Cascades Inc.

Mesdames et messieurs, bienvenue à la téléconférence des résultats financiers du premier trimestre 2025 de Cascade. 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 Cascade First Quarter 2025 Financial Results Conference Call. 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. Ms. Aitken, you may begin the conference.

Thank you, Operator. Good morning, everyone, and thank you for joining our first quarter 2025 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. Joining us for the question period at the end of the call are Jean-David Tarzif, Executive Vice President, Packaging, and Jérôme Parlier, 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 Q1 2025 investor presentation for details. This presentation, along with our first 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 Q1 performance. Hugues?

Thank you, Jennifer, and good morning, everyone. I would like to begin with some brief general comments regarding our first quarter results. The business environment was more complex than usual, given the ambiguity regarding tariffs and trade policies around the world. This uncertainty led to a decrease in consumer confidence and demand levels in the second half of the quarter. These factors impacted our performance both in terms of sales volume and production costs. Given this context, sales levels decreased 5% from Q4 as lower volumes more than offset a favorable exchange rate and average selling prices. Year over year, Sales increased 4%, with selling prices and exchange rates fully offsetting a negative volume impact. Consolidated EBITDA of $125 million decreased 14% from Q4. This was driven by lower volumes and higher operational costs associated with lower production levels. Trade costs were also a slight headwind, as were the usual seasonally higher energy costs. These factors more than offset benefits from favorable raw material costs, exchange rate, and selling prices. Year-over-year consolidated EBITDA increased 21% as stronger pricing in our packaging activities offset lower volumes and higher energy and production costs across our businesses. We provide a financial breakdown of the impact of these factors sequentially and year-over-year on slide four. On the raw material side, highlighted on slides five and six, The Q1 average index price for OCC decreased by 6% from Q4, and it was 23% lower year over year. As expected, fiber availability was seasonally softer, and we consume inventories to limit market exposure. Our fiber availability has increased since mid-March, which supported stable index prices, followed by a $5 to $10 reduction, depending on region, earlier this week. Currently, we expect favorable pricing, in the coming months. Average Q1 index prices for white recycled paper grades increased 5% from Q4, but are 12% below last year levels. This reflected lower seasonal generation and higher export and domestic demand levels. We are expecting another slight increase in Q2 as mills build inventories ahead of lower generation levels in the summer months. Fault prices were relatively stable sequentially, up 4% in the case of softwood and down 2% for hardwood. Year-over-year prices were higher, up 22% and 4% respectively. The North American market was disrupted by the threat of tariffs on Canadian pulp, which led many U.S. customers to build stock ahead of the implementation of tariffs. Focus has since shifted to commercial tensions between China and the U.S., We would expect the softwood market to ease as producers, historically tied to the Chinese market, seek alternative domestic customers. Moving now to the results of our businesses, as highlighted on page 8 through 13 of the presentation. Following the 2024 combination of our container board and specialty product segments, these businesses are now presented as a combined packaging business. We have provided quarterly and annual legacy reporting comparatives Figures on slide 7. Beginning with packaging, our first quarter sales decreased 3% sequentially. This was driven entirely by lower volumes, partially offset by slight selling price and exchange rate benefits. As Q1 progressed, we saw a deterioration in demand levels as consumers and businesses became increasingly cautious in the face of growing tariff and trade uncertainty. To this end, we provide box shipment data for Cascade in the Canadian and U.S. industry on slide 8 and 9. Epidone Q1 was $109 million, a 17% decrease from Q4. Results benefited from lower raw material costs and the implementation of price increases. These were more than offset by the effect from lower volumes and the resulting higher operating cost levels. Year-over-year sales increased by 7%. with benefits from higher selling prices and more favorable exchange rates, more than offsetting a negative volume impact. Habitat levels increased 45% from a year-ago period, driven by higher selling prices. Lower raw material costs benefited manufacturing results by $10 million. This was partially offset by a corresponding $8 million impact from higher input costs related to a mix of products sold in our packaging distribution activities. the last of which were counterbalanced by higher selling prices. Lower volumes and higher operating costs partially offset these benefits. Moving now to our tissue business. First quarter sales decreased 8% sequentially as lower volumes fully offset slight benefits from higher average selling prices and favorable exchange rates. Converted product shipments in short tons decreased by 15% in away from home and 5% in the retail market. EBITDA of $37 million decreased 18% from Q4, driven by lower volumes, higher seasonal energy costs, and increased freight costs. Lower raw material costs partially offset these impacts. Sales were stable year-over-year, decreasing 1%. This reflected a more favorable exchange rate, offset by impacts from lower volumes and adverse selling price. Shipments decreased 4% year-over-year, with a 5% decrease in retail and a 3% decrease in away-from-home. Year-over-year EBITDA decreased by 13 million, reflecting lower volumes, higher operating and raw material costs, and lower selling prices. Our tissue volume decreased compared to both periods. Due to market uncertainty, some customers focused on reducing their inventory levels during the quarter. I would highlight that their volume decline in our retail business reflects the transition impact of our late 2024 strategic decision. to realign and diversify our product and customer portfolio. Additional volumes will be added in 2025 as this transition is completed. Corporate activities costs were $10 million lower this quarter compared to Q4. This reflects a foreign exchange loss in Q4 of last year and lower stock-based compensation expenses. I will now pass the call to Alan, who will briefly discuss some of the financial highlights. Alan?