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Cascades Reports Results for the Second Quarter of 2026
Cascades Reports Results for the Second Quarter of 2026
KINGSEY FALLS, QC, Aug. 6, 2026 — Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended June 30, 2026.
Q2 2026 Highlights
- Sales of $1,219 million (compared with $1,125 million in Q1 2026 and $1,187 million in Q2 2025);
- Operating income of $58 million (compared with $81 million in Q1 2026 and $36 million in Q2 2025);
- Net earnings per common share of $0.21 (compared with net earnings per common share of $0.38 in Q1 2026 and a net loss per common share of ($0.03) in Q2 2025);
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A))1 of $140 million (compared with $118 million in Q1 2026 and $137 million in Q2 2025);
- Adjusted net earnings per common share1 of $0.24 (compared with $0.07 in Q1 2026 and $0.19 in Q2 2025);
- Net debt1 of $1,879 million as of June 30, 2026 (compared with $1,901 million as of March 31, 2026). Net debt to EBITDA (A) ratio1 remained stable at 3.3x;
- Total capital expenditures of $40 million in Q2 2026, compared to $28 million in Q1 2026 and $44 million in Q2 2025. The Corporation's 2026 forecasted capital expenditures before disposals will be in a range of $150 million to $175 million.
- The Company generated $5 million in asset sale proceeds during the second quarter, bringing total proceeds to $154 million for the 2025 - 2026 period. The Company's objective of generating $230 million is progressing well and is now expected to be achieved in early 2027.
Hugues Simon, President and CEO, commented: "Our second quarter results exceeded expectations, driven by a stronger performance in Packaging, reflecting continued solid production and demand levels across our paper mill network, meaningful progress in onboarding new customers and a more favourable economic environment than initially anticipated. Packaging volumes tracked ahead of our forecasted assumptions, contributing to stronger profitability in the quarter. In Tissue, the results came in slightly ahead of our expected range. Performance benefited from improved productivity and sales volumes and the positive impact of ongoing cost reduction initiatives. The operational improvements achieved over the past several quarters are translating into greater efficiency and a stronger cost structure across the business. Overall, our leverage ratio remained stable during the quarter, while net debt decreased modestly despite unfavourable exchange rate movements."
Discussing near-term outlook, Mr. Simon commented, "On July 20, 2026, the U.S. administration announced new tariffs on a number of products imported into the United States and we are conducting an assessment of the potential impact on our operations. Based on information currently available, certain tissue and packaging products exported to the United States could be subject to the announced 50% tariffs.
While this represents a notable development, we believe the potential impact is manageable. We are actively pursuing several tactical initiatives that we expect will materially mitigate the potential financial impact of these tariffs over the coming months. In addition to the direct effects of this announcement, some customers whose products are subject to these tariffs may experience weaker demand or reduce production levels, which could negatively affect volumes in certain segments. Based on our current assessment and the mitigation actions underway, we remain confident in our ability to successfully manage these challenges.
Looking ahead, this situation does not change our confidence in the earnings trajectory of the business. Supported by our ongoing profitability improvement initiatives and the momentum we continue to see across our operations, and excluding the potential impact of the announced tariffs, we now expect annual run-rate Adjusted EBITDA to exceed $600 million during the second half of 2026, surpassing our original objective. The implementation of previously announced selling price increases in both Packaging and Tissue is progressing as planned. In Packaging, the recent $50 per ton price increase, announced in June, is expected to further strengthen earnings momentum in the coming quarters.
1 Some information represents non-IFRS Accounting Standards Financial measures, other financial measures or non-IFRS Accounting Standards ratios which are not standardized under IFRS Accounting Standards and therefore might not be comparable to similar financial measures disclosed by other corporations. Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
This confidence reflects the significant work completed over the past several quarters to make Cascades a more resilient and agile organization. Through operational excellence initiatives, cost optimization efforts and disciplined capital allocation, we have strengthened our ability to respond effectively to changing market conditions and navigate a period of heightened geopolitical uncertainty. We are also closely monitoring developments in the Middle East. Continued instability has increased volatility in energy markets, and sustained increases in oil prices could create additional inflationary pressures on transportation, manufacturing and other operating costs. We will continue to leverage the flexibility of our business model and disciplined cost-management approach to mitigate these pressures wherever possible.
