CASCADE S NBF Qubec Confrence Qubec Confrence June 5, 2012 - - PowerPoint PPT Presentation

CASCADE S

NBF Québec Conférence Québec Conférence

June 5, 2012

DISCLAIMER

Certain statements in this presentation, including statements regarding future results and performance, are forward-looking statements within the meaning of securities legislation based on current expectations. The g g g p 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 Company’s products, the prices and availability of raw materials, changes in the relative values of certain currencies, fluctuations in selling prices and adverse h i l k t d i d t diti Thi t ti l i l d i i di ll changes in general market and industry conditions. This presentation also includes price indices as well as variance and sensitivity analyses that are intended to provide the reader with a better understanding of the trends related to our business activities. These items are based on the best estimates available to the Company. The financial information included in this presentation also contains certain data that are not measures of performance under IFRS (“non-IFRS measures”). For example, the Company uses earnings before interest, taxes, depreciation and amortization (EBITDA) because it is the measure used by management to assess the operating and financial performance of the Company’s operating segments Such information is the operating and financial performance of the Company s operating segments. Such information is reconciled to the most directly comparable financial measures, as set forth in the “Supplemental Information

• n Non-IFRS Measures” section of our most recent annual report or earnings press release.

S ifi it d fi d it h h f i i t f t f f ilit hi Specific items are defined as items such as charges for impairment of assets, for facility or machine closures, debt restructuring charges, gains or losses on sales of business units, unrealized gains or losses

• n derivative financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses
• n long-term debt and other significant items of an unusual or non-recurring nature.

2

All amounts in this presentation are in Canadian dollars unless otherwise indicated.

OVERVIEW – PACKAGING AND TISSUE PRODUCTS

Boxboard Containerboard Specialty products Tissue papers

3

Leading NA packaging and tissue manufacturer with substantial recycling capabilities Leading NA packaging and tissue manufacturer with substantial recycling capabilities

OVERVIEW – BALANCED PLAY

Cascades

Q1-2012 LTM Sales1: $3,780 Q1-2012 LTM EBITDA1, 2: $274

($ in millions)

P k i Q1 2012 LTM EBITDA , : $274 Ti P Packaging

77% of Sales 66% of EBITDA

Tissue Papers

23% of Sales 34% of EBITDA Boxboard Europe

24% of Sales 21% f EBITDA

Containerboard

31% of Sales 31% f EBITDA

Specialty Products

22% of Sales 14% f EBITDA 21% of EBITDA 31% of EBITDA 14% of EBITDA

4

1 Adjusted for the full year consolidation of Reno de Medici and Papersource. 2 EBITDA excluding specific items and discontinued operations. Breakdown of sales and EBITDA before eliminations & corporate activities.

Exposure to two healthiest P&P sectors and less cyclical end Exposure to two healthiest P&P sectors and less cyclical end-

• markets

markets

OVERVIEW – CLOSED-LOOP BUSINESS MODEL

100+ business units 100+ business units

76% recycled fibre (2.9M tons)

23 units

NA integration rate (2011): 33% (580K tons)

30 units May be sent to recycling centers

NA integration rate (2011): 47%

62 units

47% 5

Including the 6 manufacturing/converting tissue papers units and Reno De Medici’s units.

Upstream and downstream integration Upstream and downstream integration

OVERVIEW – RECYCLED FIBRE SUPPLY

Recycled Fibre Supply Sources – North America

2008

Cascades Recovery Spot Purchases 19%

2011

Spot Purchases 20% Cascades Recovery d I t l Recovery and Internal 35% 19% and Internal 32% Contractual agreements Contractual agreements agreements 46% 48%

6

Control over 80% of our fibre supply despite greater concentration on the supply side Control over 80% of our fibre supply despite greater concentration on the supply side

MARKET DYNAMICS – DEMAND

Packaging Tissue

North American Box Shipments

424 421 428 421

460

(billions ft2)

U.S. Total Tissue Consumption 8 201 8,219 8,319 8,400 ('000 s.t.) 412 411 413 421 421 405 374 386 387 380 420 7 896 8,028 8,201 8,053 8,000 8,200 300 340 7,844 7,896 7,800 300 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 7,600 2005 2006 2007 2008 2009 2010 2011

7

Exposure to relatively stable / growing demand Exposure to relatively stable / growing demand

Sources: RISI, Fiber Box Association, Paper Packaging Canada.

