 1,771 4,811 5,000
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
For the 3-month periods For the 6-month periods endedJune30, endedJune30,(in millions of Canadian dollars, except per common share amounts and number of common shares) (unaudited) 2025 2024 2025 2024Sales 1,187 1,180 2,341 2,289Supply chain and logistic 702 722 1,381 1,390Wages and employee benefits expenses 275 275 555 542Depreciation and amortization 72 69 141 136Maintenance and repair 67 60 131 122Other operational costs 6 11 12 20Impairment charges 23 – 24 2Other loss (gain) 1 – 5 3Restructuring costs 1 10 6 33Unrealized loss (gain) on derivative financial instruments 4 (1) – (2)Operating income 36 34 86 43Financing expense 33 37 69 72Share of results of associates and joint ventures (3) (6) (6) (9)Earnings (loss) before income taxes 6 3 23 (20)Provision for (recovery of) income taxes 3 (1) 8 (7)Net earnings (loss) including non-controlling interests for theperiod 3 4 15 (13)Net earnings attributable to non-controlling interests 6 3 11 6Net earnings (loss) attributable to Shareholders for the period (3) 1 4 (19)Net earnings (loss) per common shareBasic ($0.03) $0.01 $0.04 ($0.19)Diluted ($0.03) $0.01 $0.04 ($0.19)Weighted average basic number of common shares outstanding 101,152,145 100,781,388 101,073,415 100,742,283Weighted average number of diluted common shares 101,169,690 100,870,224 101,294,977 101,043,122
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the 3-month periods For the 6-month periods endedJune30, endedJune30,(in millions of Canadian dollars) (unaudited) 2025 2024 2025 2024Net earnings (loss) including non-controlling interests for theperiod 3 4 15 (13)Other comprehensive income (loss)Items that may be reclassified subsequently to earningsTranslation adjustmentsChange in foreign currency translation of foreign subsidiaries (63) 12 (104) 38Change in foreign currency translation related to net investment hedging activities 34 (5) 74 (15)Recovery of (provision for) income taxes (5) 1 (5) 2 (34) 8 (35) 25Items that are not released to earningsActuarial gain (loss) on employee future benefits – 4 (1) 11Provision for income taxes – (1) – (3) – 3 (1) 8Other comprehensive income (loss) (34) 11 (36) 33Comprehensive income (loss) including non-controlling interests for the period (31) 15 (21) 20Comprehensive income attributable to non-controlling interests for theperiod 4 3 9 7Comprehensive income (loss) attributable to Shareholders for theperiod (35) 12 (30) 13
CONSOLIDATED STATEMENTS OF EQUITY
For the 6-month period ended June 30, 2025(in millions of Canadian dollars) (unaudited) CAPITAL STOCK CONTRIBUTED RETAINED ACCUMULATED TOTAL NON- TOTAL SURPLUS EARNINGS OTHER EQUITY CONTROLLING EQUITY COMPREHENSIVE ATTRIBUTABLE TO INTERESTS INCOME SHAREHOLDERSBalance – Beginning of period 616 16 1,019 73 1,724 47 1,771Comprehensive income (loss)Net earnings – – 4 – 4 11 15Other comprehensive loss – – (1) (33) (34) (2) (36) – – 3 (33) (30) 9 (21)Dividends – – (24) – (24) (27) (51)Stock options expense – 1 – – 1 – 1Issuance of common shares upon exercise of stock options 2 – – – 2 – 2Balance – End of period 618 17 998 40 1,673 29 1,702 For the 6-month period ended June 30, 2024(in millions of Canadian dollars) (unaudited) CAPITAL STOCK CONTRIBUTED RETAINED ACCUMULATED TOTAL NON- TOTAL SURPLUS EARNINGS OTHER EQUITY CONTROLLING EQUITY COMPREHENSIVE ATTRIBUTABLE INTERESTS INCOME TO SHAREHOLDERSBalance – Beginning of period 613 15 1,096 15 1,739 42 1,781Comprehensive income (loss)Net earnings (loss) – – (19) – (19) 6 (13)Other comprehensive income – – 8 24 32 1 33 – – (11) 24 13 7 20Dividends – – (24) – (24) (8) (32)Stock options expense – 1 – – 1 – 1Issuance of common shares upon exercise of stock options 3 (1) – – 2 – 2Acquisition of non-controlling interests – – (2) – (2) – (2)Balance – End of period 616 15 1,059 39 1,729 41 1,770
