Reno De Medici - Cascades

CASCADES
Scotia Capital High Yield
Conference
November 30, 2011

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
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 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 Canadian GAAP or IFRS (“non-GAAP or 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 reconciled to the most directly comparable financial measures, as set forth in the “Supplemental
Information on Non-GAAP or Non-IFRS Measures” section of our most recent annual report or earnings press
release.
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 on derivative
financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses on long-term
debt and other significant items of an unusual or non-recurring nature.
All amounts in this presentation are in Canadian dollars unless otherwise indicated.
2

GREEN PACKAGING AND TISSUE PRODUCT
OFFERING
Boxboard Containerboard Specialty products Tissue papers
Exposure to less cyclical / stable / growing end-markets through “green” products
3

UPSTREAM AND DOWNSTREAM INTEGRATION
May be sent to
recycling centers
100+ business units
23 units
57 units
Closed-loop business model that offers a variety of green products
Including the 6 manufacturing/converting tissue papers units and Reno De Medici’s units.
31 units
•75% recycled fibre (3.2M tons)
•North American integration rate
(2010): 35% (700K tons)
•North American integration
rate (2010): 47%
4

($ in millions)
BALANCED PACKAGING AND TISSUE EXPOSURE
Boxboard
30% of Sales
23% EBITDA
Packaging
78% of Sales
76% EBITDA
Cascades
LTM Q3 2011 Sales: $3,739
LTM Q3 2011 EBITDA: $281
Containerboard
26% of Sales
37% EBITDA
Tissue Papers
22% of Sales
24% EBITDA
Specialty Products
22% of Sales
16% EBITDA
Leading North American packaging and tissue manufacturer with substantial recycling
capabilities
EBITDA excluding specific items, including discontinued operations. Breakdown of sales and EBITDA before eliminations & corporate activities.
5

• 35% equity investment
• Market Value: +/- $90M
Boralex‟s forecast installed production capacity
(MW)
1 000
800
600
400
EQUITY INVESTMENTS
500
710
• 43% equity investment
• Market value: +/- $40M
Reno De Medici‟s EBITDA
Strong growth & turnaround stories currently worth +/- $130M
Boralex`s production capacity proforma for the Seigneurie de Beaupré project.
905
2010 2012 2014
(euro)
50
40
30
20
31
40
37
2009 2010 LTM Q3 2011
6

(M CAN$)
1100
1000
900
800
700
600
500
759
YTD 2011 FINANCIAL PERFORMANCE
808
832
SALES
783 774
Improving results following a challenging first half of the year
Full consolidation of Reno De Medici since Q2 2011. Sales excluding discontinued operations. EBITDA excluding specific items.
991
947
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
(M CAN$)
100
80
60
40
20
0
59
85
94
EBITDA
72
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
37
62
79
7

8%
6%
4%
2%
0%
-2%
-4%
-6%
RELATIVELY STABLE DEMAND & BALANCED
MARKETS
Year-to-date 2011 demand change
Jan 11 Feb 11 Mar 11 Apr 11 May 11 June 11 July 11 Aug 11 Sept 11
European coated boxboard industry shipments
Canadian corrugated box industry shipments
U.S. coated recycled boxboard industry production
U.S. industry converted tissue product shipments
Sources: RISI, CEPI Cartonboard, Paper Packaging Canada.
100%
Year-to-date 2011 industry operating rates
Cascades‟ demand has been relatively healthy so far in 2011
98%
96%
94%
92%
90%
Jan 11 Feb 11 Mar 11 Apr 11 May 11 June
11
U.S. containerboard industry
U.S. coated recycled boxboard industry
U.S. tissue industry
July 11 Aug 11 Sept
11
8

120
110
100
90
80
70
104
100
Source: Bloomberg.
YTD 2011 INPUT COST INFLATION
North American selling price/raw material cost spread
(manufacturing)
117
114
(17)%
99
97
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Spread in US$/s.t. Spread in Can$/s.t.
(US$/
bushel)
8
Main drivers for Cascades' chemical input costs
+90%
YTD 2011 financial results impacted by signification variable cost inflation
7
6
5
4
3
Jan
10
Mar
10
May
10
3.41
July Sept Nov Jan Mar May July
10 10 10 11 11 11 11
Corn (left axis) Oil (right axis)
Sept
11
(US$/
barrel)
120
6.47
93
9
110
100
90
80
70
60