We continue to make progress on the sale of non-core assets and remain committed to our objective of generating $230 million in proceeds. Although some transactions are taking longer than anticipated, this reflects our disciplined approach to ensuring we maximize value from these asset sales. Concurrently, we remain focused on improving our financial profile and creating long-term value for shareholders through a balanced approach to operational excellence, profitability improvement and disciplined capital allocation."
Financial Summary
Selected consolidated information
(in millions of Canadian dollars, except amounts per common share) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Sales
1,219
1,125
1,187
As Reported
Operating income
58
81
36
Net earnings (loss)
21
39
(3)
per common share (basic)
$0.21
$0.38
($0.03)
Adjusted****1
Earnings before interest, taxes, depreciation and amortization (EBITDA (A))
140
118
137
Net earnings
24
7
19
per common share (basic)
$0.24
$0.07
$0.19
Margin (EBITDA (A) / Sales)
11.5 %
10.5 %
11.5 %
Net debt1
1,879
1,901
2,104
Net debt / EBITDA (A) ratio1
3.3x
3.3x
3.8x
Segmented sales
(in millions of Canadian dollars) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Packaging Products
772
715
763
Tissue Papers
409
380
392
Inter-segment sales, Corporate, Recovery and Recycling activities
38
30
32
Sales
1,219
1,125
1,187
Segmented operating income (loss)
(in millions of Canadian dollars) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Packaging Products
68
88
46
Tissue Papers
20
20
25
Corporate, Recovery and Recycling activities
(30)
(27)
(35)
Operating income
58
81
36
**Segmented EBITDA (A)**1
(in millions of Canadian dollars) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Packaging Products
120
103
119
Tissue Papers
35
33
38
Corporate, Recovery and Recycling activities
(15)
(18)
(20)
**EBITDA (A)**1
140
118
137
1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
Analysis of results for the three-month period ended June 30, 2026 (compared to the same period last year)
The Corporation's second quarter sales of $1,219 million increased by $32 million compared with the same period last year. This increase reflects consolidated net benefits of $13 million from higher average selling prices and a favourable sales mix of $21 million. However, these factors were partially offset by a $2 million impact from lower volumes, mainly in the Packaging Products segment, reflecting the impact of business closures and dispositions in previous quarters.
The second quarter EBITDA (A)1 totaled $140 million, an increase of $3 million, or 2%, from the $137 million generated in the same period last year. This increase was driven by higher volumes, higher average selling prices and cost reduction initiatives across the Corporation's businesses. These impacts were partially offset by higher raw material and transportation costs.
The main specific items, before income taxes, that impacted our operating income and/or net earnings for the second quarter of 2026 were:
- $3 million of gains related to the sale of a business and some assets in Canada and in the United States (operating income and net earnings);
- $2 million of restructuring costs related to corporate organizational changes (operating income and net earnings);
- $6 million loss on financial instruments (operating income and net earnings).
For the three-month period ended June 30, 2026, the Corporation posted net earnings of $21 million, or $0.21 per common share, compared to a net loss of $(3) million, or ($0.03) per common share, in the same period of 2025. On an adjusted basis1, the Corporation posted net earnings of $24 million in the second quarter of 2026, or $0.24 per common share, compared to net earnings of $19 million, or $0.19 per common share, in the same period of 2025.
1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
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 September 3, 2026 to shareholders of record at the close of business on August 20, 2026. This dividend is an "eligible dividend" as per the Income Tax Act (R.C.S. (1985), Canada). During the second quarter of 2026, Cascades purchased no common shares for cancellation.
2026 Second Quarter Results Conference Call Details
Management will discuss the 2026 second quarter financial results during a conference call today at 9:00 a.m. ET. The call can be accessed by dialing 1-800-990-4777 (international 1-289-819-1299). 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 September 6, 2026 by dialing 1-888-660-6345 (international 1-289-819-1450), access code 00655 #.
Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs approximately 8,900 women and men across a network of 60 operating facilities, including 17 Recovery and Recycling facilities which are part of Corporate Activities and joint ventures managed by the Corporation, 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
(in millions of Canadian dollars) (unaudited)
June 30, 2026
December 31, 2025
Assets
Current assets
Cash and cash equivalents
96
48
Accounts receivable
477
426
Current income tax assets
11
12
Inventories
706
661
Current portion of financial assets
5
4
1,295
1,151
Long-term assets
Investments in associates and joint ventures
68
66
Property, plant and equipment
2,641
2,649
Intangible assets with finite useful life
27
30
Financial assets
3
5
Other assets
110
107
Deferred income tax assets
182
174
Goodwill and other intangible assets with indefinite useful life
501
491
4,827
4,673
Liabilities and Equity
Current liabilities
Trade and other payables
760
697
Current income tax liabilities
2
4
Current portion of long-term debt
78
70
Current portion of provisions for charges
5
8
Current portion of financial liabilities and other liabilities
29
28
874
807
Long-term liabilities
Long-term debt
1,897
1,874
Provisions for charges
58
58
Financial liabilities
14
8
Other liabilities
65
74
Deferred income tax liabilities
101
97
3,009
2,918
Equity
Capital stock
620
619
Contributed surplus
18
17
Retained earnings
1,077
1,042
Accumulated other comprehensive income
63
43
Equity attributable to Shareholders
1,778
1,721
Non-controlling interests
40
34
Total equity
1,818
1,755
4,827
4,673
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
For the 3-month periods ended June 30,
For the 6-month periods ended June 30,
(in millions of Canadian dollars, except per common share amounts and number of common shares) (unaudited)
2026
2025
2026
2025
Sales
1,219
1,187
2,344
2,341
Supply chain and logistics
751
702
1,430
1,381
Wages and employee benefits expenses
268
275
534
555
Depreciation and amortization
77
72
148
141
Maintenance and repair
58
67
118
131
Other operational costs
2
6
4
12
Impairment charges
—
23
8
24
Other loss (gain)
(3)
1
(52)
5
Restructuring costs
2
1
5
6
Loss on derivative financial instruments
6
4
10
—
Operating income
58
36
139
86
Financing expenses
28
33
59
69
Share of results of associates and joint ventures
(4)
(3)
(6)
(6)
Earnings before income taxes
34
6
86
23
Provision for income taxes
6
3
14
8
Net earnings including non-controlling interests for the period
28
3
72
15
Net earnings attributable to non-controlling interests
7
6
12
11
Net earnings (loss) attributable to Shareholders for the period
21
(3)
60
4
Net earnings (loss) per common share
Basic
$0.21
($0.03)
$0.59
$0.04
Diluted
$0.21
($0.03)
$0.59
$0.04
Weighted average basic number of common shares outstanding
101,346,974
101,152,145
101,315,523
101,073,415
Weighted average number of diluted common shares
101,665,022
101,169,690
101,848,292
101,294,977
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the 3-month periods ended June 30,
For the 6-month periods ended June 30,
(in millions of Canadian dollars) (unaudited)
2026
2025
2026
2025
Net earnings including non-controlling interests for the period
28
3
72
15
Other comprehensive income (loss)
Items that may be reclassified subsequently to earnings
Translation adjustments
Change in foreign currency translation of foreign subsidiaries
21
(63)
36
(104)
Change in foreign currency translation related to net investment hedging activities
(10)
34
(17)
74
Recovery of (provision for) income taxes
1
(5)
2
(5)
12
(34)
21
(35)
Items that are not released to earnings
Actuarial loss on employee future benefits
(1)
—
(1)
(1)
Other comprehensive income (loss)
11
(34)
20
(36)
Comprehensive income (loss) including non-controlling interests for the period
39
(31)
92
(21)
Comprehensive income attributable to non-controlling interests for the period
7
4
13
9
Comprehensive income (loss) attributable to Shareholders for the period
32
(35)
79
(30)
CONSOLIDATED STATEMENTS OF EQUITY
For the 6-month period ended June 30, 2026
(in millions of Canadian dollars) (unaudited)
CAPITAL STOCK
CONTRIBUTED SURPLUS
RETAINED EARNINGS
ACCUMULATED OTHER COMPREHENSIVE INCOME
TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS
NON- CONTROLLING INTERESTS
