PR Newswire | Nov 11, 2021 06:01AM EST

11/11 05:00 CST

Cascades Reports Results for the Third Quarter of 2021 KINGSEY FALLS, QC, Nov. 11, 2021

Good packaging market dynamics and improved performance in tissuepartially mitigate continued inflationary pressure on costs

KINGSEY FALLS, QC, Nov. 11, 2021 /PRNewswire/ - Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended September 30, 2021.

Q3 2021 Highlights (comparative figures have been restated to reflect discontinued operations2)

* Sales of $1,030 million (compared with $956 million in Q2 2021 (+8%) and $1,014 million in Q3 2020 (+2%)) * As reported (including specific items) * Operating income of $73 million (compared with $23 million in Q2 2021 (+217%) and $54 million in Q3 2020 (+35%)) * Operating income before depreciation and amortization (OIBD)1 of $136 million (compared with $87 million in Q2 2021 (+56%) and $123 million in Q3 2020 (+11%)) * Net earnings per common share of $0.32 (compared with $0.02 in Q2 2021 and $0.51 in Q3 2020)

* Adjusted (excluding specific items1) * Operating income of $44 million (compared with $34 million in Q2 2021 (+29%) and $64 million in Q3 2020 (-31%)) * OIBD of $107 million (compared with $98 million in Q2 2021 (+9%) and $133 million in Q3 2020 (-20%)) * Net loss per common share of $0.01 (compared with net earnings per common share of $0.07 in Q2 2021 and net earnings per common share of $0.50 in Q3 2020)

* Following the July 2021 announcement regarding the monetization of its 57.6% controlling equity interest in Reno de Medici S.p.A. (RDM) for (euro)1.45 per share, or $461 million including foreign exchange contracts and before related transaction fees of $11 million, financial information for the Boxboard Europe segment is presented as discontinued operations. The transaction closed on October 26, 20212. * Net debt1 of $1,760 million as at September 30, 2021 (compared with $1,707 million as at June 30, 2021). Net debt to adjusted OIBD ratio1 of 3.8x up from 3.5x as at June 30, 2021. Taking into account the monetization of our investment in RDM, net debt to adjusted OIBD ratio1 would have been 2.8x. * During the third quarter, the Corporation purchased 1,651,600 common shares for cancellation at a weighted average price of $15.45. * Total capital expenditures, net of disposals, of $4 million in Q3 2021, compared to $65 million in Q2 2021 and to $39 million in Q3 20202; Forecasted 2021 net capital expenditures of between $275 million and $300 million, encompassing $155 million for the Bear Island containerboard conversion project in Virginia, USA.

1 Please refer to the "Supplemental Information on Non-IFRS Measures" sectionfor a complete reconciliation.

2 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

Mario Plourde, President and CEO, commented: "Our third quarter performance reflects the ongoing dynamic nature of the North American macro environment and the announced production impact in our containerboard segment related to water effluent treatment system issues at our Niagara Falls complex. We are encouraged with our results given this context, and with the sequential improvement in our tissue business. We continued to see inflationary pressures on input costs, notably raw materials, but also in labour, transportation and energy, across our operations in the third quarter, the effects of which were partially offset by the roll-out of announced price increases and our continued cost management initiatives. Sequentially, in containerboard, good demand levels and realized benefits from the continued roll-out of price increases helped to offset higher raw material prices and the impact from reduced production at our Niagara Falls complex, which reduced our sequential OIBD by $26 million and $10 million, respectively. Specialty packaging results reflected solid demand and incremental benefits from price increases which, combined, largely mitigated higher costs. On the tissue side, demand and pricing trends were more positive sequentially, while higher input costs, notably raw materials and transportation, remained headwinds.

At the corporate level, we successfully completed the monetization of our majority 57.6% equity position in Reno de Medici in late October. Our exit from European boxboard markets, recent 50% dividend increase and ongoing share buy-back program through which 1.65 million shares were repurchased in the third quarter, underscore our commitment to creating long term value for the Corporation and our Shareholders. As part of our focus to reinforce our financial flexibility and optimize our capital structure through a strategic deployment of capital, we subsequently completed the repurchase of US$299 million of our long-term notes on November 9, 2021."