(M CAN$)
1,600
1,500
1,400
1,300
1,200
YTD 2011 DEBT REDUCTION
1,454
1,508
1,462
NET DEBT
1,397
1,445
1,288
Net debt down 10% since Q2 2010 through the sale of Dopaco
1,360
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Including net debt of Reno De Medici since Q2 2011 ($148M as of September 30, 2011).
10

Q1 Q2 Q3
Sale of
Avot-Vallée mill
YTD 2011 STRATEGIC HIGHLIGHTS
Sale of Dopaco
($400M)
Increased
ownership in
Reno de Medici
Consolidation of
N. England
operations
(closure of
Leominster plant)
Sale of
Versailles &
Hebron facilities;
•Construction kick-off of the new, state-of-art, Greenpac containerboard mill.
•Acquisition of the remaining 50% of Papersource shares, a leading tissue paper converter
(effective November 2011).
Greenpac
announcement
•Closure of Burnaby (BC) containerboard and divestiture of land and building mill for $20 million
(effective October 2011).
•Closure of Le Gardeur (QC) sheet plant (will be effective in Q4 2011).
Challenging Market Evolution = Proactive measures = Improve profitability
11

1,740
1,720
1,700
1,680
1,660
1,640
1,620
1,600
Source: RISI.
STABLE/UPWARD PRICING MOMENTUM
Cascades tissue papers price index (1999=1,000)
1,617
1,718
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Packaging average market selling prices
Pricing environment remains favorable and should positively impact Q4 2011 results
950
850
750
650
550
790
976
580
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Recycled boxboard - 20pt. Clay coated news (transaction)
Recycled white-lined chipboard (GD2) index
Linerboard 42-lb. unbleached kraft, East US (transaction)
Virgin coated duplex boxboard (GC2) index
1,200
920
1,152
716
1,000
640
1,100
,900 900
12

(US$/s.t. or
€/m.t. )
300
250
200
150
100
50
0
Sources: RISI, Bloomberg.
RAW MATERIAL COSTS AND CURRENCY COMING
DOWN
MAIN RECYCLED FIBRE COSTS
SOP (U.S.) OCC (U.S.)
EBITDA sensitivity
to 15$U.S. or €/s.t.
change in recycled fibre costs = 52 M$
296
168
Jan 07
Apr 07
July 07
Oct 07
Jan 08
Apr 08
July 08
Oct 08
Jan 09
Apr 09
July 09
Oct 09
Jan 10
Apr 10
July 10
Oct 10
Jan 11
Apr 11
July 11
Oct 11
150
121
1.10
1.05
1.00
0.95
0.90
0.85
0.80
0.75
Headwinds are subsiding.
US$/CAN$
EBITDA sensitivity
to 10 CAN¢ change = 50 M$+
1.05
Current value
0.95
Jan 07
Apr 07
July 07
Oct 07
Jan 08
Apr 08
July 08
Oct 08
Jan 09
Apr 09
July 09
Oct 09
Jan 10
Apr 10
July 10
Oct 10
Jan 11
Apr 11
July 11
Oct 11
13

STRATEGIC PRIORITIES CASCADES
Restructuring of
under-performing units
EBITDA excluding specific items.
1
Focused investing for
modernization
of core operations (and IT)
2
ROCE: objective = WACC
Net debt/EBITDA: objective = 3x
Optimizing capital allocation
between sectors & investments,
reducing working capital
Cascades‟ 3 pillar strategy: Restructuration, Modernization, Optimization.
3
SHORT/MID-TERM
MID-TERM
14

• Strong Partnership
– Norampac (Cascades) 59.7%
– Caisse de dépôt et placement
du Québec 20.2%
– Two industry converters 20.1%
• Financial flexibility not affected
– $99M total investment ($84M in equity,
$15M in bridge loan)
– Only $50M increase in total debt 1
– Debt non-recourse to Cascades
• Competitive advantage – Recycled liner
– Largest in N. America (540,000 s.t.
capacity)
– Most technologically advanced equipment
– Well-aligned with current market trends
Through Greenpac, Norampac positions itself amongst sector leaders in terms of product offering,
productivity and profitability; Cascades maintains its financial flexibility.
1 Compared to June 30, 2011.
TOWARDS MODERNIZATION : GREENPAC
15

