Starting the year with solid
results
KINGSEY
FALLS, QC, May 11, 2023 /PRNewswire/ - Cascades Inc.
(TSX: CAS) reports its unaudited financial results for the
three-month period ended March 31,
2023.
Q1 2023 Highlights
- Sales of $1,134 million (compared
with $1,135 million in Q4 2022 and
$1,038 million in Q1 2022)
- Operating loss of $(80) million
(compared with $(20) million in Q4
2022 and $(4) million in Q1
2022)
- Net loss per common share of ($0.75) (compared with a net loss per common
share of ($0.27) in Q4 2022 and a net
loss per common share of ($0.15) in
Q1 2022)
- Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA (A)1) of $134 million (compared with $116 million in Q4 2022 and $58 million in Q1 2022)
- Adjusted net earnings per common share1 of
$0.32 (compared with adjusted net
earnings per common share1 of $0.22 in Q4 2022 and a adjusted net loss per
common share1 of ($0.15)
in Q1 2022)
- Net debt1 of $2,070
million as of March 31, 2023
(compared with $1,966 million as of
December 31, 2022). Net debt to
EBITDA (A) ratio1 of 4.6x, down from 5.2x as of
December 31, 2022.
- Total capital expenditures, net of disposals, of $137 million in Q1 2023, compared to $149 million in Q4 2022 and to $96 million in Q1 2022. The Corporation's 2023
forecasted net capital expenditures of approximately $325 million, including $175 million ($100
million of which was paid in Q1) for the Bear Island containerboard conversion project
in Virginia, USA, is
unchanged.
Mario Plourde, President and CEO,
commented: "We had a solid first quarter. All three businesses
contributed to topline growth year-over-year, as benefits from
higher selling prices and an advantageous exchange rate more than
offset the impacts of a less favourable mix in Containerboard and
lower volumes in Tissue Papers and Specialty Products. Higher
sales, notably in Tissue, and lower raw material costs in our
packaging businesses drove higher consolidated profitability
levels. Sequentially, sales were stable, with stronger volumes in
all businesses counterbalancing the impacts of less favourable
sales mixes in Containerboard and Tissue and lower selling prices
in our packaging businesses. Containerboard results include the
final insurance settlement payment of $7
million related to water effluent treatment issues that
occurred at our Niagara Falls, NY
complex in mid-2021, bringing the insurance settlement total to
$12 million.
We announced an important repositioning of our Tissue Papers
operational platform at the end of April. This decision, which was
not taken lightly due to its impact on our work force, is the
culmination of an in-depth evaluation of the long-term positioning,
competitiveness and performance potential of our tissue operations
following disappointing results in recent years. Market conditions
in this business have changed significantly, and the closure of
these underperforming assets will strengthen not only the
operational performance of this business, but its financial and
environmental performance as well. In our Containerboard segment,
we are very pleased to have announced that the Bear Island facility produced its first
containerboard roll at the beginning of May. We provide more
details on these positive announcements and what they mean for
Cascades' longer-term objectives in our updated 2022 - 2024
Strategic Plan released today. From a consolidated perspective, our
2024 revenue target of approximately $5
billion remains unchanged, and our EBITDA (A) and free cash
flow objectives have been slightly modified to reflect the
announced changes to our operational platform and updated market
forecasts. As a result of the lower cash generation levels of 2022
and higher Bear Island project
cost, the Corporation has adjusted its leverage ratio objective to
2.5x to 3.0x by year-end 2024. The Corporation's capital allocation
priorities will focus on debt repayment while limiting capital
expenditures to 4% of revenues through 2024. Combined, this focus
will support the Company's mid-term leverage ratio objective of
2.0x to 2.5x ."
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.
|
Discussing near-term outlook, Mr. Plourde commented, "On a
consolidated basis, we are expecting slightly lower results in the
second quarter, with lower results in our packaging businesses to
offset forecasted stronger results in our Tissue Papers business.