MARKET DYNAMICS – SUPPLY

Top 5 producers' share of capacity 85% 86% 100% 85% 66% 86% 76% 77% 60% 80% 100% 20% 40%

C

0%

North American coated boxboard European coated boxboard North American containerboard Canadian containerboard North American tissue

Cascades’s Market Share 3% 17% 3% 26% 7% (estimate) 8

Increased consolidation over the last few years in our market segments Increased consolidation over the last few years in our market segments

Sources: RISI, companies filings.

MARKET DYNAMICS – MARKET BALANCE

Annual Average Capacity Utilization Rates 100% 92% 96% 100% 84% 88% 76% 80% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

U.S. Containerboard Industry U.S. Coated Recycled Boxboard Industry U.S. Tissue Industry

9

Balanced supply/demand equation with utilization rates at approximately 95% Balanced supply/demand equation with utilization rates at approximately 95%

Sources: RISI, CEPI Cartonboard, Paper Packaging Canada , Fiber Box Association.

MARKET DYNAMICS – PRICING

Packaging Tissue

991 1,153

1,200

Packaging Annual Average Selling Prices

1,669

1 600 1,700 Cascades Tissue Papers Index (January 1999 = 1,000) 991 , 710 909

800 1,000

1,400 1,500 1,600 597 560 420 640

400 600 2004 2005 2006 2007 2008 2009 2010 2011

1,148

1 100 1,200 1,300

2004 2005 2006 2007 2008 2009 2010 2011

1,100 2003 2004 2005 2006 2007 2008 2009 2010 2011

10

Upward long Upward long-term pricing trend term pricing trend

Source: RISI.

MARKET DYNAMICS – RAW MATERIAL COSTS

Main Recycled Fiber North Amercian OBM List Prices

290

300 (US$/ton)

Current 150

200 250

135 140 165

100 150

Whit d (SOP)

50 08 r 08 y 08 08 08 08 09 r 09 y 09 09 09 09 10 r 10 y 10 10 10 10 11 r 11 y 11 11 11 11 12 r 12

White grades (SOP) Brown grades (OCC)

Jan Mar May July Sept Nov Jan Mar May July Sept Nov Jan Mar May July Sept Nov Jan Mar May July Sept Nov Jan Mar

11

Market anomaly: SOP trading close to OCC Market anomaly: SOP trading close to OCC  OCC should trade at lower price OCC should trade at lower price

Sources: RISI, Bloomberg.

MARKET DYNAMICS – FX AND OTHER INPUT COSTS

Oil & chemicals Currency Since Since

• Dec. 2011
• Jan. 2010

€

performance against

• Dec. 2011
• Jan. 2010
• Oil

+9% +46%

• Latex

+10% +43% Q1-2012 vs Q4-2011 +2% +5%

• Pigments

+1% +37%

• Plastics

+12% +29%

• Starch

+3% +28% CAN$ strength and input costs sky CAN$ strength and input costs sky-rocketing since 2010 rocketing since 2010

12

STRATEGIC ACTION PLAN – PRIORITY #1

Focused investing for modernization of core operations and IT 1

ATMOS (Voith) ATMOS (Voith) ERP ERP $80M i t t

• $80M investment program
• Blueprint and programming:

2011-2012 Implementation:

• Full machine rebuilt
• Swing machine with “TAD

equivalent” technology $30M i t t

• First to install in North America
• High-end tissue paper offering

Can use up to 100% recycled fiber

• Implementation:

2011-2015

• $30M investment

Ch ll i M k t E l ti Ch ll i M k t E l ti P ti P ti I d fit bilit I d fit bilit

• Can use up to 100% recycled fiber
• Lower energy costs

13 13

Challenging Market Evolution Challenging Market Evolution  Proactive measures Proactive measures  Improved profitability Improved profitability

STRATEGIC ACTION PLAN – PRIORITY #1 (cont’d)