Discussing near-term outlook, Mr. Plourde commented, "Looking ahead, we are forecasting sequentially stable results for the fourth quarter, with the impact of inflationary pressures on input costs largely mitigated by steady demand and the roll-out of price increases in our business segments. In containerboard, solid demand and ongoing flow-through of the third price increase are expected to offset higher raw material costs and inflationary headwinds in input costs. Likewise, good demand and price increases in Specialty packaging are expected to counter cost pressure. Finally, considering usual seasonal softness, we are forecasting results and demand levels in our tissue papers segment to be stable sequentially, with continued benefits from the ongoing roll-out of sales price increases countering higher raw material prices and pressures on costs."

Financial Summary

Selected consolidated information

(in millions of Canadian dollars, except amounts perQ3 2021 Q2 2021Q3 2020common share) (unaudited) ^2



Sales 1,030 956 1,014

As Reported

Operating income before depreciation and 136 87 123 amortization (OIBD)^1

Operating income 73 23 54

Net earnings 32 3 49

per common share $0.32 $0.02 $0.51

Adjusted^1

Operating income before depreciation and 107 98 133 amortization (OIBD)

Operating income 44 34 64

Net earnings (loss) (1) 8 48

per common share ($0.01) $0.07 $0.50

Margin (OIBD) 10.4 %10.3 %13.1 %

1 Please refer to the "Supplemental Information on Non-IFRS Measures" sectionfor a complete reconciliation.

2 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

Segmented OIBD as reported

(in millions of Canadian dollars) (unaudited)Q3 2021Q2 2021Q3 2020^2



Packaging Products

Containerboard 88 95 101

Boxboard Europe 39 11 31

Specialty Products 17 18 16



Tissue Papers 47 (5) 25



Corporate Activities (16) (21) (19)

Total before discontinued operations 175 98 154

Discontinued operations - Boxboard Europe (39) (11) (31)

OIBD as reported 136 87 123

1 Please refer to the "Supplemental Information on Non-IFRS Measures" sectionfor a complete reconciliation.

2 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

Segmented adjusted OIBD1

(in millions of Canadian dollars) (unaudited)Q3 2021Q2 2021Q3 2020^2



Packaging Products

Containerboard 94 100 100

Boxboard Europe 17 11 29

Specialty Products 17 18 16



Tissue Papers 12 1 36



Corporate Activities (16) (21) (19)

Total before discontinued operations 124 109 162

Discontinued operations - Boxboard Europe (17) (11) (29)

Adjusted OIBD^1 107 98 133

1 Please refer to the "Supplemental Information on Non-IFRS Measures" sectionfor a complete reconciliation.

2 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

Analysis of results for the three-month period ended September 30, 2021 (compared to the same period last year2)

Sales of $1,030 million increased by $16 million, or 2%, compared with the same period last year. This was driven by better pricing and mix in the packaging segments. These benefits were partially offset by a less favourable Canadian dollar - US dollar exchange rate, and lower volumes in the Containerboard segment as a result of the water effluent system issues at the Niagara Falls complex.

The Corporation generated an operating income before depreciation and amortization (OIBD) of $136 million in the third quarter of 2021, up from $123 million in the third quarter of 2020. On an adjusted basis1, third quarter OIBD totaled $107 million, a decrease of $26 million, or 20% from the $133 million generated in the same period last year. This decrease is largely attributable to higher raw material costs and inflationary pressures in labour, transportation and energy in all segments, and lower volumes in Containerboard. There were partially offset by benefits of pricing increases in all business segments and better mix.

The main specific items, before income taxes, that impacted our third quarter 2021 OIBD and/or net earnings were:

* $39 million of gains from the sale of buildings related to closed plants in the USA and Canada recorded in Tissue Papers segment (OIBD and net earnings); * $5 million of restructuring charges and closure costs recorded in Containerboard Packaging segment and Tissue Papers segment as part of profitability improvement and restructuring initiatives (OIBD and net earnings); * $5 million unrealized loss on financial instruments (OIBD and net earnings); * $3 million foreign exchange loss on long-term debt and financial instruments (net earnings); * $20 million total gain from a business combination and an unrealized gain on financial instruments within discontinued operations (net earnings).

For the 3-month period ended September 30, 2021, the Corporation posted net earnings of $32 million, or $0.32 per common share, compared to net earnings of $49 million, or $0.51 per common share, in the same period of 2020. On an adjusted basis1, the Corporation generated net loss of $1 million in the third quarter of 2021, or $(0.01) per common share, compared to net earnings of $48 million, or $0.50 per common share, in the same period of 2020.