TOTAL EQUITY
Balance - Beginning of period
619
17
1,042
43
1,721
34
1,755
Comprehensive income
Net earnings
—
—
60
—
60
12
72
Other comprehensive income (loss)
—
—
(1)
20
19
1
20
—
—
59
20
79
13
92
Dividends
—
—
(24)
—
(24)
(7)
(31)
Stock options expense
—
1
—
—
1
—
1
Issuance of common shares upon exercise of stock options
1
—
—
—
1
—
1
Balance - End of period
620
18
1,077
63
1,778
40
1,818
For the 6-month period ended June 30, 2025
(in millions of Canadian dollars) (unaudited)
CAPITAL STOCK
CONTRIBUTED SURPLUS
RETAINED EARNINGS
ACCUMULATED OTHER COMPREHENSIVE INCOME
TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS
NON- CONTROLLING INTERESTS
TOTAL EQUITY
Balance - Beginning of period
616
16
1,019
73
1,724
47
1,771
Comprehensive income (loss)
Net earnings
—
—
4
—
4
11
15
Other comprehensive loss
—
—
(1)
(33)
(34)
(2)
(36)
—
—
3
(33)
(30)
9
(21)
Dividends
—
—
(24)
—
(24)
(27)
(51)
Stock options expense
—
1
—
—
1
—
1
Issuance of common shares upon exercise of stock options
2
—
—
—
2
—
2
Balance - End of period
618
17
998
40
1,673
29
1,702
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the 3-month periods ended June 30,
For the 6-month periods ended June 30,
(in millions of Canadian dollars) (unaudited)
2026
2025
2026
2025
Operating activities
Net earnings (loss) attributable to Shareholders for the period
21
(3)
60
4
Adjustments for:
Financing expenses
28
33
59
69
Depreciation and amortization
77
72
148
141
Impairment charges
—
23
8
24
Other loss (gain)
(3)
1
(52)
5
Restructuring costs
2
1
5
6
Loss on derivative financial instruments
6
4
10
—
Provision for income taxes
6
3
14
8
Share of results of associates and joint ventures
(4)
(3)
(6)
(6)
Net earnings attributable to non-controlling interests
7
6
12
11
Net financing expenses paid
(11)
(25)
(63)
(74)
Net income taxes paid
(5)
(5)
(9)
(7)
Dividends received
7
7
7
7
Payments, net of provisions, for charges and other liabilities, and other non-cash items
(12)
(22)
(18)
(51)
119
92
175
137
Changes in non-cash working capital components
(3)
(25)
(41)
(122)
116
67
134
15
Investing activities
Payments for property, plant and equipment
(40)
(44)
(68)
(80)
Proceeds from disposals of property, plant and equipment
3
26
34
26
Change in intangible and other assets
2
—
1
1
Proceeds from business disposal
2
—
62
—
(33)
(18)
29
(53)
Financing activities
Bank loans and advances
—
(1)
—
(7)
Change in credit facilities
1
(375)
(1)
(72)
Change in credit facilities without recourse to the Corporation
(35)
120
(39)
121
Issuance of unsecured senior notes, net of related expenses
—
541
—
541
Repurchase of unsecured senior notes
—
(281)
—
(456)
Payments of other long-term debt, including lease obligations (2026 - $44 million for the 6-month period ($23 million for the 3-month period); 2025 - $39 million for the 6-month period ($21 million for the 3-month period))
(23)
(21)
(44)
(40)
Issuance of common shares upon exercise of stock options
1
1
1
2
Dividends paid to non-controlling interests
(3)
(24)
(7)
(27)
Dividends paid to the Corporation's Shareholders
(12)
(12)
(24)
(24)
(71)
(52)
(114)
38
Net change in cash and cash equivalents during the period
12
(3)
49
—
Currency translation on cash and cash equivalents
(1)
—
(1)
(1)
Cash and cash equivalents - Beginning of the period
85
29
48
27
Cash and cash equivalents - End of the period
96
26
96
26
SEGMENTED INFORMATION
The Corporation's operations are managed in two segments: Packaging Products and Tissue Papers. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in the most recent Audited Consolidated Financial Statements for the year ended December 31, 2025.
The Corporation's operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The Chief Executive Officer has authority for resource allocation and management of the Corporation's performance and is therefore the CODM. The CODM assesses the performance of each reportable segment based on sales and earnings before interest, taxes, depreciation and amortization, adjusted to exclude specific items (EBITDA (A)). The CODM considers EBITDA (A) to be the best performance measure of the Corporation's activities.
Sales for each segment are prepared on the same basis as those of the Corporation. Inter-segment operations are recorded on the same basis as sales to third parties, which are at fair market value.