In Containerboard, this outlook reflects slightly softer demand,
changes in index prices for raw materials and selling prices, and
the non-recurrence of the $7 million
final insurance settlement received in Q1. We are expecting similar
results for our Specialty Products segment, with relatively stable
volume, pricing and raw material costs. Lastly, we expect results
in our Tissue Papers segment to improve sequentially driven by the
additional benefits from profitability initiatives, higher selling
prices, lower raw material costs and stable demand."
Financial Summary
Selected consolidated information
(in millions of
Canadian dollars, except amounts per common share)
(unaudited)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
|
|
|
|
Sales
|
1,134
|
1,135
|
1,038
|
As
Reported
|
|
|
|
Operating
loss
|
(80)
|
(20)
|
(4)
|
Net loss
|
(75)
|
(27)
|
(15)
|
per common share
(basic)
|
($0.75)
|
($0.27)
|
($0.15)
|
Adjusted1
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA
(A))
|
134
|
116
|
58
|
Net earnings
(loss)
|
33
|
22
|
(15)
|
per common share
(basic)
|
$0.32
|
$0.22
|
($0.15)
|
Margin EBITDA
(A)
|
11.8 %
|
10.2 %
|
5.6 %
|
Segmented sales
(in millions of
Canadian dollars) (unaudited)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
|
|
|
|
Packaging
Products
|
|
|
|
Containerboard
|
561
|
567
|
534
|
Specialty
Products
|
161
|
161
|
157
|
Inter-segment
sales
|
(7)
|
(7)
|
(8)
|
|
715
|
721
|
683
|
Tissue
Papers
|
387
|
384
|
314
|
Inter-segment sales,
Corporate Activities, Recovery and Recycling
|
32
|
30
|
41
|
Sales
|
1,134
|
1,135
|
1,038
|
Segmented operating income (loss)
(in millions of
Canadian dollars) (unaudited)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
|
|
|
|
Packaging
Products
|
|
|
|
Containerboard
|
38
|
85
|
44
|
Specialty
Products
|
21
|
22
|
24
|
|
|
|
|
Tissue
Papers
|
(92)
|
(86)
|
(35)
|
|
|
|
|
Corporate Activities,
Recovery and Recycling
|
(47)
|
(41)
|
(37)
|
Operating income
(loss)
|
(80)
|
(20)
|
(4)
|
Segmented EBITDA (A)1
(in millions of
Canadian dollars) (unaudited)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
|
|
|
|
Packaging
Products
|
|
|
|
Containerboard
|
126
|
119
|
80
|
Specialty
Products
|
27
|
20
|
22
|
|
|
|
|
Tissue
Papers
|
16
|
8
|
(17)
|
|
|
|
|
Corporate Activities,
Recovery and Recycling
|
(35)
|
(31)
|
(27)
|
EBITDA
(A)1
|
134
|
116
|
58
|
|
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
March 31, 2023 (compared to the same period last
year)
Sales of $1,134 million
increased by $96 million compared
with the same period last year. This reflects a net benefit of
$76 million that was driven by higher selling prices in all
business segments, partially offset by a slightly negative
consolidated sales mix impact. The Canadian dollar - US dollar
exchange rate was favourable for all businesses, contributing
$47 million to total sales levels. These factors were
partially offset by a $19 million impact related to lower
volumes in the Tissue Papers and Specialty Products business
segments.
The first quarter EBITDA (A)1 totaled $134 million, an increase of $76 million, or
131%, from the $58 million generated
in the same period last year. This increase reflects the net
benefits of $72 million related to price increases and changes
in sales volumes and product assortment sold, and $44 million
from more favourable raw material and FX. These benefits outweighed
a net impact of $28 million related to production, logistics
and energy costs and a $12 million negative contribution from
Recovery and Recycling operations as a result of lower volume and
recycled paper prices.