1 Please refer to the "Supplemental Information on Non-IFRS Measures" sectionfor a complete reconciliation.

2 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

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 December 9, 2021 to shareholders of record at the close of business on November 24, 2021. This dividend is an "eligible dividend" as per the Income Tax Act (R.C.S. (1985), Canada). During the third quarter of 2021, Cascades purchased 1,651,600 common shares for cancellation at a weighted average price of $15.45.

2021 Third Quarter Results Conference Call Details

Management will discuss the 2021 third 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 dial-in 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 December 11, 2021 by dialing 1-888-390-0541 (international dial-in 1-416-764-8677), access code 673337.

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

SeptemberDecember (in millions of Canadian dollars) (unaudited) 30, 31, 2021 2020

Assets

Current assets

Cash and cash equivalents 151 384

Accounts receivable 545 659

Current income tax assets 19 23

Inventories 502 569

Current portion of financial assets 11 5

Assets classified as held for sale 1,066 -

2,294 1,640

Long-term assets

Investments in associates and joint ventures 87 82

Property, plant and equipment 2,441 2,772

Intangible assets with finite useful life 129 160

Financial assets 5 16

Other assets 46 50

Deferred income tax assets 133 170

Goodwill and other intangible assets with indefinite 510 522 useful life

5,645 5,412

Liabilities and Equity

Current liabilities

Bank loans and advances 7 12

Trade and other payables 637 861

Current income tax liabilities 12 17

Current portion of long-term debt 74 102

Current portion of provisions for contingencies and 11 14 charges

Current portion of financial liabilities and other 20 25 liabilities

Liabilities classified as held for sale 698 -

1,459 1,031

Long-term liabilities

Long-term debt 1,830 1,949

Provisions for contingencies and charges 53 57

Financial liabilities 6 6

Other liabilities 117 202

Deferred income tax liabilities 196 210

3,661 3,455

Equity

Capital stock 614 622

Contributed surplus 13 13

Retained earnings 1,181 1,146

Accumulated other comprehensive loss (27) (28)

Equity attributable to Shareholders 1,781 1,753

Non-controlling interests including share of assets and 203 204 liabilities held for sale

Total equity 1,984 1,957

5,645 5,412

CONSOLIDATED STATEMENTS OF EARNINGS

For the 3-month periods endedFor the 9-month periods ended September 30, September 30,

(in millions of Canadian dollars, except per common share amounts and2021 2020 2021 2020 number of common shares) (unaudited)

Sales 1,030 1,014 2,928 3,075

Cost of sales and expenses

Cost of sales (including depreciation and amortization of $63 million for 3-month period 901 867 2,532 2,585 (2020 - $69 million) and $192 million for 9-month period (2020 - $192 million))

Selling and administrative 86 83 260 276 expenses

Gain on acquisitions, (39) (7) (39) (5) disposals and others

Impairment charges and 5 16 16 31 restructuring costs

Foreign exchange (1) - 1 (1) loss (gain)

Loss on derivative 5 1 18 1 financial instruments

957 960 2,788 2,887

Operating income 73 54 140 188

Financing expense22 24 64 76

Interest expense on employee 1 1 3 3 future benefits

Loss on repurchase of - 6 - 6 long-term debt

Foreign exchange loss (gain) on long-term debt 3 (11) (3) (3) and financial instruments

Share of results of associates and(4) (3) (11) (9) joint ventures

Earnings before 51 37 87 115 income taxes

Provision for (recovery of) 30 (7) 38 10 income taxes

Net earnings from continuing operations including 21 44 49 105 non-controlling interests for the period

Results from discontinued 25 14 30 52 operations

Net earnings including non-controlling 46 58 79 157 interests for the period

Net earnings attributable to 14 9 22 32 non-controlling interests

Net earnings attributable to 32 49 57 125 Shareholders for the period

Net earnings from continuing operations per common share

Basic $0.18 $0.43 $0.39 $1.01

Diluted $0.18 $0.42 $0.39 $0.99

Net earnings per common share

Basic $0.32 $0.51 $0.56 $1.32

Diluted $0.32 $0.50 $0.56 $1.30

Weighted average basic number of 102,129,769 95,019,694 102,229,534 94,577,538 common shares outstanding

Weighted average number of diluted103,156,393 96,077,440 103,292,002 95,735,264 common shares



Net earnings attributable to Shareholders:

Continuing 18 41 40 95 operations

Discontinued 14 8 17 30 operations

Net earnings 32 49 57 125

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the 3-month periods endedFor the 9-month periods ended September 30, September 30,