• Financial flexibility not affected
• $99M total investment
• $84M in equity
• Competitive advantage – Recycled liner
• Largest in NA
• $84M in equity
• $15M in bridge loan
• Debt non-recourse to Cascades
• 540,000 short tons capacity
• Most technologically advanced equipment
• Well-aligned with current market trends
• Strong Partnership
• Norampac (Cascades)

59.7% p ( )

• Caisse de dépôt

et placement du Québec 20.2%

• Two industry converters

20.1%

Will i i l d i f d ff i d i i d fi bili Will i i l d i f d ff i d i i d fi bili

14

Will position us amongst leaders in terms of product offering, productivity and profitability Will position us amongst leaders in terms of product offering, productivity and profitability

STRATEGIC ACTION PLAN – PRIORITY #2

Optimizing capital allocation between sectors and investments; reducing working capital 2

W/C Reduction W/C Reduction

Working capital (% of sales)

Papersource Acquisition Papersource Acquisition

• Acquired one of the most modern

converting plants in NA

• Integration level increased to 70% +

R i f iti i i

14.7% 16.3% 16.1% 14 6% 15.0% 14.8% 15.0% 16.0% 18.0% 20.0%

• Reinforces positioning in away-

from-home sector

• 10 converting lines

13.7% 14.6% 10.0% 12.0% 14.0%

Ch ll i M k t E l ti Ch ll i M k t E l ti P ti P ti I fit bilit I fit bilit

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

15 15

Challenging Market Evolution Challenging Market Evolution  Proactive measures Proactive measures  Improve profitability Improve profitability

STRATEGIC ACTION PLAN – PRIORITY #3

Restructuring of under-performing units 3 Periods 2004-2006 2006-2008 2008-2010 2011 P k i P k i P k i P k i Strategic Packaging 5 acquisitions 7 closures 2 sales Packaging 2 mergers 4 closures 4 sales 2 i iti Packaging 2 closures 2 acquisitions Ti Packaging 4 sales 1 investment 4 closures measures Tissue 1 sale 1 closure 1 i iti 2 acquisitions 1 partnership Tissue 1 investment 1 acquisition Tissue 1 acquisition

Ch ll i M k t E l ti Ch ll i M k t E l ti P ti P ti I d fit bilit I d fit bilit

1 acquisition 16 16

Challenging Market Evolution Challenging Market Evolution  Proactive measures Proactive measures  Improved profitability Improved profitability

STRATEGIC ACTION PLAN – PRIORITY #4

Improvement and development of processes and products through innovation 4 ROCE ≥ WACC

Ch ll i M k t E l ti Ch ll i M k t E l ti P ti P ti I fit bilit I fit bilit

MID-TERM OBJECTIVE ROCE ≥ WACC Net debt/EBITDA at 3x 17 17

Challenging Market Evolution Challenging Market Evolution  Proactive measures Proactive measures  Improve profitability Improve profitability

STRATEGIC ACTION PLAN – Q1-2012 INITIATIVES

Focused investing for modernization of Restructuring of Optimizing capital allocation between modernization of core operations (and IT) under-performing units

• Announced consolidation of

between sectors and investments

• $30 million investment

announced in Ontario in our containerboard sector

• Announced consolidation of

Ontario containerboard

• perations with closure of

three plants

• Acquisition of Bird Packaging
• Greenpac on schedule and
• n budget; installation of
• ERP progressing
• Announced closure of

Enviropac-Toronto g ; paper machine started 18

Challenging Market Evolution Challenging Market Evolution  Proactive measures Proactive measures  Improved profitability Improved profitability

FINANCIAL REVIEW – HISTORICAL PERFORMANCE

(M CAN$)

SALES

(M CAN$)

EBITDA

3,862 4,033 4,025 3,877

4,000 4,500 (M CAN$)

SALES

314 340 305 465 310

400 500 (M CAN$)

EBITDA

3,449 3,692 , 3,481 3,182 3,625

3 000 3,500

250 259 262 314 305 310 229

200 300 2,500 3,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 100 2003 2004 2005 2006 2007 2008 2009 2010 2011

IFRS IFRS CANADIAN GAAP CANADIAN GAAP

19

Results impacted by challenging market conditions, lower shipments and higher cost input Results impacted by challenging market conditions, lower shipments and higher cost input

EBITDA excluding specific items but including discontinued operations. Canadian GAAP (not adjusted for IFRS). 2010 and 2011 figures presented under IFRS and exclude discontinued operations of Dopaco.

