Cascades Continues to Improve its Results for the Second Quarter of 2016

KINGSEY FALLS, QC, Aug. 5, 2016

Q2 2016 Highlights

• Sales of $998 million
  (compared to $1,003 million in Q1 2016 (0%) and $950 million in Q2 2015 (+5%))
• Excluding specific items
  • OIBD of $112 million
    (compared to $106 million in Q1 2016 (+6%) and $103 million in Q2 2015 (+9%))
  • Net earnings per common share of $0.38
    (compared to $0.35 in Q1 2016 and $0.25 in Q2 2015)
  • Greenpac contribution to net earnings per common share: $0.03
    (compared to $0.04 in Q1 2016 and $0.03 in Q2 2015)
• Including specific items
  • OIBD of $112 million
    (compared to $120 million in Q1 2016 (-7%) and $105 million in Q2 2015 (+7%))
  • Net earnings per common share of $0.38
    (compared to $0.79 in Q1 2016 and $0.25 in Q2 2015)
• Net debt of $1,664 million as at June 30, 2016 (compared to $1,684 million as at March 31, 2016) and net debt to OIBD ratio down from 3.8x to 3.6x

Mr. Mario Plourde, President and Chief Executive Officer, commented on the second quarter results: "We are pleased with the overall performance of our operations during the second quarter. Results in North America were in line with expectations, and highlight how our strategic investment in new equipment over the last few years is translating into improved efficiency, and a greater operational capacity to adapt to changing market dynamics.

We made important headway this quarter, and completed several relevant transactions. The first was in our Containerboard Packaging Group, which acquired a corrugated packaging plant in Connecticut. The move strengthens our position in the Northeastern United States by increasing our converting capacity, while also providing us with the platform to execute our longer-term development strategy of upgrading our asset base and growing our presence in this area. Our Tissue Products Group also announced plans to build a new converting plant in Oregon that will house state-of-the-art converting lines, slated to begin operating at the end of the first quarter of next year. In addition to providing us with a new strategically positioned base to service the Western US market, this new facility will be fed by our nearby mill, providing secured off-take for this operation and increasing our overall integration rate in Tissue. 

As for our financial results, the 9% increase in OIBD compared to 2015, was largely driven by the strong performance of our Tissue Papers Group, which increased its OIBD by 70%. In addition, our Containerboard Packaging and Specialty Products Groups also had a strong performance and successfully increased their OIBD by 9% and 14%, respectively. Quarterly sales and OIBD levels in North America benefited from a 5% decrease in the value of the Canadian dollar against the US dollar. The results of our European division were slightly weaker for the quarter, largely due to the ongoing challenging market dynamics, as well as some scheduled downtime at our German mill. On a sequential basis, consolidated OIBD increased 6% as each of our business segments improved their contribution.

Finally, we continue to work on our debt reduction objective. Sequentially, the decrease in our debt was mainly the result of stronger cash flows from operations which were partially utilized to make seasonal investments in working capital and capital investments. Our net debt to OIBD ratio now stands at 3.6x, bringing us closer to our targeted range of 3.0x to 3.5x."