TOWARDS MODERNIZATION : ATMOS &
PAPERSOURCE
• “TAD equivalent technology”
• Full machine rebuilt
• $30M investment
– First North American machine
• High-end tissue paper offering
• Up to 100% recycled fibre tissue paper
• Lower energy costs
ATMOS (Voith) PAPERSOURCE
• Aquisition of the remaining 50% shares for $60M
(+28M in debt to be assumed)
• Increased tissue group integration level to 70%
• Reinforces positionning in the away-from-home sector
• One of the most modern converting plants in North
America
• 10 converting lines
Improved product offering and optimized operations
16

• 2010
• 2011
ERP IMPLEMENTATION & W/C REDUCTION
ERP W/C Reduction
– Detailed analysis of its requirement
– Pilot project launch
– $10M investment
– Detailed blueprint manufacturing operations
– Implementation in one of our tissue mills
– $20M investment
• 2012-2014
– Detailed blueprint converting
– Full implementation
– $20M investment
18.0%
16.0%
14.0%
12.0%
10.0%
16.5%
Working capital (% of sales)
14.2%
13.6%
15.0%
2 key strategic initiatives to improve efficiency, flexibility and competiveness
12.0%
2008 2009 2010 Q3 2011 T+2
17

(M $)
140
130
120
110
100
90
80
70
60
50
40
Q1 2007
86
Q2 2007
87
CONCLUSION
95
82
59
EBITDA excluding specific items. CAN GAAP.
Q3 2007
Q4 2007
Q1 2008
EBITDA
Q2 2008
63
Q3 2008
88
Q4 2008
96
Q1 2009
107
Q2 2009
121
Q3 2009
127
Q4 2009
110
Cascades will:
1. Improve financial flexibility through:
• Proactive measures on under-performing
assets;
• Improved working capital management.
2. Invest diligently in core businesses to
optimize and modernize.
Strong performance during the recent economic downturn
and clear, committed and unified strategy.
18

APPENDICES
19

MARKET PRICES AND COSTS SUMMARY
Q32011
Q32011
2009 2010 2011 Q32010
Q22011
These indices should only be used as indicators of trends and they Average Average Average Average Average Average Average Average Average Average
might be different than our actual selling prices or purchasing
Q1 Q2 Q3 Q4
Q1 Q2 Q3
costs.
Selling prices
(unit) (%) (unit) (%)
Cascades North American US$ index (index 2005 = 1,000)
PACKAGING
Boxboard
North America (US$/ton)
1,109 1,106 1,180 1,223 1,234 1,186 1,238 1,250 1,264 1,251 41 3% 14 1%
Recycled boxboard - 20pt. Clay coated news (transaction)
Europe (Euro/tonne)
754 790 825 843 855 828 880 917 920 906 77 9% 3 0%
Recycled white-lined chipboard (GD2) index 592 580 631 656 690 639 690 716 716 707 60 9% 0 0%
Virgin coated duplex boxboard (GC2) index
Containerboard (US$/ton)
985 976 1,025 1,063 1,155 1,055 1,155 1,151 1,152 1,153 89 8% 1 0%
Linerboard 42-lb. unbleached kraft, East US (transaction) 547 580 640 640 640 625 640 640 640 640 0 0% 0 0%
Corrugating medium 26-lb. Semichemical, East U.S. (transaction)
Specialty products
(US$/ton, tonne for deinked pulp)
517 550 610 610 610 595 610 610 610 610 0 0% 0 0%
Recycled boxboard - 20pt. Bending chip (transaction) 565 575 625 625 650 619 667 675 670 671 45 7% -5 -1%
Deinked pulp (f.o.b; U.S. air-dried & wet-lap, post-consumer) 601 708 752 755 755 743 748 768 812 776 57 8% 44 6%
Unbleached kraft paper, Grocery bag 30-lb. 926 960 1,020 1,047 1,060 1,022 1,025 1,093 1,110 1,076 63 6% 17 2%
Uncoated white 50-lb. offset, rolls
TISSUE PAPERS
855 868 917 938 933 914 930 955 947 944 9 1% -8 -1%
Cascades Tissue papers (index 1999 = 1,000)
Raw materials
1,617 1,617 1,623 1,615 1,620 1,619 1,631 1,662 1,718 1,685 103 6% 56 3%
Cascades North American US$ index (index 2005 = 300)
RECYCLED PAPER
North America (US$/ton)
258 426 409 397 452 421 470 492 512 491 115 29% 20 4%
Corrugated containers, no. 11 (New England) 68 149 146 131 170 149 182 178 179 180 48 37% 1 1%
Special news, no. 8 (ONP - Chicago & NY average) 56 90 92 78 95 88 128 139 135 134 57 73% -4 -3%
Sorted office papers, no. 37 (SOP - Chicago & NY average)
Europe (Euro/tonne)
120 225 198 218 216 214 223 263 283 256 65 30% 20 8%
Recovered paper index
VIRGIN PULP (US$/tonne)
53 100 120 126 132 120 146 158 147 151 21 17% -11 -7%
Bleached softwood kraft Northern, East U.S. 718 880 993 1 000 967 960 970 1 027 993 997 -7 -1% -34 -3%
Bleached hardwood kraft Northern mixed, East U.S. 609 776 908 900 840 856 820 850 823 831 -77 -9% -27 -3%
WOODCHIPS – Conifer eastern Canada (US$/odmt) 121 125 121 120 124 123 123 125 125 124 5 4% 0 0%
Sources: RISI, Dow Jones, Random Lengths and Cascades.
Change
20