FINANCIAL REVIEW – SEGMENTED EBITDA

(M CAN$) (% of sales) (M CAN$) (% f ) Boxboard Europe 17 10 10 13 15 20 (M CAN$) 7,0% 12,0% (% of sales) Containerboard 46 33 55 36 27 45 60 (M CAN$) 12,0% 15,0% (% of sales) 2 2 4 5 5 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

• 3,0%

2,0% 19 20 27 19 21 15 30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 3,0% 6,0% 9,0% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 2010 2010 2010 2010 2011 2011 2011 2011 2012 Tissue Papers 28 33 30 40 (M CAN$) 15 0% 20,0% (% of sales) Specialty Products 17 18 16 15 20 (M CAN$) 15 0% 20,0% (% of sales) 19 24 24 23 10 16 18 8 10 20 30 0 0% 5,0% 10,0% 15,0% 12 12 7 13 2 11 5 10 15 5,0% 10,0% 15,0%

Specialized Products & Tissue: Improvement due to lower raw material costs and productivity Specialized Products & Tissue: Improvement due to lower raw material costs and productivity

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 0,0% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 0,0%

20

p p p y p p p y Containerboard: Not producing to expectations Containerboard: Not producing to expectations Europe: Difficult market environment in Q1 Europe: Difficult market environment in Q1-

• 2012

2012

EBITDA excluding specific items.

FINANCIAL REVIEW – KEY INDICATORS (KPIs)

Total Shipments ('000 s.t.) Capacity Utilization Rate 692 695 902 821 775 796 800 900 1000 ( 000 s.t.) 94% 91% 87% 90% 90% 87% 86% 89% 88% 92% 96% 692 695 663 661 500 600 700 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 86% 80% 84% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2010 2010 2011 2011 2011 2011 2012 2010 2010 2010 2011 2011 2011 2011 2012 LTM Return on Assets 11,2% 11,0% 10,6% 10 5% 12,0% Working Capital (% of Sales) 18.0% 9,9% 8,7% 7,4% 7,1% 7,5% 9,0% 10,5% 15.1% 15.1% 13.9% 14.5% 14.4% 14.5% 13.2% 14.2% 12.0% 14.0% 16.0% 6,5% 6,0% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 10.0% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

21

Utilization rate and working capital KPIs did not meet expectations Utilization rate and working capital KPIs did not meet expectations

See notes page 34.

FINANCIAL REVIEW – EQUITY INVESTMENTS

• 35% equity investment
• Market Value: +/- $110M
• 45% equity investment
• Market value: +/- $25M

Reno De Medici’s EBITDA Boralex’s forecast installed production capacity

40 40 50

(euro)

875 818 800 1 000

(MW)

32 30 20 30 40 472 400 600 20 2009 2010 2011 400 2011 2013 2015

22

Investments in strong growth & turnaround stories currently worth +/ Investments in strong growth & turnaround stories currently worth +/- $135M $135M

Boralex’s production capacity pro forma for the Seigneurie de Beaupré project.

FINANCIAL REVIEW – DEBT PROFILE

Long-term Debt Maturities Distribution

Net Debt

(M CAN$)

2017 34% 2020 17% 1 08 1 533 1 524 1,570 1,805 1,658

1,800 2,000 (M CAN$)

Before 2015 10% % 1,508 1,397 1,462 1,533 1,454 1,298 1,445 1,370 1,4851,524 ,

1,200 1,400 1,600

2015 25% 2016 14%

Before 2015 2015 2016 2017 2020

1,000 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

90% of debt maturing after 2015 90% of debt maturing after 2015

23

FINANCIAL REVIEW – LEVERAGE RATIOS

Debt / Debt + Equity Net debt / LTM EBITDA q y

58% 56% 59% 60% 60% 65% 5.8 x 5 6 x 6.0 6.5 7.0 54% 56% 50% 55% 4.2 x 4.2 x 4.9 x 5.6 x 4.5 5.0 5.5 40% 45% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 3.0 3.5 4.0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