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the 3-month periods For the 6-month periods endedJune30, endedJune30,(in millions of Canadian dollars) (unaudited) 2025 2024 2025 2024Operating activitiesNet earnings (loss) attributable to Shareholders for the period (3) 1 4 (19)Adjustments for:Financing expense 33 37 69 72Depreciation and amortization 72 69 141 136Impairment charges 23 – 24 2Other loss (gain) 1 – 5 3Restructuring costs 1 10 6 33Unrealized loss (gain) on derivative financial instruments 4 (1) – (2)Provision for (recovery of) income taxes 3 (1) 8 (7)Share of results of associates and joint ventures (3) (6) (6) (9)Net earnings attributable to non-controlling interests 6 3 11 6Net financing expense paid (25) (18) (74) (65)Net income taxes received (paid) (5) 2 (7) (3)Dividends received 7 8 7 9Payments, net of provisions, for charges and other liabilities (22) (26) (51) (46) 92 78 137 110Changes in non-cash working capital components (25) (24) (122) (94) 67 54 15 16Investing activitiesPayments for property, plant and equipment (44) (40) (80) (81)Proceeds from disposals of property, plant and equipment 26 17 26 17Change in intangible and other assets – (20) 1 (20) (18) (43) (53) (84)Financing activitiesBank loans and advances (1) 1 (7) 3Change in credit facilities (375) 8 (108) 85Change in credit facilities without recourse to the Corporation 120 3 121 18Issuance of unsecured senior notes, net of related expenses 541 – 541 -Repurchase of unsecured senior notes (281) – (456) -Increase in delayed draw unsecured term loan credit facility – – 36 -Payments of other long-term debt, including lease obligations (2025 – $39million for the (21) (16) (40) (37)6-month period ($21 million for the 3-month period); 2024 – $35 million for the6-month period ($15 million for the 3-month period))Issuance of common shares upon exercise of stock options 1 2 2 2Dividends paid to non-controlling interests (24) (5) (27) (8)Acquisition of non-controlling interests – – – (3)Dividends paid to the Corporation's Shareholders (12) (12) (24) (24) (52) (19) 38 36Net change in cash and cash equivalents during the period (3) (8) – (32)Currency translation on cash and cash equivalents – – (1) 1Cash and cash equivalents – Beginning of the period 29 31 27 54Cash and cash equivalents – End of the period 26 23 26 23
SEGMENTED INFORMATION
In the fourth quarter of 2024, the Corporation announced organizational changes designed to support its strategic growth. These changes involve the combination of the Containerboard and Specialty Products activities into a single operational unit. Since January2025, the Corporation's operations are managed in two segments: Packaging Products and Tissue Papers. The comparative figures have been restated to conform with the current year's presentation. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in the most recent Audited Consolidated Financial Statements for the year ended December31,2024.
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 Accounting Standards; 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 Accounting Standards measures.