(in millions of Canadian 2021 2020 2021 2020 dollars) (unaudited)

Net earnings including non-controlling 46 58 79 157 interests for the period

Other comprehensive income (loss)

Items that may be reclassified subsequently to earnings

Translation adjustments

Change in foreign currency translation of 26 (23) (3) 20 foreign subsidiaries

Change in foreign currency translation of foreign (1) 9 (21) 23 subsidiaries from discontinued operations

Change in foreign currency translation related to net (15) 13 3 (13) investment hedging activities

Change in foreign currency translation related to net investment - (6) 12 (14) hedging activities from discontinued operations

Cash flow hedges

Change in fair value of commodity 2 2 5 2 derivative financial instruments

Recovery of (provision for) 1 - (2) - income taxes

Provision for income taxes from - - (2) - discontinued operations

13 (5) (8) 18

Items that are not released to earnings

Actuarial gain (loss) on 8 (4) 29 (19) employee future benefits

Recovery of (provision for) (1) 1 (7) 5 income taxes

7 (3) 22 (14)

Other comprehensive 20 (8) 14 4 income (loss)

Comprehensive income including non-controlling 66 50 93 161 interests for the period

Comprehensive income attributable to 14 12 13 43 non-controlling interests for the period

Comprehensive income attributable to 52 38 80 118 Shareholders for the period

Comprehensive income attributable to Shareholders:

Continuing 38 31 65 89 operations

Discontinued 14 7 15 29 operations

Comprehensive 52 38 80 118 income

CONSOLIDATED STATEMENTS OF EQUITY

For the 9-month period ended September 30, 2021

(in millions of ACCUMULATED TOTAL EQUITY Canadian CAPITALCONTRIBUTEDRETAINEDOTHER ATTRIBUTABLENON-CONTROLLINGTOTAL dollars) STOCK SURPLUS EARNINGSCOMPREHENSIVETO INTERESTS EQUITY(unaudited) LOSS SHAREHOLDERS

Balance - Beginning of 622 13 1,146 (28) 1,753 204 1,957 period

Comprehensive income (loss)

Net earnings - - 57 - 57 22 79

Other comprehensive - - 22 1 23 (9) 14 income (loss)

- - 79 1 80 13 93

Dividends - - (29) - (29) (10) (39)

Dividends paid to non-controlling- - - - - (3) (3) interests from discontinued operations

Issuance of common shares upon exercise 2 - - - 2 - 2 of stock options

Redemption of (10) - (16) - (26) - (26) common shares

Acquisition of non-controlling- - 1 - 1 (1) - interests

Balance - End 614 13 1,181 (27) 1,781 203 1,984 of period



For the 9-month period ended September 30, 2020

(in millions of ACCUMULATED TOTAL EQUITY Canadian CAPITALCONTRIBUTEDRETAINEDOTHER ATTRIBUTABLENON-CONTROLLINGTOTAL dollars) STOCK SURPLUS EARNINGSCOMPREHENSIVETO INTERESTS EQUITY(unaudited) LOSS SHAREHOLDERS

Balance - Beginning of 491 15 1,003 (17) 1,492 177 1,669 period

Comprehensive income (loss)

Net earnings - - 125 - 125 32 157

Other comprehensive - - (14) 7 (7) 11 4 income (loss)

- - 111 7 118 43 161

Dividends - - (22) - (22) (11) (33)

Dividends paid to non-controlling- - - - - (2) (2) interests from discontinued operations

Issuance of common shares upon exercise 9 (2) - - 7 - 7 of stock options

Redemption of (2) - (3) - (5) - (5) common shares

Balance - End 498 13 1,089 (10) 1,590 207 1,797 of period

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the 3-month periods endedFor the 9-month periods ended September 30, September 30,

(in millions of Canadian dollars)2021 2020 2021 2020 (unaudited)

Operating activities from continuing operations

Net earnings attributable to 32 49 57 125 Shareholders for the period

Results from discontinued (25) (14) (30) (52) operations

Results from discontinued operations 11 6 13 22 attributable to non-controlling interests

Net earnings from continuing 18 41 40 95 operations

Adjustments for:

Financing expense and interest expense on 23 25 67 79 employee future benefits

Loss on repurchase of - 6 - 6 long-term debt

Depreciation and 63 69 192 192 amortization

Gain on acquisitions, (39) (7) (39) (5) disposals and others

Impairment charges and 5 16 16 31 restructuring costs

Unrealized loss on derivative 5 1 18 1 financial instruments

Foreign exchange loss (gain) on long-term debt 3 (11) (3) (3) and financial instruments