24

Slight increase in debt during the execution of our strategic plan Slight increase in debt during the execution of our strategic plan

¹Starting in Q2 2011, LTM EBITDA / Interest includes 100% of Reno De Medici. Starting in Q4 2011, also includes 100% of Papersource. Cascades’ financial covenant ratios: Net funded debt to capitalization of not more than 65%,interest coverage ratio not less than 2.25x. EBITDA excluding specific items. Q2 and Q3 2011 numbers have been slightly restated following the finalization of the purchase price allocation on the Reno De Medici acquisition

• Projects in the works could be approved if business conditions are favourable

FINANCIAL REVIEW – CAPEX PROGRAM

• Projects in the works could be approved if business conditions are favourable

– Potential for $225M to $250M in 2012

• Capex requests for 2012 initially approved at approximately $150M

– Amount subject to change depending on operating results and economic conditions

By project category By segment

– Amount subject to change depending on operating results and economic conditions.

Capital Expenditures Distribution in 2011 ‐ $141M

Health & Safety Others 15% Tissue papers 25% Corporate 6% Boxboard 23% Cost Reduction Energy 4% 7% 25% Cost Reduction, Productivity & Maintenance 74% Containerboard 25% Specialty products 21%

25

Gradual capex program to improve asset base while maintaining financial flexibility Gradual capex program to improve asset base while maintaining financial flexibility

CONCLUDING REMARKS

• Short term
• Prioritize organic growth and productivity improvement
• Proactively address operational issues and realize our strategic plan
• Focused investing for modernization of core operations
• Optimize capital allocation
• Optimize capital allocation
• Restructure under-performing units
• Improve and develop processes and products through innovation

p p p p g

• Medium term
• Reach industry comparable leverage ratios
• Pursue consolidation opportunities

26

Prudent and gradual investments to improve portfolio of assets Prudent and gradual investments to improve portfolio of assets

NEAR TERM OUTLOOK: Cautious optimism

• Higher demand volatility
• Europe uncertainty
• Lower raw material costs
• Consolidation of Papersource
• Impacts of restructuring and

+ I

p y

• Continuous strength of CAN$
• High energy and chemical costs

Impacts of restructuring and

• ptimization measures
• Produce according to historical

standards

+ I

Boxboard Europe Containerboard Specialty products Tissue papers Volume Stable Slight increase Slight increase Slight increase Selling prices Slight increase Stable Stable Stable Raw material costs Slight decrease Slight decrease Slight decrease Slight decrease Raw material costs Slight decrease Slight decrease Slight decrease Slight decrease Exchange rate Stable Stable Energy Costs Slight increase Stable

27

APPENDI X APPENDI X

28 28

ENERGY PRICES

Hedging Program - Natural gas

• Canada:

Energy prices

6 00 7.00

Natural gas (US$)

110

Crude oil (US$)

• 2012: 65% at 5.97 CAN$/GJ
• 2013: 70% at 5.48 CAN$/GJ
• U S :

2.00 3.00 4.00 5.00 6.00 50 70 90

• U.S.:
• 2012: 58% at 6.30 US$/mmBtu
• 2013: 52% at 5.84 US$/mmBtu

0.00 1.00 Apr 09 July 09 Oct 09 Jan 10 Apr 10 July 10 Oct 10 Jan 11 Apr 11 July 11 Oct 11 Jan 12 30 50

2010 2012 Change 2011 Q1 2012 Q1 2012

Natural gas (US$/mmBtu) Crude oil (US$/barrel)

Averages

Year Year Q1 Energy prices Natural gas Henry Hub (US$/mmBtu) 4.39 4.04 2.74

• 33%
• 23%

Q1 2012 Q1 2011 Q1 2012 Q4 2011

29

Source: Bloomberg.