The main specific items, before income taxes, that impacted our
first quarter 2023 operating loss and/or net loss were:
- $152 million of impairment
charges on US assets (operating loss and net loss);
- $2 million gain from the sale of
some machinery and equipment and $1
million of restructuring costs related to previously closed
Tissue Papers plants in the US (operating loss and net loss);
- $1 million unrealized loss on
financial instruments (operating loss and net loss);
- $9 million gain from the sale of
an investment in a non-significant joint venture in the Tissue
Papers segment (net loss).
For the three-month period ended March 31, 2023, the
Corporation posted a net loss of $(75)
million, or $(0.75) per common
share, compared to a net loss of $(15)
million, or $(0.15) per common
share, in the same period of 2022. On an adjusted
basis1, the Corporation generated net earnings of
$33 million in the first quarter of 2023, or $0.32 per common share, compared to a net loss of
$(15) million, or ($0.15) 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
June 8, 2023 to shareholders of
record at the close of business on May 26,
2023. This dividend is an "eligible dividend" as per the
Income Tax Act (R.C.S. (1985), Canada). During the first quarter of 2023,
Cascades purchased no common shares for cancellation.
2023 First Quarter Results Conference Call
Details
Management will discuss the 2023 first 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
June 11, 2023 by dialing
1-888-390-0541 (international 1-416-764-8677), access code
690640.
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)
|
March 31,
2023
|
December 31,
2022
|
Assets
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
64
|
102
|
Accounts
receivable
|
546
|
556
|
Current income tax
assets
|
10
|
11
|
Inventories
|
614
|
587
|
Current portion of
financial assets
|
5
|
9
|
|
1,239
|
1,265
|
Long-term
assets
|
|
|
Investments in
associates and joint ventures
|
95
|
94
|
Property, plant and
equipment
|
2,857
|
2,945
|
Intangible assets with
finite useful life
|
69
|
73
|
Financial
assets
|
3
|
4
|
Other assets
|
72
|
70
|
Deferred income tax
assets
|
147
|
114
|
Goodwill and other
intangible assets with indefinite useful life
|
488
|
488
|
|
4,970
|
5,053
|
Liabilities and
Equity
|
|
|
Current
liabilities
|
|
|
Bank loans and
advances
|
2
|
3
|
Trade and other
payables
|
673
|
746
|
Current income tax
liabilities
|
4
|
4
|
Current portion of
long-term debt
|
88
|
134
|
Current portion of
provisions for contingencies and charges
|
7
|
8
|
Current portion of
financial liabilities and other liabilities
|
26
|
22
|
|
800
|
917
|
Long-term
liabilities
|
|
|
Long-term
debt
|
2,044
|
1,931
|
Provisions for
contingencies and charges
|
41
|
41
|
Financial
liabilities
|
9
|
7
|
Other
liabilities
|
98
|
97
|
Deferred income tax
liabilities
|
136
|
132
|
|
3,128
|
3,125
|
Equity
|
|
|
Capital
stock
|
611
|
611
|
Contributed
surplus
|
15
|
14
|
Retained
earnings
|
1,126
|
1,212
|
Accumulated other
comprehensive income
|
28
|
34
|
Equity attributable
to Shareholders
|
1,780
|
1,871
|
Non-controlling
interests
|
62
|
57
|
Total
equity
|
1,842
|
1,928
|
|
4,970
|
5,053
|
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
|
For the 3-month
periods ended
March 31,