EBITDA (A) does not have a standardized meaning under IFRS Accounting Standards; accordingly, it may not be comparable to similarly named measures used by other companies. Investors should not view EBITDA (A) as an alternative measure to, for example, net earnings, or as a measure of operating results, which are IFRS Accounting Standards measures.
Sales by business segment are shown in the following table:
SALES
For the 3-month periods ended June 30 (in millions of Canadian dollars) (unaudited)
2026
2025
Total
Inter-segment
External
Total
Inter-segment
External
Packaging Products
772
(6)
766
763
(11)
752
Tissue Papers
409
—
409
392
—
392
Corporate, Recovery and Recycling activities
72
(28)
44
73
(30)
43
1,253
(34)
1,219
1,228
(41)
1,187
SALES
For the 6-month periods ended June 30 (in millions of Canadian dollars) (unaudited)
2026
2025
Total
Inter-segment
External
Total
Inter-segment
External
Packaging Products
1,487
(12)
1,475
1,525
(24)
1,501
Tissue Papers
789
—
789
756
—
756
Corporate, Recovery and Recycling activities
134
(54)
80
146
(62)
84
2,410
(66)
2,344
2,427
(86)
2,341
EBITDA (A) by business segment is reconciled to the IFRS Accounting Standards measure, namely operating income (loss), and is shown in the following table:
For the 3-month period ended June 30, 2026
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
68
20
(30)
58
Depreciation and amortization
53
15
9
77
Other gain
(3)
—
—
(3)
Restructuring costs
—
—
2
2
Loss on derivative financial instruments
2
—
4
6
EBITDA (A)
120
35
(15)
140
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
610
354
55
1,019
For the 3-month period ended June 30, 2025
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
46
25
(35)
36
Depreciation and amortization
49
14
9
72
Impairment charges
23
—
—
23
Other loss (gain)
2
(1)
—
1
Restructuring costs
—
—
1
1
Loss (gain) on derivative financial instruments
(1)
—
5
4
EBITDA (A)
119
38
(20)
137
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
594
331
52
977
For the 6-month period ended June 30, 2026
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
156
40
(57)
139
Depreciation and amortization
102
28
18
148
Impairment charges
8
—
—
8
Other gain
(50)
—
(2)
(52)
Restructuring costs
1
—
4
5
Loss on derivative financial instruments
6
—
4
10
EBITDA (A)
223
68
(33)
258
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
1,178
681
105
1,964
For the 6-month period ended June 30, 2025
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
106
49
(69)
86
Depreciation and amortization
95
27
19
141
Impairment charges
23
—
1
24
Other loss (gain)
6
(1)
—
5
Restructuring costs
1
—
5
6
Loss (gain) on derivative financial instruments
(3)
—
3
—
EBITDA (A)
228
75
(41)
262
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
1,197
635
104
1,936
Payments for property, plant and equipment by business segment are shown in the following table:
PAYMENTS FOR PROPERTY, PLANT AND EQUIPMENT
For the 3-month periods ended June 30,
For the 6-month periods ended June 30,
(in millions of Canadian dollars) (unaudited)
2026
2025
2026
2025
Packaging Products
34
33
80
67
Tissue Papers
16
14
23
22
Corporate, Recovery and Recycling activities
5
1
21
7
Total acquisitions
55
48
124
96
Right-of-use assets acquisitions (non-cash)
(12)
(10)
(57)
(34)
43
38
67
62
Acquisitions for property, plant and equipment included in "Trade and other payables"
Beginning of the period
13
20
17
32
End of the period
(16)
(14)
(16)
(14)
Payments for property, plant and equipment
40
44
68
80
Proceeds from disposals of property, plant and equipment
(3)
(26)
(34)
(26)
Payments for property, plant and equipment net of proceeds from disposals
37
18
34
54
SUPPLEMENTAL INFORMATION ON NON-IFRS ACCOUNTING STANDARDS MEASURES AND OTHER FINANCIAL 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 that of other corporations and some of these items 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 and realized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate hedge instruments and option fair value revaluation, foreign exchange gains or losses on long-term debt and financial instruments, fair value revaluation gains or losses on investments, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.