Provision for (recovery of) 30 (7) 38 10 income taxes

Share of results of associates and(4) (3) (11) (9) joint ventures

Net earnings attributable to 3 3 9 10 non-controlling interests

Net financing (41) (48) (85) (71) expense paid

Premium paid on repurchase of - (4) - (4) long-term debt

Net income taxes 1 (1) 2 8 received (paid)

Dividends - 2 5 7 received

Provisions for contingencies and(9) (4) (22) (20) charges and other liabilities

58 78 227 327

Changes in non-cash working (13) 35 (85) (8) capital components

45 113 142 319

Investing activities from continuing operations

Disposals in associates and - 4 1 3 joint ventures

Payments for property, plant (54) (46) (191) (147) and equipment

Proceeds from disposals of 50 7 51 9 property, plant and equipment

Change in intangible and (3) (3) (14) (7) other assets

Cash received from business - - - 2 combinations

(7) (38) (153) (140)

Financing activities from continuing operations

Bank loans and - - (5) (2) advances

Change in credit 1 (138) - (81) facilities

Issuance of unsecured senior - 409 - 409 notes, net of related expenses

Repurchase of unsecured senior - (264) - (264) notes

Increase in other- - 5 - long-term debt

Payments of other long-term debt, (19) (12) (63) (32) including lease obligations

Settlement of derivative - - - 1 financial instruments

Issuance of common shares 2 - 2 7 upon exercise of stock options

Redemption of (26) - (26) (5) common shares

Payment of other - - - (121) liabilities

Dividends paid to non-controlling interests and (4) (4) (12) (11) acquisition of non-controlling interests

Dividends paid to the Corporation's(13) (7) (29) (22) Shareholders

(59) (16) (128) (121)

Change in cash and cash equivalents (21) 59 (139) 58 during the period from continuing operations

Change in cash and cash equivalents from discontinued operations and - 8 (94) 14 reclassification of cash and cash equivalent as held for sale

Net change in cash and cash (21) 67 (233) 72 equivalents during the period

Currency translation on 1 (2) - - cash and cash equivalents

Cash and cash equivalents - 171 162 384 155 Beginning of the period

Cash and cash equivalents - End151 227 151 227 of the period

SEGMENTED INFORMATION

The Corporation analyzes the performance of its operating segments based on their operating income before depreciation and amortization, which is not a measure of performance under International Financial Reporting Standards (IFRS). However, the chief operating decision-maker (CODM) uses this performance measure to assess the operating performance of each reportable segment. Earnings for each segment are prepared on the same basis as those of the Corporation. Intersegment operations are recorded on the same basis as sales to third parties, which are at fair market value. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in its most recent audited consolidated financial statements for the year ended December 31, 2020.

The Corporation's operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The Chief Executive Officer has authority for resource allocation and management of the Corporation's performance and is therefore the CODM.

The Corporation's operations are managed in four segments: Containerboard, Boxboard Europe and Specialty Products (which constitutes the Corporation's Packaging Products), and Tissue Papers.

SALES TO

For the 3-month periods ended September 30

Canada United Italy Other countriesTotal States

(in millions of Canadian dollars)2021202020212020202120202021 2020 2021 2020 (unaudited)

Packaging Products

Containerboard 303 307 204 199 - - - - 507 506

Boxboard Europe - - - - 86 79 269 182 355 261

Specialty 42 42 102 75 - - - - 144 117 Products

Inter-segment (3) (2) (7) (2) - - - - (10) (4) sales

342 347 299 272 86 79 269 182 996 880

Tissue Papers 68 72 276 292 - - - - 344 364

Inter-segment sales and 40 32 5 (1) - - - - 45 31 Corporate Activities

450 451 580 563 86 79 269 182 1,3851,275

Discontinued operations - - - - - (86)(79)(269) (182) (355)(261)Boxboard Europe

450 451 580 563 - - - - 1,0301,014

SALES TO

For the 9-month periods ended September 30,

Canada United Italy Other countriesTotal States

(in millions of Canadian 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 dollars) (unaudited)