Sales by business segment are shown in the following table:
SALESFor the 3-month periods ended June 30 (in millions of Canadian dollars) (unaudited) 2025 2024 Total Inter-segment External Total Inter-segment ExternalPackaging Products 763 (11) 752 745 (13) 732Tissue Papers 392 – 392 397 – 397Corporate, Recovery and Recycling activities 73 (30) 43 89 (38) 51 1,228 (41) 1,187 1,231 (51) 1,180
SALESFor the 6-month periods ended June 30 (in millions of Canadiandollars) (unaudited) 2025 2024 Total Inter-segment External Total Inter-segment ExternalPackaging Products 1,525 (24) 1,501 1,454 (25) 1,429Tissue Papers 756 – 756 764 (1) 763Corporate, Recovery and Recycling activities 146 (62) 84 171 (74) 97 2,427 (86) 2,341 2,389 (100) 2,289
EBITDA (A) by business segment is reconciled to IFRS Accounting Standards measure, namely operating income (loss), and is shown in the following table:
For the 3-month period ended June30,2025(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 46 25 (35) 36Depreciation and amortization 49 14 9 72Impairment charges 23 – – 23Other loss (gain) 2 (1) – 1Restructuring costs – – 1 1Unrealized loss (gain) on derivative financial instruments (1) – 5 4EBITDA (A) 119 38 (20) 137Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 594 331 52 977
For the 3-month period ended June30,2024(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 34 38 (38) 34Depreciation and amortization 44 13 12 69Restructuring costs 7 3 – 10Unrealized loss (gain) on derivative financial instruments 1 – (2) (1)EBITDA (A) 86 54 (28) 112Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 617 322 58 997
For the 6-month period ended June30,2025(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 106 49 (69) 86Depreciation and amortization 95 27 19 141Impairment charges 23 – 1 24Other loss (gain) 6 (1) – 5Restructuring costs 1 – 5 6Unrealized loss (gain) on derivative financial instruments (3) – 3 -EBITDA (A) 228 75 (41) 262Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 1,197 635 104 1,936
For the 6-month period ended June 30,2024(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 46 69 (72) 43Depreciation and amortization 87 26 23 136Impairment charges 2 – – 2Other loss 3 – – 3Restructuring costs 23 9 1 33Unrealized gain on derivative financial instruments – – (2) (2)EBITDA (A) 161 104 (50) 215Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 1,206 617 109 1,932
Payments for property, plant and equipment by business segment are shown in the following table:
PAYMENTS FOR PROPERTY, PLANT AND EQUIPMENT For the 3-month periods For the 6-month periods endedJune30, endedJune30,(in millions of Canadian dollars) (unaudited) 2025 2024 2025 2024Packaging Products 33 63 67 77Tissue Papers 14 12 22 20Corporate, Recovery and Recycling activities 1 13 7 19Total acquisitions 48 88 96 116Right-of-use assets acquisitions (non-cash) (10) (51) (34) (54) 38 37 62 62Acquisitions for property, plant and equipment included in “Trade and other payables”Beginning of the period 20 29 32 45End of the period (14) (26) (14) (26)Payments for property, plant and equipment 44 40 80 81Proceeds from disposals of property, plant and equipment (26) (17) (26) (17)Payments for property, plant and equipment net of proceeds from disposals 18 23 54 64
SUPPLEMENTAL INFORMATION ON NON-IFRS ACCOUNTING STANDARDS 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 availablecash.
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 hedge instruments 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-recurringnature.
RECONCILIATION AND USES OF NON-IFRS ACCOUNTING STANDARDS MEASURES 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 Accounting Standards (“non-IFRS Accounting Standards 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 Accounting Standards 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 Accounting Standards measures and other financial measures are used in our financialdisclosures:
Non-IFRS Accounting Standardsmeasures
— Adjusted earnings before interest, taxes, depreciation and amortization or EBITDA (A): represents the operating income (as published in the Consolidated Statements of Earnings (Loss) of the Consolidated Financial Statements) before depreciation and amortization excluding specific items. Measure used to assess recurring operating performance and the contribution of each segment on a comparable basis.
— Adjusted net earnings: Measure used to assess the Corporation's consolidated financial performance on a comparable basis.
— Adjusted cash flow: Measure 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: Measure used to calculate the excess cash the Corporation generates by subtracting capital expenditures (excluding strategic projects) from the EBITDA (A).
— Working capital: Measure used to assess the short-term liquidity of the Corporation.
Other financial measures
— Total debt: Measure 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: Measure used to calculate the Corporation's total debt less cash and cash equivalents. Often put in relation to EBITDA (A) to calculate the net debt to EBITDA (A) ratio.
Non-IFRS Accounting Standards 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.
— Ratio of net debt / (total equity and net debt): Ratio used to evaluate the Corporation's financial leverage and 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 Accounting Standards measures and other financial measures are mainly derived from the consolidated financial statements, but do not have the meanings prescribed by IFRS Accounting Standards. 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 Accounting Standards. In addition, our definitions of non-IFRS Accounting Standards measures and other financial measures may differ from those of other corporations. Any such modification or reformulation may be significant.
In the fourth quarter of 2024, the Corporation announced organizational changes designed to support its strategic growth. These changes involve the combination of the Containerboard and Specialty Products activities into a single operational unit. Since January2025, the Corporation's operations are managed in two segments: Packaging Products and Tissue Papers. The comparative figures have been restated to conform with the current year's presentation.
