BOXBOARD EUROPE GROUP OVERVIEW

BOXBOARD EUROPE
GROUP OVERVIEW
ANALYST AND INVESTOR DAY
SEPTEMBER 25, 2015
IGNAZIO
CAPUANO
2
President & CEO of
Reno De Medici SpA
•  CEO since 2004
•  With RDM since 2003
•  In paper industry
since 1991
BOXBOARD EUROPE GROUP SNAPSHOT
LTM 06/30/2015
(M€)
(M CAN$)
Sales €575
EBITDA €45
EBITDA Margin 8%
$807
$64
8%
Total Assets €457
$636
OPERATING PLATFORM MANUFACTURING
Units 7
Machine/Lines 9
Capacity ~1,100 short tons
•  Most of the industry is not integrated in Europe
3
CORPORATE STRUCTURE
Cascades Inc.
100%
Cascades S.A.S.
57.61%
4
100%
Reno De Medici SpA
La Rochette Mill
Sales: 458 M€
EBITDA: 40 M€
Sales: 118 M€
EBITDA: 5 M€
Note: LTM 06/30/2015 numbers
TURNAROUND STORY
2004-2008
Major financial restructuring
•  Redundant assets disposals (non-core, real estate)
•  Business combination between Reno and Cascades
2008-2015
Consolidating and Focusing
•  Production capacity rationalization – recycled and virgin
•  Update top-of-class facilities
•  Broader market presence
•  Sales structure improvement
5
STEADY GROWTH
EBITDA & EBITDA Margin
(M€)
50
48
40
40
30
29
20
10
6%
45
33
6%
7%
2012
2013
9%
8%
2014
LTM
Q2-2015
0
2011
6
Energy credits totaling €4M in 2013, €6M in 2014 and €2M in LTM Q2-2015
STRONG PRODUCTION PLATFORM
CAPACITY
(‘000 s.t.)
MILL COUNTRY
2008
2015
PRODUCTS
Villa Santa Lucia Italy
193
220
Liner/WLC
Santa Giustina Italy
190
240
WLC
205
220
Liner/GD/WLC
105
110
WLC
105
95
Specialty: OG/GK
35
35
WLC
833
920
Arnsberg Germany
Blendecques France
Ovaro Italy
Almazan (for sale) Spain
Total
Geographically diversified with
3 top-of-class facilities
7
COMPLEMENTARY VIRGIN PRODUCTION
•  1st presence by Cascades in
Europe in 1985
•  Total capacity: ~175,000 s.t.
•  2 board machines (#2 & #3)
•  GC1-GC2 grades
(220 to 440 g/m2)
•  Mechanical pulp mill
•  Integrated with sheeting
capacity
8
EXTENSIVE EUROPEAN PLATFORM
M
Well-positioned
to service
Central Europe
M
M
M
M
M
M
M
9
M
Manufacturing – Recycled grades
Manufacturing – Virgin grades
WESTERN EUROPE IS CORE MARKET
1H 2015 Recycled Grades Sales
Breakdown by Geography
38%
Italy
France
Germany, Austria
and Switzerland
Rest of Western
Europe
Eastern Europe
8%
90% in
Continental
Europe
13%
Overseas
19%
10
16%
6%
STRONG MARKET POSITION
WLC + FBB Capacity
MAYR MELNHOF
1
METSÄBOARD
RDM + CASCADES
2
STORA ENSO
3
KOTKAMILLS
WEIG KARTON
IP
BUCHMANN
SMURFIT KAPPA
HOLMEN
FISKEBY
OTHERS
(‘000 m.t.) 0
#2 producer of
recycled boxboard
in Europe
300
WLC
11
600
900
1 200
FBB
Source: Based on public reports and Cascades’ estimates
1 Including the new folding boxboard machine at the Husum Mill with a total capacity of 400,000 m.t. starting up in Q1-2016
2 Excluding the Barcelona WLC Mill sold in Q2-2015
3 Including the conversion to FBB of paper machine #2 at the Kotka mill in Finland
1 500
1 800
WIDE END-USERS’ PORTFOLIO
Breakdown of 2014 sales by end-user
Others
18%
Merchant
sales
13%
Non-Food
20%
12
Food &
Food
services
49%
VIRGIN BOXBOARD ACTIVITIES
Italy
19%
France
47%
Spain
12%
Germany
7%
UK
Others 5%
10%
Food/
Beverage
35%
Others
10%
Pharmacy
42%
●  France is the main market
●  Strong position in Italy and Spain as well
●  Germany is continuously growing since the
closure of Djupafors
13
STRATEGIC FOCUS
GROWTH
AREAS
PRODUCTIVITY
INITIATIVES
• 
Strengthen presence in growing markets (i.e.
Eastern Europe)
• 
Continue to reduce leverage to provide flexibility
• 
Strategic investment to reduce costs and
improve quality and margins (energy, automation
and capacity creep)
Increase synergies between our recycled and
virgin platforms
• 
• 
14
IT upgrades
INCREASE EASTERN EUROPE PRESENCE
1H 2015 Recycled Grades Sales
Breakdown by Geography
73%
•  Build on our established
presence to grow in
Eastern Europe
19%
•  Continue to be less reliant
on overseas sales
8%
Western Europe
15
Eastern Europe
Overseas
INCREASE SYNERGIES BETWEEN OUR
TWO PLATFORMS
•  Continue to increase coordination undertaken over the last
few years
−  Single sales organization for all Cascades and Reno De
Medici cartonboard products
−  Optimize purchasing to capture economies of scale
16
REDUCE LEVERAGE TO MAINTAIN
FLEXIBILITY
(M€)
Net Financial Debt Reno De Medici
150
5,0x
120
4,0x
90
3,0x
60
2,0x
30
1,0x
0
0,0x
Net financial debt
17
1
Net debt/EBITDA multiple
1 2008-2010: as reported. 2011-LTM Q2-2015: excluding specific items and discontinued operations
REDUCE COSTS TO IMPROVE MARGINS
EBITDA Margin1 (%)
2014
06/30/2015 YTD
Mayr-Melnhof (MM Karton Division)
11%
8%
Metsäboard (Cartonboard Division)
13%
NA
12%
8%
8%
9%
Average
Boxboard Europe Group
•  Rationalization achieved in the asset portfolio
•  Investments in core assets to improve efficiency and reduce costs
•  Benefits expected over the coming years, especially in a context of
lower energy costs
•  Will help to further increase operating margins
18
1 Based on public reports and Cascades’ estimates
QUESTIONS
19
NOTES
20