|
(in millions of
Canadian dollars, except per common share amounts and number of
common shares) (unaudited)
|
2023
|
2022
|
Sales
|
1,134
|
1,038
|
|
|
|
Supply chain and
logistic
|
663
|
667
|
Wages and employee
benefits expenses
|
273
|
241
|
Depreciation and
amortization
|
62
|
60
|
Maintenance and
repair
|
58
|
56
|
Other
|
6
|
16
|
Impairment
charges
|
152
|
—
|
Gain on acquisitions,
disposals and others
|
(2)
|
(6)
|
Restructuring
costs
|
1
|
1
|
Unrealized loss on
derivative financial instruments
|
1
|
7
|
Operating
loss
|
(80)
|
(4)
|
Financing
expense
|
23
|
15
|
Share of results of
associates and joint ventures
|
(12)
|
(4)
|
Loss before income
taxes
|
(91)
|
(15)
|
Recovery of income
taxes
|
(24)
|
(4)
|
Net loss including
non-controlling interests for the period
|
(67)
|
(11)
|
Net earnings
attributable to non-controlling interests
|
8
|
4
|
Net earnings (loss)
attributable to Shareholders for the period
|
(75)
|
(15)
|
Net loss per common
share
|
|
|
Basic
|
($0.75)
|
($0.15)
|
Diluted
|
($0.75)
|
($0.15)
|
Weighted average
basic number of common shares outstanding
|
100,361,627
|
100,822,921
|
Weighted average
number of diluted common shares
|
100,701,239
|
101,608,760
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
For the 3-month
periods ended
March 31,
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
Net loss including
non-controlling interests for the period
|
(67)
|
(11)
|
Other comprehensive
income (loss)
|
|
|
Items that may be
reclassified subsequently to earnings
|
|
|
Translation
adjustments
|
|
|
Change in foreign
currency translation of foreign subsidiaries
|
(2)
|
(11)
|
Change in foreign
currency translation related to net investment hedging
activities
|
1
|
3
|
Cash flow
hedges
|
|
|
Change in fair value
of commodity derivative financial instruments
|
(6)
|
6
|
Recovery of
(provision for) income taxes
|
1
|
(2)
|
|
(6)
|
(4)
|
Items that are not
released to earnings
|
|
|
Actuarial gain on
employee future benefits
|
1
|
19
|
Provision for income
taxes
|
—
|
(5)
|
|
1
|
14
|
Other comprehensive
income (loss)
|
(5)
|
10
|
Comprehensive loss
including non-controlling interests for the period
|
(72)
|
(1)
|
Comprehensive income
attributable to non-controlling interests for
the period
|
8
|
4
|
Comprehensive loss
attributable to Shareholders for the period
|
(80)
|
(5)
|
CONSOLIDATED STATEMENTS OF EQUITY
|
For the 3-month
period ended March 31, 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)
|
—
|
—
|
(75)
|
—
|
(75)
|
8
|
(67)
|
Other comprehensive
income (loss)
|
—
|
—
|
1
|
(6)
|
(5)
|
—
|
(5)
|
|
—
|
—
|
(74)
|
(6)
|
(80)
|
8
|
(72)
|
Dividends
|
—
|
—
|
(12)
|
—
|
(12)
|
(3)
|
(15)
|
Stock options
expense
|
—
|
1
|
—
|
—
|
1
|
—
|
1
|
Balance - End of
period
|
611
|
15
|
1,126
|
28
|
1,780
|
62
|
1,842
|
|
|
|
|
|
|
|
|
|
For the 3-month period
ended March 31, 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
(loss)
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
—
|
—
|
(15)
|
—
|
(15)
|
4
|
(11)
|
Other comprehensive
income (loss)
|
—
|
—
|
14
|
(4)
|
10
|
—
|
10
|
|
—
|
—
|
(1)
|
(4)
|
(5)
|
4
|
(1)
|
Dividends
|
—
|
—
|
(12)
|
—
|
(12)
|
(4)
|
(16)
|
Redemption of common
shares
|
(2)
|
—
|
(3)
|
—
|
(5)
|
—
|
(5)
|
Balance - End of
period
|
612
|
14
|
