Cascades Inc.

Mesdames et messieurs, bienvenue à la téléconférence des résultats financiers du quatrième trimestre 2024 de CASCAD. Je m'appelle Sylvie et je serai votre opératrice aujourd'hui. Toutes les lignes sont présentement en mode d'écoute seulement. Suite aux commentaires des dirigeants, il y aura une période de questions. Good morning. My name is Sylvie and I will be your conference operator today. At this time, I would like to welcome everyone to the CASCAD fourth quarter 2024 financial results conference call. Note that all lines are currently in listen-only mode. After the speaker's remarks, there will be a question-and-answer session. I will now pass the call to Jennifer Aitken, Director of Investor Relations for Cascade. Please go ahead, Ms. Aitken.

Thank you, Sylvie. Good morning, everyone, and thank you for joining our fourth quarter 2024 conference call. We will begin with an overview of our operational and financial results, followed by some concluding remarks. after which we will begin the question period. Today's speakers will be Hugues Simon, President and CEO, and Alan Hogg, CFO. Also joining us for the question period at the end of the call are Jean-David Tardif, Executive Vice President, Packaging, and Jérôme Parguet, Executive Vice President, Tissue. Before I turn the call over to my colleagues, I would like to highlight that certain statements made during this call will discuss historical and forward-looking matters. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings. These statements, the investor presentation, and the press release also include data that are not measures of performance under IFRS. Please refer to our Q4 2024 investor presentation for details. This presentation, along with our fourth quarter press release, can be found in the investor section of our website. If you have any questions, please feel free to contact us after the session. I will now turn the call over to our CEO, Hugues Simon, who will begin with a review of our Q4 performance. Hugues?

Thank you, Jennifer, and good morning, everyone. Our fourth quarter performance was in line with our expectations. Sales levels were stable versus Q3 and increased 6% year over year. Sequentially, favorable average selling prices and exchange rate offset softer seasonal volume, and a slightly negative sales mix. Year over year, selling prices, volume, and exchange rates were all tailwinds in our packaging businesses. Consolidated EBITDA of $146 million increased 4% from Q3, mainly reflecting lower raw material costs in our container board segment. Year over year, consolidated EBITDA increased 20% due to stronger contribution from our packaging activities. On the raw material side, highlighted on slide 5 and 6, the Q4 average index price for OCC decreased 23% from Q3 and was stable year over year. Fiber availability was good, with strong seasonal generation and low overall export activity, leading to a $20 per short-ton reduction in October and a further $5 reduction in November and December. We don't expect any major change in these market conditions in the coming months. The exception to this would be the potential disruption related to tariffs, which I will touch on later. Average four-quarter index prices for white recycled paper grapes decreased 7% from Q3 and 14% from last year. The market remained balanced, with readily available volumes of fibers translating into a small decrease in pricing in the quarter. We began to see tighter supply in late December on stronger demand from tissue mills, conditions that have continued into January, which led to a $10 increase recently. Bulk prices were lower sequentially, down 4% in the case of softwood and 12% for hardwood. Year-over-year prices remain higher, up 29% and 20% respectively. Market conditions, improve in Q4, with an abundant supply of eucalyptus leading to decreases in index prices. We expect stable market conditions for these grades in the coming months. Toughwood grades saw more stability in Q4, but continued concern about wood supply support for a more prudent market environment. Tons are readily available and our mills are well supplied. Lumber tariffs imposed in the future may impact Canadian pot mills, and we're making necessary plans in the event this occurs. Moving now to the results of each of our business segments as highlighted on page 7 through 12 of the presentation. Beginning with container board, Q4 sales were stable sequentially with higher average selling prices upsetting lower seasonal volumes. Sequentially, shipments decreased 1% from Q3. This reflects a 1% decrease on the parent role side and a 2% decrease in shipment levels of converted products. Converting shipments decreased 2.7% in Canada, below the 1.7% decrease in the Canadian market. U.S. converting shipments increased 3.7%, outperforming the 1.1% market decrease. EBITDA in Q4 was $104 million, or 17% on a margin basis. This represents a 16% increase from Q3 and is the fourth consecutive EBITDA improvement. Results benefited from lower raw material costs, recent market price increases, and beneficial exchange rates. These benefits were partially offset by lower volumes. Year-over-year sales increased by 9%, with benefits from higher selling prices and volumes and more favorable exchange rates upsetting a sales mix impact. EBITDA levels increased 55% from a year-ago period. Year-over-year shipments increased by 3% in Q4. This reflects an 8.5% increase in parent roll shipments, reflecting the growing production at the Bear Island facility and a 1.5% decrease in shipments of converted products. Converting shipments decreased by 1.5% in Canada, below the 4.8% increase in the Canadian market. U.S. converting shipments decreased 1.4%, below the 0.2% U.S. market decrease. Full year 2024, converting shipments increased 3.7% in Canada, slightly below the industry's 5.1%. In the U.S., shipments increased by 3.6%, outperforming the industry's 0.1% increase. The specialty product business continued to deliver solid results. Q4 sales increased 4% from Q3 on improved selling price, sales mix, and exchange rate. EBITDA was up 4% or 1 million from Q3, driven by higher realized spreads, and a margin of 16% remained solid. Year-over-year sales increased 9% in Q4, with higher selling prices in certain products, stronger volume, and a favorable exchange rate driving this growth. EBITDA improved by 47% or 9 million on higher realized spreads. Moving now to our tissue business. Four-quarter sales increased 1% sequentially as higher average selling price offset lower seasonal volume. Converted product shipments decreased 2% in away from home and 1% in the retail market. EBITDA of $45 million increased 5% from Q3 and is in line with expectation, driven by selling prices and lower raw material costs. Sales also increased 1% year-over-year. This reflected favorable exchange rates upset by a slightly negative average selling price. Shipments were stable year-over-year. On the converting side, shipments were stable, the result of a 0.8% increase in retail and a 1.9% decrease in away-from-home. The average selling price increased by 1% year-over-year, reflecting sales mix and a beneficial exchange rate. Year-over-year EBITDA decreased by $16 million, reflecting mainly the outcome of higher raw material costs. Corporate activities contribution was $11 million lower this quarter compared to the third quarter due to an unfavorable exchange rate variation on working capital and treasury items and higher costs related to health insurance for U.S. employees. I'll now pass the call to Alan, who will briefly discuss some of the financial highlights.