SENSITIVITY TABLE
SELLING PRICES (MANUFACTURING)
Boxboard
Containerboard
Specialty Products (paper only)
Tissue
RAW MATERIAL COSTS
Recycled papers
Brown grades (OCC & others)
Groundwood grades (ONP & others)
White grades (SOP & others)
Commercial pulp
Natural gas
FOREIGN EXCHANGE
Change of US$ 0.01 vs CAN$
CAPACITY / CONSUMPTION
(„000 s.t. and „000 mmBtu
for natural gas)
1,393
1,026
475
511
1,895
359
908
272
13,303
Sensitivity table adjusted for all recent initiatives (transactions, closure) with the exception of the Burnaby mill and Le Gardeur plant.
CHANGE EBITDA IMPACT
25 US$ or € / ton
25 US$ / ton
25 US$ / ton
25 US$ / ton
15 US$ or € / ton
15 US$ or € / ton
15 US$ or € / ton
30 US$ or € / ton
1.00 US$ or € / mmBtu
(In million of CAN$)
44
26
12
13
(32)
(6)
(14)
(9)
(15)
(5)
21

Boxboard N.
America
Boxboard
Europe
Specialty
products
Tissue papers
POTENTIAL MARKET CHANGE SENSITIVITY
Segment Announced eff.
date
Announced Increase
Recycled board April/May 40 US$/s.t.
Recycled board April 30 €/m.t.
Consumer prod.
pack.
March-June 4 to 8%
Kraft papers April/Sept 50 US$/s.t.
Deinked pulp May/June 5%
Uncoated b. June 30 US$/s.t.
Parent rolls March/April 50 US$/s.t.
AfH Canada May Up to 6%
AfH U.S. June Up to 9%
Retail Canada July/August 6.5%
Retail U.S. August Up to 7.5%
Total potential EBITDA
annual change = approx. 70 M$
22

RENEWAL OF CREDIT AGREEMENT
Structure $750 M revolving credit facility
Before After (February 2011)
$100 M term loan
Maturity Credit facility: December 2011
Term loan: February 2012
Interest rate Credit facility: LIBOR + 275 bps
Term loan: LIBOR + 287.5 bps
$750 M revolving credit facility
February 2015
LIBOR + 212.5 bps
Standby fees 70 bps 22.5% x (spread over LIBOR) = 48 bps
Covenants Funded Debt to Capitalization Ratio ≤ 65%
Interest Coverage Ratio ≥ 2.25x
Funded Debt to Capitalization Ratio ≤ 65%
Interest Coverage Ratio ≥ 2.25x
Addressing upcoming maturities while reducing costs of borrowing and improving flexibility.
23

DEBT SCHEDULE
(M CAN$)
600
500
400
300
200
100
0
Long-term debt repayment schedule (Sept. 30, 2011)
Senior unsecured
notes (US$ 18M)
6.75% / 7.25%
7.75%
L + 212.5 bps
Revolver
(CAN$ 750M)
7.75%
Senior unsecured
notes (CAN$ 200M)
Senior unsecured
notes (US$ 500M)
Senior unsecured notes
(US$ 250M)
With refinancing of revolver, all short term maturities are now addressed.
7.875%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
24

HEDGING PORTFOLIO Q4 2011-2012
1. Cash flow USD:
• Q4 2011: 31 to 36% (with options) of exposure hedged at an average rate of 1.124
CAN$/US$ to 1.135 CAN$/US$
• 2012: 29 to 44% (with options) of exposure hedged at an average rate of 1.032
CAN$/US$ to 1.070 CAN$/US$
2. Natural gas:
• Canada:
• Q4 2011: 70% at 6.13 CAN$/GJ
• 2012: 65% at 6.05 CAN$/GJ
• U.S.:
• Q4 2011: 63% at 6.47 US$/mmBtu
• 2012: 57% at 6.44 US$/mmBtu
25

