You see impressive results. 2020 ANNUAL REPORT 2020 ANNUAL We see CASCADES unbreakable commitment. 2020 Annual Report 2020 at a Glance Containerboard Specialty Recovery Packaging Products A Canadian leader A Canadian leader A North American leader in the recovery in industrial and food packaging of recycled fibres 6th largest producer in North America A leading North American producer of honeycomb paperboard Tissue Papers Boxboard 3 1 A leader in tissue papers Europe 1.3 OSHA rate production in Canada 2nd largest producer 4th largest producer of coated recycled in North America boxboard in Europe 3.4 M 82% 80% short tons of recycled fibres of the fibres used to of our mills’ manufacturing are used by our North American manufacture our products waste is put to beneficial use and European paper mills in North America and Europe are recycled 15%4 51%5 22%4 reduction in our energy reduction in our greenhouse reduction in our water consumption since 2010 gas emissions since 1990 consumption since 2010 $244 M 17th 16th Global 100 Most Sustainable Canada’s top 50 corporate Invested in property, plant & equipment, Corporations in the World citizens according to excluding right-of-use assets according to Corporate Knights Corporate Knights $5,157 M Sales 10th consecutive Canada’s Top 100 $665 M year Employers most responsible company according to Mediacorp 2 OIBD and brand according to Quebecers, Canada Inc. as measured by the Barometer of Responsible Consumption $675 M Adjusted OIBD2 1 Via our 57.6% equity ownership in Reno de Medici S.p.A. (at Dec. 31, 2020), a public Italian company. 2 Please refer to the “Forward-looking Statements” and “Supplemental Information on Non-IFRS Measures” sections for more details. 3 OSHA frequency rate: Number of accidents with lost time or temporary assignments or medical treatments X 200,000 hours/hours worked. 4 Intensity: Water (Cubic metres of waste water/Metric tonne of sealable products); Energy (Gigajoules of energy purchased/Metric tonne of sealable products). 5 Intensity. Direct Emissions. Preliminary data. Financial Snapshot (in millions of Canadian dollars, unless otherwise noted) 2020 20191 2018 AS REPORTED Sales 5,157 4,996 4,649 Operating income 366 261 228 % of sales 7.1% 5.2% 4.9% Operating income before depreciation and amortization (OIBD)2 665 550 472 % of sales 12.9% 11.0% 10.2% Net earnings 198 72 57 per share (in dollars) $2.04 $0.77 $0.60 Dividend per share (in dollars) $0.32 $0.24 $0.16 ADJUSTED2 Operating income 376 315 245 % of sales 7.3% 6.3% 5.3% Operating income before depreciation and amortization (OIBD)2 675 604 489 % of sales 13.1% 12.1% 10.5% Net earnings 187 96 79 per share (in dollars) $1.95 $1.02 $0.83 Return on assets2, 3 13.1% 12.0% 10.6% Return on capital employed2, 4 6.2% 5.4% 4.6% FINANCIAL POSITION (AS AT DECEMBER 31) Total assets 5,412 5,188 4,948 Capital employed4 4,313 4,206 3,881 Net debt2 1,679 1,963 1,769 Net debt /adjusted OIBD2 2.5x 3.25x 3.5x Equity attributable to shareholders 1,753 1,492 1,506 per share (in dollars) $17.14 $15.83 $15.99 Working capital as a % of sales7 9.6% 10.1% 10.6% KEY INDICATORS Total shipments (in thousands of short tons (s.t.))5 3,494 3,366 3,225 Manufacturing capacity utilization rate6 93% 92% 93% US$/CAN$ - Average rate $0.75 $0.75 $0.77 1 2019 consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation. Please refer to Note 5 of the 2020 Audited Consolidated Financial Statements for more details. 2 See “Forward-looking Statements” and “Supplemental Information on Non-IFRS Measures” sections for more details. 3 Return on assets is a non-IFRS measure defined as the last twelve months’ (“LTM”) adjusted OIBD/LTM quarterly average of total assets less cash and cash equivalents. 4 Return on capital employed is a non-IFRS measure and is defined as the after-tax amount of the LTM adjusted operating income, including our share of core associates and joint ventures, divided by the LTM quarterly average of capital employed. Capital employed is defined as the quarterly total average assets less trade and other payables and cash and cash equivalents. 