Cascades (CAS) Q2 2025 earnings summary

Executive summary

• Q2 2025 sales reached $1,187 million, up 3% sequentially and 1% year-over-year, driven by higher selling prices and favorable FX, despite lower volumes and ongoing demand caution.

• Adjusted EBITDA (A) was $137 million, up 10% from Q1 and 22% year-over-year, with margin improving to 11.5%.

• Adjusted net earnings were $19 million ($0.19/share), while reported net loss was ($3) million ($0.03/share) due to impairment and derivative losses.

• Operational focus remains on production efficiency, commercial strategies, and cost reduction, targeting a $100 million annual run-rate profitability improvement by end of 2026.

• Packaging segment led performance, while tissue benefited from higher sequential volumes but faced higher operating costs.

Financial highlights

• Sales increased $7 million year-over-year, with $51 million benefit from higher prices and $8 million from FX, offset by $46 million lower volumes.

• Adjusted EBITDA (A) margin improved to 11.5% from 9.5% in Q2 2024 and 10.8% in Q1 2025.

• Adjusted cash flow from operations was $122 million, up from $90 million in Q1 2025 and $95 million last year.

• Net debt decreased by $112 million in Q2 to $2,104 million, with leverage ratio improving to 3.8x from 4.2x.

• Adjusted net earnings per share were $0.19, up from $0.08 last year and $0.13 in Q1.

Outlook and guidance

• Q3 2025 consolidated EBITDA (A) expected to increase 3%–9% over Q2, with stable packaging and stronger tissue performance.

• Full-year 2025 capital expenditures forecast reduced to $150 million, with free cash flow prioritized for debt reduction.

• Favorable/stable raw material costs and selling prices anticipated, but macroeconomic and trade uncertainty may impact demand.