1,258
|
(27)
|
1,857
|
48
|
1,905
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the 3-month
periods ended
March 31,
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
Operating
activities
|
|
|
Net loss attributable
to Shareholders for the period
|
(75)
|
(15)
|
Adjustments
for:
|
|
|
Financing
expense
|
23
|
15
|
Depreciation and
amortization
|
62
|
60
|
Impairment
charges
|
152
|
—
|
Gain on acquisitions,
disposals and others
|
(2)
|
(6)
|
Restructuring
costs
|
1
|
1
|
Unrealized loss on
derivative financial instruments
|
1
|
7
|
Recovery of income
taxes
|
(24)
|
(4)
|
Share of results of
associates and joint ventures
|
(12)
|
(4)
|
Net earnings
attributable to non-controlling interests
|
8
|
4
|
Net financing expense
paid
|
(44)
|
(30)
|
Net income taxes
paid
|
(2)
|
(1)
|
Dividends
received
|
1
|
—
|
Provisions for
contingencies and charges and other liabilities
|
—
|
(8)
|
|
89
|
19
|
Changes in non-cash
working capital components
|
(46)
|
(92)
|
|
43
|
(73)
|
Investing
activities
|
|
|
Disposals in associates
and joint ventures
|
10
|
—
|
Payments for property,
plant and equipment
|
(140)
|
(102)
|
Proceeds from disposals
of property, plant and equipment
|
3
|
6
|
Change in intangible
and other assets
|
(2)
|
(1)
|
|
(129)
|
(97)
|
Financing
activities
|
|
|
Bank loans and
advances
|
(1)
|
6
|
Change in credit
facilities
|
122
|
57
|
Payments of other
long-term debt, including lease obligations
|
(57)
|
(9)
|
Redemption of common
shares
|
—
|
(5)
|
Dividends paid to
non-controlling interests
|
(3)
|
(4)
|
Dividends paid to the
Corporation's Shareholders
|
(12)
|
(12)
|
|
49
|
33
|
Net change in cash
and cash equivalents during the period
|
(37)
|
(137)
|
Currency translation
on cash and cash equivalents
|
(1)
|
—
|
Cash and cash
equivalents - Beginning of the period
|
102
|
174
|
Cash and cash
equivalents - End of the period
|
64
|
37
|
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 TO
|
|
|
|
For the 3-month
periods ended March 31,
|
|
Canada
|
United
States
|
Other
countries
|
Total
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
Packaging
Products
|
|
|
|
|
|
|
|
|
Containerboard
|
329
|
328
|
231
|
206
|
1
|
—
|
561
|
534
|
Specialty
Products
|
56
|
57
|
104
|
100
|
1
|
—
|
161
|
157
|
Inter-segment
sales
|
(4)
|
(4)
|
(3)
|
(4)
|
—
|
—
|
(7)
|
(8)
|
|
381
|
381
|
332
|
302
|
2
|
—
|
715
|
683
|
Tissue
Papers
|
126
|
95
|
261
|
219
|
—
|
—
|
387
|
314
|
Inter-segment sale,
Corporate Activities, Recovery and Recycling
|
25
|
37
|
6
|
4
|
1
|
—
|
32
|
41
|
|
532
|
513
|
599
|
525
|
3
|
—
|
1,134
|
1,038
|
The reconciliation of operating income (loss) to EBITDA (A) by
business segment is as follows:
|
For the 3-month
period ended March 31, 2023
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate
Activities,
Recovery and
Recycling
|
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)
|
126
|
27
|
16
|
(35)
|
134
|
|
For the 3-month period
ended March 31, 2022
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate
Activities,
Recovery and
Recycling
|
Consolidated
|
Operating income
(loss)
|
44
|
24
|
(35)
|
(37)
|
(4)
|
Depreciation and
amortization
|
28
|
4
|
17
|
11
|
60
|
Gain on acquisitions,
disposals and others
|
—
|
(6)
|
—
|
—
|
(6)
|
Restructuring
costs
|
—
|
—
|
1
|
—
|
1
|