Crude oil WTI (US$/barrel) 77.32 94.01 100.51 11% 12%

FOREIGN EXCHANGE

Hedging Program - Cash flow USD:

• 2012

31 to 52% (with options) of exposure Exchange rates

1.05 1.10 US$/CAN$ 0.95 1.00 EURO/CAN$

US$/CAN$ Euro/CAN$

31 to 52% (with options) of exposure hedged at an average rate of 1.032CAN$/US$ to 1.067CAN$/US$

• 2013

0.90 0.95 1.00 0.75 0.80 0.85 0.90

23 to 39% (with options) of exposure hedged at an average rate of 1.037CAN$/US$ to 1.079CAN$/US$

0.80 0.85 0.90 r 09 y 09 t 09 n 10 r 10 y 10 t 10 n 11 r 11 y 11 t 11 n 12 0.60 0.65 0.70 2010 2012 Change 2011 Q1 2012 Q1 2012 Apr July Oct Jan Apr July Oct Jan Apr July Oct Jan

Averages

Year Year Q1 Foreign exchange rates US$/CAN$ 0.971 1.011 0.999

• 2%

2% EURO/CAN$ 0 733 0 727 0 762 3% 5% Q1 2012 Q1 2011 Q1 2012 Q4 2011

30

Source: Bloomberg.

EURO/CAN$ 0.733 0.727 0.762 3% 5%

NORTH AMERICAN MANUFACTURING SPREAD

1,234 1,2671,271

1 200 1,300 750 850

1,166 1 070 1,106

1 100 1,200 550 650

1,070 428 452 512 410 387

1 000 1,100 350 450

206 324

900 1,000 150 250 900

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

150

31

Manufacturing spread in CAN$ in Q1/12: +1% vs Q4/11 and +17% vs Q1/11 Manufacturing spread in CAN$ in Q1/12: +1% vs Q4/11 and +17% vs Q1/11

See notes page 34. Source: Bloomberg.

MARKET PRICES AND COSTS SUMMARY

2010 2011 2012 Average Average Average Average Average Average Average Q1 2012 Q1 2012 Q1 Q2 Q3 Q4 Q1 Q1 2011 Q4 2011 (unit) (%) (unit) (%) Selling prices Change Change These indexes should only be used as indicator of trends and they be different than our actual selling prices or purchasing costs. Cascades North American US$ index (index 2005 = 1,000)1 1,186 1,238 1,250 1,267 1,272 1,256 1,271 34 3% 0% PACKAGING Boxboard North America (US$/ton) Recycled boxboard - 20pt. Clay coated news (transaction) 828 880 917 920 920 909 920 40 5% 0% Europe (Euro/tonne) Recycled white-lined chipboard (GD2) index2 639 690 716 716 718 710 698 8 1%

• 20
• 3%

Virgin coated duplex boxboard (GC2) index3 1,055 1,155 1,151 1,152 1,155 1,153 1,141

• 14
• 1%
• 14
• 1%

Containerboard (US$/ton) Linerboard 42-lb. unbleached kraft, East US (transaction) 625 640 640 640 640 640 640 0% 0% Corrugating medium 26-lb. Semichemical, East U.S. (transaction) 595 610 610 610 610 610 610 0% 0% Specialty products (US$/ton, tonne for deinked pulp) Recycled boxboard - 20pt. Bending chip (transaction) 619 667 675 670 670 670 670 3 1% 0% Deinked pulp (f.o.b; U.S. air-dried & wet-lap, post-consumer) 743 748 768 812 725 763 663

• 85
• 11%
• 62
• 9%

Unbleached kraft paper, Grocery bag 30-lb. 1,022 1,025 1,093 1,110 1,150 1,095 1,110 85 8%

• 40
• 3%

Uncoated white 50-lb. offset, rolls 914 930 955 947 930 940 923

• 7
• 1%
• 7
• 1%

TISSUE PAPERS Cascades Tissue papers (index 1999 = 1,000)4 1,619 1,631 1,662 1,718 1,664 1,669 1,612

• 19
• 1%
• 52
• 3%

Raw materials Cascades North American US$ index (index 2005 = 300)5 421 471 494 512 410 472 387

• 83
• 18%
• 23
• 6%

RECYCLED PAPER North America (US$/ton) Corrugated containers, no. 11 (New England) 149 182 178 179 155 174 152

• 30
• 17%
• 4
• 2%

Special news, no. 8 (ONP - Chicago & NY average) 88 128 139 135 103 126 85

• 43
• 34%
• 18
• 18%

Sorted office papers, no. 37 (SOP - Chicago & NY average) 214 223 263 283 164 233 145

• 78
• 35%
• 18
• 11%

Europe (Euro/tonne) Recovered paper index6 120 146 158 147 107 140 113

• 33
• 23%

6 6% VIRGIN PULP (US$/tonne) Bl h d ft d k ft N th E t U S 960 970 1 027 993 920 978 873 97 10% 47 5%

32

Sources: RISI, Dow Jones, Random Lengths and Cascades. See notes p. 34.

