Cascades (CAS) investor relations material

Strategic priorities and operational highlights

• Targeting $100M in annual profitability improvements by end of 2026, with $30M achieved in 2025 through operational and commercial optimization, asset sales, and cost controls.

• Bear Island mill operated at 92% capacity in early 2026; Pryor, OK tissue facility increased production by 17% over Q3 2025.

• $149M in asset sale proceeds realized by Q1 2026, aiming for $230M by Q3 2026; net debt stable at $1.9B and leverage at 3.3x.

• Divested Richmond, BC plant and exited honeycomb/partition packaging to streamline operations.

Financial performance and results

• Q1 2026 sales were $1,125M, with EBITDA(A) of $118M (10.5% margin) and net earnings of $39M; adjusted net earnings per share at $0.07.

• Last twelve months (LTM) sales reached $4,747M, EBITDA(A) $569M (12.0% margin), and net earnings $102M.

• Free cash flow for LTM Q1 2026 was $340M, with a free cash flow margin of 7.2%.

• Net debt/EBITDA(A) improved to 3.3x from 4.2x a year earlier; interest coverage ratio at 4.5x.

Segment performance and market trends

• Packaging: Bear Island and Greenpac productivity improved; price increases announced; operational footprint optimized.

• Tissue: Wagram, NC mill at pre-outage levels; Pryor, OK facility production up; higher logistics costs and seasonal demand softness.

• Recycled fibre and virgin pulp costs showed moderate increases; OCC and SOP prices rose due to seasonal supply constraints.

• Packaging EBITDA(A) margin at 16.7% LTM Q1 2026; tissue EBITDA(A) margin at 2% for 2025, with improvement expected.