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 Accounting Standards measure, namely operating income (loss), and is shown in the following table:
Q2 2025(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 46 25 (35) 36Depreciation and amortization 49 14 9 72Impairment charges 23 – – 23Other loss (gain) 2 (1) – 1Restructuring costs – – 1 1Unrealized loss (gain) on derivative financial instruments (1) – 5 4EBITDA (A)1 119 38 (20) 137Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 594 331 52 977
Q1 2025(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 60 24 (34) 50Depreciation and amortization 46 13 10 69Impairment charges – – 1 1Other loss 4 – – 4Restructuring costs 1 – 4 5Unrealized gain on derivative financial instruments (2) – (2) (4)EBITDA (A)1 109 37 (21) 125Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 603 304 52 959
1 Please refer to the “Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures” section for a complete reconciliation.
Q2 2024(in millions of Canadian dollars) (unaudited) Packaging Tissue Corporate, Consolidated Products Papers Recovery and Recycling activitiesOperating income (loss) 34 38 (38) 34Depreciation and amortization 44 13 12 69Restructuring costs 7 3 – 10Unrealized loss (gain) on derivative financial instruments 1 – (2) (1)EBITDA (A)1 86 54 (28) 112Supply chain and logistic and Wage and employee benefits expenses included in operatingincome(loss) 617 322 58 997
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 2025 Q1 2025 Q2 2024 Q2 2025 Q1 2025 Q2 2024As reported (3) 7 1 ($0.03) $0.07 $0.01Specific items:Impairment charges 23 1 – $0.17 $0.01 -Other loss (gain) 1 4 – $0.01 $0.03 -Restructuring costs 1 5 10 – $0.04 $0.07Unrealized loss (gain) on derivative financial instruments 4 (4) (1) $0.03 ($0.03) ($0.01)Loss on repurchase of long-term debt 1 – – $0.01 – -Unrealized loss on interest rate hedge instrument – – 1 – – $0.01Tax effect on specific items, other tax adjustments and (8) – (3) – $0.01 -attributable to non-controlling interest2 22 6 7 $0.22 $0.06 $0.07Adjusted1 19 13 8 $0.19 $0.13 $0.08Weighted average basic number of common shares outstanding 101,152,145 100,993,811 100,781,388
The following table reconciles cash flow from operating activities with EBITDA (A)1:
(in millions of Canadian dollars) (unaudited) Q2 2025 Q1 2025 Q2 2024Cash flow from operating activities 67 (52) 54Changes in non-cash working capital components 25 97 24Net income taxes paid (received) 5 2 (2)Net financing expense paid 25 49 18Payments, net of provisions, for charges and other liabilities, net of dividends received 15 29 18EBITDA (A)1 137 125 112
1 Please refer to the “Supplemental Information on Non-IFRS Accounting Standards 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. Please refer to the “Provision for (recovery of) income taxes” section for moredetails.
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 generated (used)1, 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 2025 Q1 2025 Q2 2024Cash flow from operating activities 67 (52) 54Changes in non-cash working capital components 25 97 24Cash flow from operating activities (excluding changes in non-cash working capital components) 92 45 78Restructuring costs paid 9 17 17Adjusted cash flow from operating activities1 101 62 95Payments for property, plant and equipment (44) (36) (40)Change in intangible and other assets – 1 (20)Lease obligation payments (21) (18) (15)Proceeds from disposals of property, plant and equipment 26 – 17 62 9 37Dividends paid to non-controlling interests (24) (3) (5)Dividends paid to the Corporation's Shareholders and to non-controlling interests (12) (12) (12)Adjusted cash flow generated (used)1 26 (6) 20Adjusted cash flow generated (used) per common share1 $0.26 ($0.06) $0.20(in Canadian dollars)Weighted average basic number of common shares outstanding 101,152,145 100,993,811 100,781,388
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, March 31, June 30, 2025 2025 2024Long-term debt 2,057 1,873 1,878Current portion of unsecured senior notes – 296 175Current portion of long-term debt 70 72 60Bank loans and advances 3 4 3Total debt1 2,130 2,245 2,116Less: Cash and cash equivalents (26) (29) (23)Net debt1 as reported 2,104 2,216 2,093Last twelve months EBITDA (A)1 548 523 498Net debt / EBITDA (A) ratio1 3.8x 4.2x 4.2x
1 Please refer to the “Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures” section for a complete reconciliation.
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SOURCE Cascades Inc.
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