Packaging Products

Containerboard903 835 604 582 - - - 1 1,5071,418

Boxboard - - - - 260 240 634 558 894 798 Europe

Specialty 147 119 250 229 - - - 2 397 350 Products

Inter-segment (10) (9) (14) (3) - - - - (24) (12) sales

1,040945 840 808 260 240 634 561 2,7742,554

Tissue Papers 183 207 750 1,026- - - 1 933 1,234

Inter-segment sales and 105 86 10 (1) - - - - 115 85 Corporate Activities

1,3281,2381,6001,833260 240 634 562 3,8223,873

Discontinued operations - - - - - (260)(240)(634) (558)(894)(798)Boxboard Europe

1,3281,2381,6001,833- - - 4 2,9283,075

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

For the 3-month periods endedFor the 9-month periods ended September 30, September 30,

(in millions of Canadian 2021 2020 2021 2020 dollars) (unaudited)

Packaging Products

Containerboard88 101 279 286

Boxboard 39 31 73 104 Europe

Specialty 17 16 53 43 Products

144 148 405 433

Tissue Papers 47 25 60 118

Corporate (16) (19) (60) (67) Activities

Operating income before depreciation and 175 154 405 484 amortization before discontinued operations

Discontinued operations - (39) (31) (73) (104) Boxboard Europe

Operating income before depreciation 136 123 332 380 and amortization

Depreciation and (63) (69) (192) (192) amortization

Financing expense and interest expense on (23) (25) (67) (79) employee future benefits

Loss on repurchase of - (6) - (6) long-term debt

Foreign exchange gain (loss) on (3) 11 3 3 long-term debt and financial instruments

Share of results of 4 3 11 9 associates and joint ventures

Earnings before income 51 37 87 115 taxes

PAYMENTS FOR PROPERTY, PLANT AND EQUIPMENT

For the 3-month periods endedFor the 9-month periods ended September 30, September 30,

(in millions of Canadian 2021 2020 2021 2020 dollars) (unaudited)

Packaging Products

Containerboard33 36 139 67

Boxboard 11 14 28 23 Europe

Specialty 7 6 23 15 Products

51 56 190 105

Tissue Papers 14 23 26 62

Corporate 15 5 26 16 Activities

Total acquisitions before 80 84 242 183 discontinued operations

Discontinued operations - (11) (14) (28) (23) Boxboard Europe

Total 69 70 214 160 acquisitions

Proceeds from disposals of property, (50) (7) (51) (9) plant and equipment

Right-of-use assets acquisitions and (18) (21) (30) (32) acquisitions included in other debts

1 42 133 119

Acquisitions for property, plant and equipment included in "Trade and other payables"

Beginning of 42 30 46 52 period

End of period (39) (33) (39) (33)

Payments for property, plant and 4 39 140 138 equipment net of proceeds from disposals

SUPPLEMENTAL INFORMATION ON NON-IFRS 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 those of other corporations and some of them 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 gain or losses on investments, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.

RECONCILIATION OF NON-IFRS 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 measures and 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 are used in our financial disclosures:

* Operating income before depreciation and amortization (OIBD): Used to assess operating performance and the contribution of each segment when excluding depreciation and amortization. OIBD is widely used by investors as a measure of a corporation's ability to incur and service debt and as an evaluation metric. * Adjusted OIBD: Used to assess operating performance and the contribution of each segment on a comparable basis. * Adjusted operating income: Used to assess operating performance of each segment on a comparable basis. * Adjusted net earnings: Used to assess the Corporation's consolidated financial performance on a comparable basis. * Adjusted free 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. * Net debt to adjusted OIBD ratio: Used to measure the Corporation's credit performance and evaluate financial leverage. * Net debt to adjusted OIBD ratio on a pro-forma basis: Used to measure the Corporation's credit performance and evaluate the financial leverage on a comparable basis, including significant business acquisitions and excluding significant business disposals, if any.

Non-IFRS 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 measures may differ from those of other corporations. Any such modification or reformulation may be significant.