RECONCILIATION AND USES OF NON-IFRS ACCOUNTING STANDARDS MEASURES AND OTHER FINANCIAL 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 Accounting Standards ("non-IFRS Accounting Standards measures"), which are also calculated on an adjusted basis to exclude specific items. We believe that providing certain key performance and capital measures, as well as non-IFRS Accounting Standards 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 Accounting Standards measures and other financial measures are used in our financial disclosures:
Non-IFRS Accounting Standards measures
- Adjusted earnings before interest, taxes, depreciation and amortization or EBITDA (A): represents the operating income (as published in the Consolidated Statements of Earnings (Loss) of the Consolidated Financial Statements) before depreciation and amortization excluding specific items. Measure used to assess recurring operating performance and the contribution of each segment on a comparable basis.
- Adjusted net earnings: Measure used to assess the Corporation's consolidated financial performance on a comparable basis.
- Adjusted cash flow: Measure used to assess the Corporation's capacity to generate cash flows to meet financial obligations and/or discretionary items such as share repurchases, dividend increases and strategic investments.
- Free cash flow: Measure used to calculate the excess cash the Corporation generates by subtracting capital expenditures (excluding strategic projects) from the EBITDA (A).
- Working capital: Measure used to assess the short-term liquidity of the Corporation.
Other financial measures
- Total debt: Measure used to calculate all the Corporation's debt, including long-term debt and bank loans. Often put in relation to equity to calculate the debt-to-equity ratio.
- Net debt: Measure used to calculate the Corporation's total debt less cash and cash equivalents. Often put in relation to EBITDA (A) to calculate the net debt to EBITDA (A) ratio.
Non-IFRS Accounting Standards ratios
- Net debt to EBITDA (A) ratio: Ratio used to assess the Corporation's ability to pay its debt and evaluate financial leverage.
- EBITDA (A) margin: Ratio used to assess operating performance and the contribution of each segment on a comparable basis calculated as a percentage of sales.
- Adjusted net earnings per common share: Ratio used to assess the Corporation's consolidated financial performance on a comparable basis.
- Ratio of net debt / (total equity and net debt): Ratio used to evaluate the Corporation's financial leverage and the risk to Shareholders.
- Working capital as a percentage of sales: Ratio used to assess the Corporation's operating liquidity performance.
- Adjusted cash flow per common share: Ratio used to assess the Corporation's financial flexibility.
- Free cash flow ratio: Ratio used to measure the liquidity and efficiency of how much more cash the Corporation generates than it uses to run the business by subtracting capital expenditures (excluding strategic projects) from the EBITDA (A) calculated as a percentage of sales.
Non-IFRS Accounting Standards measures and other financial measures are mainly derived from the consolidated financial statements, but do not have the meanings prescribed by IFRS Accounting Standards. 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 Accounting Standards. In addition, our definitions of non-IFRS Accounting Standards measures and other financial measures may differ from those of other corporations. Any such modification or reformulation may be significant.
The Corporation's operations are managed in two segments: Packaging Products and Tissue Papers.
The CODM assesses the performance of each reportable segment based on sales and earnings before interest, taxes, depreciation and amortization, adjusted to exclude specific items (EBITDA (A))1. The CODM considers EBITDA (A)1 to be the best performance measure of the Corporation's activities.