RENO DE MEDICI: FULL CONSOLIDATION SINCE Q2
Reno De Medici (RdM)
1. Cascades owned 42.2% of outstanding shares at the end of Q3 2011
2. Cascades can acquire up to 5% per year on the open market
3. Cascades has the option to acquire 9.07% from one shareholder « Industria Innovatione»
• Cascades has a call option to buy for €0.43 per share until Dec. 31, 2012
• Industria has a put option to sell for €0.41 per share from Jan 2013 to March 31, 2014
• Total potential investment of €14-15 M
4. Put / Call option for Cascades virgin assets in effect
• 2011 is reference year
• Paid in cash or in additional shares of RdM
• May represent 10%-20% of outstanding shares of RdM (depending on acquisition structure)
Due to the option in place (9.07%) and the size of its ownership, Cascades began to fully
consolidate RdM‟s results in its financial statements in Q2 2011
26

NORTH AMERICAN COATED BOXBOARD
North American capacity share CRB
W. Pigeon;
Strathcona; 3%
4%
Fusion
Paperboard;
6%
Cascades;
10%
PaperWorks;
13%
Source: CEPI Cartonboard, company filings, Cascades.
Caraustar;
2% Newark;
2%
Graphic
Packaging;
35%
Rock-Tenn;
25%
North American capacity share coated boxboard
Cascades;
3%
PaperWorks
; 4%
Clearwater;
6%
RockTenn;
10%
G-P; 3%
IP; 15%
Others; 6%
Graphic
Packaging;
30%
Meadwest;
23%
27

Mayr-Melnhof;
30%
EUROPEAN COATED BOXBOARD
European capacity WLC Share
Reno De
Medici; 21%
Smurfit Kappa;
6%
Source: CEPI Cartonboard, company filings, Cascades.
Others; 33%
Knauf; 5%
Weig; 5%
Others; 31%
Holmen; 4%
Cascades; 9%
Holmen; 10%
European capacity FBB+WLC share
Smurfit Kappa;
3%
M-real; 11%
Stora Enso;
12%
European capacity FBB share
Others; 9%
IP; 8%
Mayr-Melnhof;
23%
Reno de
Medici
Cascades;
17%
Mayr-Melnhof;
10%
M-real; 30%
Stora Enso;
24%
28

Pratt; 3%
NORTH AMERICAN CONTAINERBOARD
North American capacity share containerboard
Longview; 2%
Boise; 2%
KapStone
(with US
Corr.); 3%
Norampac;
3%
PCA; 6%
Green Bay
Pack.; 2% Others; 12%
GP; 11%
IP (with TIN);
36%
Rock Tenn
(with SSCC);
20%
Canadian capacity breakdown containerboard
Minas Basin
Pulp & Power;
5%
Kruger; 9%
Lake Utopia
Paper; 10%
Atlantic; 11%
New Forest
Paper Mills ;
13%
Norampac;
26%
Smurfit/
RockTenn; 26%
29

TISSUE AWAY-FROM-HOME
Papersource;
4%
SCA; 7%
Wausau; 7%
GP; 6%
Other; 2%
Kruger; 29%
Source: Company filings, Cascades.
Canada
Cascades;
18%
Other; 16,9%
KC; 27%
Cascades;
Papersource; 4,4%
2,7%
Best diamond;
0,5%
Kruger; 2,7%
GP; 27,8%
North America
Wausau; 6,5%
Papersource;
3%
Cascades; 3%
Best diamond;
1%
Other; 18%
GP; 30%
SCA; 17,9%
KC; 20,6%
USA
Wausau; 6%
SCA; 19%
KC; 20%
30

TISSUE RETAIL
Cascades; 5%
Private Label;
28%
Source: AC Nielsen.
P&G; 11%
KC; 4%
Canada = 1.1b$
Irving; 18%
Kruger; 34%
Other; 11%
Private Label;
25%
North America = 12b$
P&G; 24%
Private Label;
24%
Other; 5%
P&G; 26%
GP; 22%
KC; 18%
USA = 11b$
GP; 25%
KC; 20%
31

32
For more information:
www.cascades.com/investors
Didier Filion
Director, Investor Relations
didier_filion@cascades.com
514-282-2697
CREDIT: IMAGE ECOterre
32