The reconciliation of operating income (loss) to OIBD, to adjusted operating income (loss) and to adjusted OIBD by business segment is as follows:

Q3 2021

Exclusion of Including Discontinued Operations DiscontinuedAs reported Operations

(in millions of Canadian ContainerboardBoxboardSpecialtyTissueCorporate Boxboard Consolidateddollars) Europe Products PapersActivitiesEurope (unaudited)

Operating 58 24 13 29 (27) (24) 73 income (loss)

Depreciation and 30 15 4 18 11 (15) 63 amortization

Operating income (loss) before 88 39 17 47 (16) (39) 136 depreciation and amortization

Specific items:

Gain on acquisitions,- (18) - (39) - 18 (39) disposals and others

Restructuring1 - - 4 - - 5 costs

Unrealized loss (gain) on derivative5 (4) - - - 4 5 financial instruments

6 (22) - (35) - 22 (29)

Adjusted operating income (loss) before 94 17 17 12 (16) (17) 107 depreciation and amortization

Adjusted operating 64 2 13 (6) (27) (2) 44 income (loss)

Q2 2021

Exclusion of Including Discontinued Operations DiscontinuedAs reported Operations

(in millions of Canadian ContainerboardBoxboardSpecialtyTissueCorporate Boxboard Consolidateddollars) Europe Products PapersActivitiesEurope (unaudited)

Operating 64 (1) 14 (22) (33) 1 23 income (loss)

Depreciation and 31 12 4 17 12 (12) 64 amortization

Operating income (loss) before 95 11 18 (5) (21) (11) 87 depreciation and amortization

Specific items :

Loss on acquisitions,- 2 - - - (2) - disposals and others

Impairment - - - 1 - - 1 charges

Restructuring- - - 5 - - 5 costs

Unrealized loss (gain) on derivative5 (2) - - - 2 5 financial instruments

5 - - 6 - - 11

Adjusted operating income (loss) before 100 11 18 1 (21) (11) 98 depreciation and amortization

Adjusted operating 69 (1) 14 (16) (33) 1 34 income (loss)

Q3 2020

Exclusion of As reported in 2020 DiscontinuedAs reported Operations^1

(in millions of Canadian ContainerboardBoxboardSpecialtyTissueCorporate Boxboard Consolidateddollars) Europe Products PapersActivitiesEurope (unaudited)

Operating 71 19 11 3 (31) (19) 54 income (loss)

Depreciation and 30 12 5 22 12 (12) 69 amortization

Operating income (loss) before 101 31 16 25 (19) (31) 123 depreciation and amortization

Specific items:

Gain on acquisitions,(5) - - (2) - - (7) disposals and others

Impairment - - - 13 - - 13 charges

Restructuring3 - - - - - 3 costs

Unrealized loss (gain) on derivative1 (2) - - - 2 1 financial instruments

(1) (2) - 11 - 2 10

Adjusted operating income (loss) before 100 29 16 36 (19) (29) 133 depreciation and amortization

Adjusted operating 70 17 11 14 (31) (17) 64 income (loss)

1 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

Net earnings, as per IFRS, are reconciled below with operating income, adjusted operating income and adjusted operating income before depreciation and amortization:

Q3 Q2 Q3 (in millions of Canadian dollars) (unaudited) 202120212020^ 1



Net earnings attributable to Shareholders for the period 32 3 49

Net earnings attributable to non-controlling interests 14 2 9

Results from discontinued operations (25)3 (14)

Provision for (recovery of) income taxes 30 2 (7)

Share of results of associates and joint ventures (4) (5) (3)

Foreign exchange loss (gain) on long-term debt and financial 3 (3) (11) instruments

Financing expense and interest expense on employee future 23 21 31 benefits and loss on repurchase of long-term debt

Operating income 73 23 54

Specific items:

Gain on acquisitions, disposals and others (39)- (7)

Impairment charges - 1 13

Restructuring costs 5 5 3

Unrealized loss on derivative financial instruments 5 5 1

(29)11 10

Adjusted operating income 44 34 64

Depreciation and amortization 63 64 69

Adjusted operating income before depreciation and 107 98 133 amortization

1 2020 consolidated results have been adjusted to reflect retrospectiveadjustments of discontinued operations.

The following table reconciles net earnings and net earnings per common share, as per IFRS, with adjusted net earnings (loss) and adjusted net earnings (loss) per common share:

(in millions of Canadian dollars, NET EARNINGS NET EARNINGS (LOSS) except per common share amounts) (LOSS) (unaudited) PER COMMON SHARE ^1

Q3 Q2 Q3 Q3 2021Q2 2021Q3 2020 202120212020



As per IFRS 32 3 49 $0.32 $0.02 $0.51

Specific items:

Gain on acquisitions, disposals and (39)- (7) ($0.31)- ($0.05)others

Impairment charges - 1 13 - $0.01 $0.10

Restructuring costs 5 5 3 $0.04 $0.04 $0.03

Unrealized loss on derivative 5 5 1 $0.03 $0.03 $0.01 financial instruments

Loss on repurchase of long-term debt - - 6 - - $0.05

Foreign exchange loss (gain) on long-term debt and financial 3 (3) (11)$0.03 ($0.03)($0.12)instruments