EBITDA (A)1 by business segment is reconciled to the IFRS Accounting Standards measure, namely operating income (loss), and is shown in the following table:
Q2 2026
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
68
20
(30)
58
Depreciation and amortization
53
15
9
77
Other gain
(3)
—
—
(3)
Restructuring costs
—
—
2
2
Loss on derivative financial instruments
2
—
4
6
**EBITDA (A)**1
120
35
(15)
140
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
610
354
55
1,019
Q1 2026
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
88
20
(27)
81
Depreciation and amortization
49
13
9
71
Impairment charges
8
—
—
8
Other gain
(47)
—
(2)
(49)
Restructuring costs
1
—
2
3
Loss on derivative financial instruments
4
—
—
4
**EBITDA (A)**1
103
33
(18)
118
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
568
327
50
945
1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
Q2 2025
(in millions of Canadian dollars) (unaudited)
Packaging Products
Tissue Papers
Corporate, Recovery and Recycling activities
Consolidated
Operating income (loss)
46
25
(35)
36
Depreciation and amortization
49
14
9
72
Impairment charges
23
—
—
23
Other loss (gain)
2
(1)
—
1
Restructuring costs
—
—
1
1
Loss (gain) on derivative financial instruments
(1)
—
5
4
**EBITDA (A)**1
119
38
(20)
137
Supply chain and logistics and Wage and employee benefits expenses included in operating income (loss)
594
331
52
977
The following table reconciles net earnings (net loss) and net earnings (net loss) per common share, as reported, with adjusted net earnings1 and adjusted net earnings per common share1:
(in millions of Canadian dollars, except per common share amounts and number of common shares) (unaudited)
NET EARNINGS (NET LOSS)
NET EARNINGS (NET LOSS) PER COMMON SHARE2
Q2 2026
Q1 2026
Q2 2025
Q2 2026
Q1 2026
Q2 2025
As reported
21
39
(3)
$0.21
$0.38
($0.03)
Specific items:
Impairment charges
—
8
23
—
$0.06
$0.17
Other loss (gain)
(3)
(49)
1
($0.02)
($0.42)
$0.01
Restructuring costs
2
3
1
$0.01
$0.02
—
Loss on derivative financial instruments
6
4
4
$0.04
$0.03
$0.03
Loss on repurchase of long-term debt
—
—
1
—
—
$0.01
Tax effect on specific items, other tax adjustments and attributable to non-controlling interest2
(2)
2
(8)
—
—
—
3
(32)
22
$0.03
($0.31)
$0.22
Adjusted1
24
7
19
$0.24
$0.07
$0.19
Weighted average basic number of common shares outstanding
101,346,974
101,283,722
101,152,145
The following table reconciles cash flow from operating activities with EBITDA (A)1:
(in millions of Canadian dollars) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Cash flow from operating activities
116
18
67
Changes in non-cash working capital components
3
38
25
Net income taxes paid
5
4
5
Net financing expenses paid
11
52
25
Payments, net of provisions, for charges and other liabilities, and non-cash items, net of dividends received
5
6
15
**EBITDA (A)**1
140
118
137
1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
2 Specific amounts per common share are calculated on an after-tax basis and are net of the portion attributable to non-controlling interests. Per share 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 the "Provision for income taxes" section for more details.
The following table reconciles cash flow from operating activities with cash flow from operating activities (excluding changes in non-cash working capital components) and adjusted cash flow from operating activities1. It also reconciles adjusted cash flow from operating activities1 to adjusted cash flow generated (used)1 before specific items, which is also calculated on a per common share basis:
(in millions of Canadian dollars, except per common share amounts or otherwise noted) (unaudited)
Q2 2026
Q1 2026
Q2 2025
Cash flow from operating activities
116
18
67
Changes in non-cash working capital components
3
38
25
Cash flow from operating activities (excluding changes in non-cash working capital components)
119
56
92
Restructuring costs paid
4
3
9
Adjusted cash flow from operating activities1
123
59
101
Payments for property, plant and equipment
(40)
(28)
(44)
Change in intangible and other assets
2
(1)
—
Lease obligation payments
(23)
(21)
(21)
62
9
36
Dividends paid to non-controlling interests
(3)
(4)
(24)
Dividends paid to the Corporation's Shareholders and to non-controlling interests
(12)
(12)
(12)
Adjusted cash flow generated (used) before specific items1, 2
47
(7)
—
Adjusted cash flow generated (used) before specific items per common share1, 2 (in Canadian dollars)
$0.46
($0.07)
$—
Weighted average basic number of common shares outstanding
101,346,974
101,283,722
101,152,145
The following table reconciles total debt1 and net debt1 with the ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A))1:
(in millions of Canadian dollars) (unaudited)
June 30, 2026
March 31, 2026
June 30, 2025
Long-term debt
1,897
1,908
2,057
Current portion of long-term debt
78
78
70
Bank loans and advances
—
—
3
Total debt1
1,975
1,986
2,130
Less: Cash and cash equivalents
(96)
(85)
(26)
Net debt****1 as reported
1,879
1,901
2,104
Last twelve months EBITDA (A)1
572
569
548
Net debt / EBITDA (A) ratio1
3.3x
3.3x
3.8x
1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.
2 "Adjusted cash flow generated (used) before specific items" has been aligned to conform with the current year's presentation.
Summary
KINGSEY FALLS, QC, Aug. 6, 2026 /PRNewswire/ -- Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended June 30, 2026. Q2 2026 Highlights Sales of 1,219million(comparedwith1,125 million in Q1 2026 and $1,187 million in Q2 2025); Operating...