Bleached softwood kraft Northern, East U.S. 960 970 1,027 993 920 978 873

• 97
• 10%
• 47
• 5%

Bleached hardwood kraft Northern mixed, East U.S. 856 820 850 823 738 808 714

• 106
• 13%
• 24
• 3%

WOODCHIPS – Conifer eastern Canada (US$/odmt) 123 123 125 125 134 127 130 7 6% 4

• 3%

SENSITIVITY TABLE 2011

CAPACITY / CONSUMPTION

(‘000 s.t. and ‘000 mmBtu

CHANGE EBITDA IMPACT

(In million of CAN$) for natural gas)

SELLING PRICES (MANUFACTURING) Boxboard Containerboard 1,425 920 25 US$ or € / ton 25 US$ / ton 45 23 Specialty Products (paper only) Tissue 375 525 25 US$ / ton 25 US$ / ton 9 13 RAW MATERIAL COSTS Recycled papers Recycled papers Brown grades (OCC & others) Groundwood grades (ONP & others) White grades (SOP & others) Commercial pulp 1,740 305 870 275 15 US$ or € / ton 15 US$ or € / ton 15 US$ or € / ton 30 US$ or € / ton (29) (5) (14) (9) Commercial pulp Natural gas 275 11,740 30 US$ or € / ton 1.00 US$ or € / mmBtu (9) (13) FOREIGN EXCHANGE Change of US$ 0.01 vs CAN$ (7)

33

Sensitivity table adjusted for all recent initiatives (transactions, closures).

NOTES

1. The Cascades Noth American selling prices index represents an approximation of the Company's manufacturing selling prices in North America (excluding converting). It is weighted according to shipments and is based on the average selling price of our North American manufacturing

• perations of boxboard, containerboard, speciality products and tissue paper. It considers the change in the mix of products sold. This index

should only be used as a trend indicator. 2. The Cascades recycled white-lined chipboard selling prices index represents an approximation of Cascades’ recycled grades selling prices in Europe It is weighted by country

• Europe. It is weighted by country.

3. The Cascades virgin coated duplex boxboard selling prices index represents an approximation of Cascades’ virgin grades selling prices in

• Europe. It is weighted by country.

4. The Cascades Tissue paper selling prices index represents a mix of primary and converted products, and is based on the product mix at the end

• f 2006.

5. The Cascades North American raw materials index is based on publication prices and the average weighted cost paid for some of our man fact ring ra materials namel rec cled fibre irgin p lp and oodchips in North America It is eighted according to p rchase ol me manufacturing raw materials, namely recycled fibre, virgin pulp and woodchips, in North America. It is weighted according to purchase volume. This index should only be used as a trend indicator, as it may differ from our actual manufacturing purchasing costs and our purchase mix. 6. The Cascades recovered paper index represents an approximation of Cascades’ recovered paper purchase prices in Europe. It is weighted by country based on the recycled fibre supply mix of 2009. The capacity utilization rate is defined as: Shipments/Practical capacity. Paper manufacturing only. Return on assets is a non-GAAP measure and is defined as: LTM EBITDA excluding specific items/ LTM Average of total quarterly assets. It includes discontinued operations. Working capital includes accounts receivable plus inventories less accounts payable. It excludes an unpaid provision for closure and restructuring t It l l d th t ti f d i ti fi i l i t t d th t ti f f t t li bilit

• costs. It also excludes the current portion of derivatives financial instruments and the current portion of future taxes liability.

34

For more information: For more information: www.cascades.com/investors www.cascades.com/investors Riko Gaudreault Riko Gaudreault Di t I t R l ti Di t I t R l ti Director, Investor Relations Director, Investor Relations riko_gaudreault@cascades.com riko_gaudreault@cascades.com 514 514-

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