Included in discontinued operations, (20)- (2) ($0.12)- ($0.01)net of tax

Tax effect on specific items, other tax adjustments and attributable to 13 (3) (4) - - ($0.02)non-controlling interest^1

(33)5 (1) ($0.33)$0.05 ($0.01)

Adjusted (1) 8 48 ($0.01)$0.07 $0.50

Specific amounts per common share are calculated on an after-tax basis and are net of the portion attributable to non-controlling interests. Per share1 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 "Provision for (recovery of) income taxes" section for more details.

The following table reconciles cash flow from operating activities from continuing operations with operating income and operating income before depreciation and amortization:

(in millions of Canadian dollars) (unaudited) Q3 Q2 Q3 2020^ 2021 2021 1

Cash flow from operating activities from continuing 45 40 113 operations

Changes in non-cash working capital components 13 47 (35)

Depreciation and amortization (63) (64) (69)

Net income taxes paid (received) (1) 1 1

Net financing expense paid 41 4 48

Premium paid on long-term debt repurchase - - 4

Gain on acquisitions, disposals and others 39 - 7

Impairment charges and restructuring costs (5) (6) (16)

Unrealized loss on derivative financial instruments (5) (5) (1)

Provisions for contingencies and charges and other 9 6 2 liabilities

Operating income 73 23 54

Depreciation and amortization 63 64 69

Operating income before depreciation and amortization 136 87 123

1 2020 consolidated results and consolidated cash flows have been adjusted toreflect retrospective adjustments of discontinued operations.

The following table reconciles cash flow from operating activities from continuing operations with cash flow from operating activities from continuing operations (excluding changes in non-cash working capital components) and adjusted cash flow from operating activities from continuing operations. It also reconciles adjusted cash flow from operating activities from continuing operations to adjusted free cash flow, which is also calculated on a per common share basis:

(in millions of Canadian dollars, except per common share amounts or otherwise Q3 2021 Q2 2021 Q3 2020^2 noted) (unaudited)

Cash flow from operating activities from 45 40 113 continuing operations

Changes in non-cash working capital 13 47 (35) components

Cash flow from operating activities from continuing operations(excluding changes in58 87 78 non-cash working capital components)

Specific items paid 12 2 9

Adjusted cash flow from operating 70 89 87 activities from continuing operations

Capital expenditures & other assets^1 and right-of-use assets payments, net of (18) (83) (53) disposals

Dividends paid to the Corporation's Shareholders and to non-controlling (17) (10) (11) interests

Adjusted free cash flow generated (used) 35 (4) 23

Adjusted free cash flow generated (used) $0.34 ($0.04) $0.24 per common share (in Canadian dollars)

Weighted average basic number of common 102,129,769102,281,07295,019,694shares outstanding

1 Excluding increase in investments.

2 2020 consolidated cash flows have been adjusted to reflect retrospectiveadjustments of discontinued operations.

The following table reconciles total debt and net debt with the ratio of net debt to adjusted operating income before depreciation and amortization (adjusted OIBD):

September 30,June September (in millions of Canadian dollars) 30, 30, (unaudited) 2021 2021 2020

Long-term debt 1,830 1,799 1,947

Current portion of long-term debt 74 72 253

Bank loans and advances 7 7 9

Total debt 1,911 1,878 2,209

Less: Cash and cash equivalents 151 171 227

Net debt as reported 1,760 1,707 1,982

Adjusted OIBD as reported on a last twelve 466 492 535 months basis

Net debt / Adjusted OIBD ratio 3.8 x 3.5 x 3.1 x



Net debt as reported 1,760 1,707 1,982

Net proceeds of disposal of RDM (450) (461) -

Pro forma net debt 1,310 1,246 1,982

Adjusted OIBD as reported on a last twelve 466 492 535 months basis

Pro forma net debt / Adjusted OIBD ratio 2.8 x 2.5 x 3.7 x

Source:Allan HoggVice-President and Chief Financial Officer

Follow us on social media:Website: www.cascades.comTwitter: twitter.com/@CascadesInvest Facebook: facebook.com/Cascades YouTube: youtube.com/Cascades

View original content: https://www.prnewswire.com/news-releases/cascades-reports-results-for-the-third-quarter-of-2021-301421640.html

SOURCE Cascades Inc.