Unrealized loss (gain)
on derivative financial instruments
|
8
|
—
|
—
|
(1)
|
7
|
EBITDA
(A)
|
80
|
22
|
(17)
|
(27)
|
58
|
|
PAYMENTS FOR PROPERTY,
PLANT
AND EQUIPMENT
|
|
For the 3-month
periods ended
March 31,
|
(in millions of
Canadian dollars) (unaudited)
|
2023
|
2022
|
Packaging
Products
|
|
|
Containerboard
|
89
|
75
|
Specialty
Products
|
4
|
11
|
|
93
|
86
|
Tissue
Papers
|
9
|
5
|
Corporate
Activities, Recovery and Recycling
|
3
|
8
|
Total
acquisitions
|
105
|
99
|
Right-of-use assets
acquisitions
|
(8)
|
(21)
|
|
97
|
78
|
Acquisitions for
property, plant and equipment included in "Trade and other
payables"
|
|
|
Beginning of the
period
|
106
|
75
|
End of the
period
|
(63)
|
(51)
|
Payments for
property, plant and equipment
|
140
|
102
|
Proceeds from
disposals of property, plant and equipment
|
(3)
|
(6)
|
Payments for
property, plant and equipment net of proceeds from
disposals
|
137
|
96
|
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 repurchase, dividend increase 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: Used to assess the Corporation's
ability to pay its debt and evaluate financial leverage.
- EBITDA (A) margin: 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: Used to assess the
Corporation's consolidated financial performance on a comparable
basis.
- Net debt / Net debt + Shareholders' equity: Used to evaluate
the Corporation's financial leverage and thus the risk to
Shareholders.
- Working capital as a percentage of sales: Used to assess the
Corporation's operating liquidity performance.
- Adjusted cash flow per common share: Used to assess the
Corporation's financial flexibility.
- Free cash flow 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:
|
Q1
2023
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate
Activities,
Recovery and
Recycling
|
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
|
|
Q4 2022
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate
Activities,
Recovery and
Recycling
|
Consolidated
|
Operating income
(loss)
|
85
|
22
|
(86)
|
(41)
|
(20)
|
Depreciation and
amortization
|
30
|
5
|
17
|
10
|
62
|
Impairment
charges
|
8
|
3
|
75
|
—
|
86
|
Gain on acquisitions,
disposals and others
|
—
|
(10)
|
—
|
—
|
(10)
|
Restructuring
costs
|
—
|
—
|
2
|
—
|
2
|
Unrealized gain on
derivative financial instruments
|
(4)
|
—
|
—
|
—
|
(4)
|
EBITDA
(A)1
|
119
|
20
|
8
|
(31)
|
116
|
|
Q1 2022
|
(in millions of
Canadian dollars) (unaudited)
|
Containerboard
|
Specialty
Products
|
Tissue
Papers
|
Corporate
Activities,
Recovery and
Recycling
|
Consolidated
|
Operating income
(loss)
|
44
|
24
|
(35)
|
(37)
|
(4)
|
Depreciation and
amortization
|
28
|
4
|
17
|
11
|
60
|
Gain on acquisitions,
disposals and others
|
—
|
(6)
|
—
|
—
|
(6)
|
Restructuring
costs
|
—
|
—
|
1
|
—
|
1
|
Unrealized loss (gain)
on derivative financial instruments
|
8
|
—
|
—
|
(1)
|
7
|
EBITDA
(A)1
|
80
|
22
|
(17)
|
(27)
|
58
|
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 loss and net loss per common
share, as reported, with adjusted net earnings (loss)1
and adjusted net earnings (loss)1 per common share:
(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
|
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
As
reported
|
(75)
|
(27)
|
(15)
|
|
($0.75)
|
($0.27)
|
($0.15)
|
Specific
items:
|
|
|
|
|
|
|
|
Impairment
charges
|
152
|
86
|
—
|
|
$1.14
|
$0.64
|
—
|
Gain on acquisitions,
disposals and others
|
(2)
|
(10)
|
(6)
|
|
($0.01)
|
($0.09)
|
($0.05)
|
Restructuring
costs
|
1
|
2
|
1
|
|
$0.01
|
$0.02
|
$0.01
|
Unrealized loss (gain)
on derivative financial instruments
|
1
|
(4)
|
7
|
|
—
|
($0.03)
|
$0.05
|
Foreign exchange gain
on long-term debt and financial instruments
|
—
|
(3)
|
(1)
|
|
—
|
($0.02)
|
($0.01)
|
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
|
(35)
|
(22)
|
(1)
|
|
—
|
($0.03)
|
—
|
|
108
|
49
|
—
|
|
$1.07
|
$0.49
|
—
|
Adjusted1
|
33
|
22
|
(15)
|
|
$0.32
|
$0.22
|
($0.15)
|
Weighted average
basic number of common shares outstanding
|
|
|
|
|
100,361,627
|
100,361,627
|
100,822,921
|
The following table reconciles cash flow from (used by) operating
activities with EBITDA (A)1:
(in millions of
Canadian dollars) (unaudited)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
Cash flow from (used
by) operating activities
|
43
|
196
|
(73)
|
Changes in non-cash
working capital components
|
46
|
(96)
|
92
|
Net income taxes
paid
|
2
|
—
|
1
|
Net financing expense
paid
|
44
|
15
|
30
|
Provisions for
contingencies and charges and other liabilities, net of dividends
received
|
(1)
|
1
|
8
|
EBITDA
(A)1
|
134
|
116
|
58
|
The following table reconciles cash flow from (used by) operating
activities with cash flow from operating activities (excluding
changes in non-cash working capital components) and adjusted cash
flow from operating activities. 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)
|
Q1
2023
|
Q4 2022
|
Q1 2022
|
Cash flow from (used
by) operating activities
|
43
|
196
|
(73)
|
Changes in non-cash
working capital components
|
46
|
(96)
|
92
|
Cash flow from
operating activities (excluding changes in non-cash working capital
components)
|
89
|
100
|
19
|
Restructuring costs
paid
|
1
|
3
|
7
|
Adjusted cash flow
from operating activities1
|
90
|
103
|
26
|
Payments for property,
plant and equipment
|
(140)
|
(160)
|
(102)
|
Change in intangible
and other assets
|
(2)
|
(2)
|
(1)
|
Lease obligation
payments
|
(14)
|
(15)
|
(13)
|
Proceeds from
disposals of property, plant and equipment
|
3
|
11
|
6
|
|
(63)
|
(63)
|
(84)
|
Dividends paid to
non-controlling interests
|
(3)
|
(4)
|
(4)
|
Dividends paid to the
Corporation's Shareholders and to non-controlling
interests
|
(12)
|
(12)
|
(12)
|
Adjusted cash flow
used1
|
(78)
|
(79)
|
(100)
|
Adjusted cash flow
used1 per common share
(in Canadian
dollars)
|
($0.78)
|
($0.79)
|
($0.99)
|
Weighted average
basic number of common shares outstanding
|
100,361,627
|
100,361,627
|
100,822,921
|
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)
|
March31,
2023
|
December 31,
2022
|
March 31,
2022
|
Long-term
debt
|
2,044
|
1,931
|
1,510
|
Current portion of
long-term debt
|
88
|
134
|
69
|
Bank loans and
advances
|
2
|
3
|
7
|
Total
debt1
|
2,134
|
2,068
|
1,586
|
Less: Cash and cash
equivalents
|
(64)
|
(102)
|
(37)
|
Net debt1
as reported
|
2,070
|
1,966
|
1,549
|
Last twelve months
EBITDA (A)1
|
452
|
376
|
325
|
Net debt / EBITDA
(A) ratio1
|
4.6x
|
5.2x
|
4.8x
|
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-results-for-the-first-quarter-of-2023-301821448.html
SOURCE Cascades Inc.