5 Shipments do not take into account the elimination of business sector inter-segment shipments. Shipments from our Specialty Products segment are not presented as it uses different units of measure. 6 Defined as: Manufacturing internal and external shipments/practical capacity. Excluding Specialty Products segment manufacturing activities. 7 Working capital includes accounts receivable (excluding the short-term portion of other assets) plus inventories less trade and other payables. Percentage of sales = Average LTM working capital/LTM sales. It includes or excludes significant business acquisitions and disposals. Financial Highlights Symbol: CAS 102.3 million 133.7 million Common shares Total number of common (ON THE TORONTO STOCK EXCHANGE) outstanding shares traded as at December 31, 2020 in 2020 S&P / TSX $0.08 2.2% Quarterly dividend Annual Indices per share dividend yield in 2020 as at December 31, 2020 - COMPOSITE - SMALL CAP $17.62 $9.94 Intraday high Intraday low - DIVIDEND in 2020 in 2020 - RENEWABLE ENERGY & CLEAN TECHNOLOGY $1.49 billion Moody’s: Ba2 (stable) Market capitalization as at December 31, 2020 S&P: BB- (stable) Corporate credit ratings as at December 31, 2020 Cascades Share Price Performance in 2020 100 $14.55 as at December 31, 2020 1600 1400 1200 1000 an eb March Aprl May une ul Au ept t No e ASS losing price ($ Cascades Inc.’s 2020 Annual Information Form will be available, upon request, from the Corporation’s head Table of office as of March 30, 2021. The document will also be accessible via the Corpora- tion’s website (www.cascades.com) and will be filed on Contents SEDAR (www.sedar.com) as of this date. On peut se procurer la version française du présent rapport annuel en s’adressant au siège social de la Société à l’adresse suivante : Secrétaire corporatif Message from Alain Lemaire Cascades inc. 04 404, boulevard Marie-Victorin Executive Chairman of the Board Kingsey Falls (Québec) J0A 1B0 A Committed Partnership Message from Mario Plourde 06 President and Chief Executive Officer An Unbreakable Determination Our Values, 10 our Commitment Financial Information 13 Management’s Discussion and Analysis, Management’s Transfer Agent and Registrar Report, Independent Auditor’s Computershare Shareholders Services Report and Consolidated 1500 Robert-Bourassa Boulevard Suite 700 Financial Statements Montréal, Québec H3A 3S8 Canada Telephone: 514-982-7555 Toll-free (Canada): 1-800-564-6253 Raw Materials and Fax: 514-982-7635 130 Overview of our Results [email protected] Cascades Head Office 132 Worldwide Cascades Inc. 404 Marie-Victorin Blvd. Kingsey Falls, Québec J0A 1B0 Canada Telephone: 819-363-5100 Fax: 819-363-5155 Investor Relations Cascaders on the cover page: Cascades Inc. 772 Sherbrooke Street West Suite 100 Jessica Carbonneau, Production Manager Montréal, Québec H3A 1G1 Canada Parfait Mutwarangabo, Security Guard Jennifer Aitken, MBA Van-An Dang Vu, Continuous Improvement Director, Investor Relations and Quality Coordinator [email protected] Telephone : 514-282-2697 Stéphane Couture, Welder www.cascades.com/investors 3 Alain Lemaire Executive Chairman of the Board of Directors 4 2020 Annual Report A Committed Partnership Dear Shareholders, 2020 was a difficult year in many respects and the tragic human toll and global economic contraction caused by the COVID-19 pandemic will forever be etched in our collective memories. Cascades is proud to have counted itself among those companies in a position to deliver essential products and services during this time of great crisis. We fulfilled this mission in a professional, efficient and dependable manner all through the year. During times of great uncertainty and turbulence, more than ever, the members of the Cascades Board of Directors must actively engage with Senior Management to successfully carry out their roles and responsibilities. Over the past year, this involved regular updates and rigorous appraisals of the Corporation’s COVID-19 action plans, including the steps taken to safeguard production continuity, ensure supply chain integrity and management, and provide employees with compre- hensive health protocols for the workplace and with personal support when it was needed. Equally central was the priority to communicate and coordinate proactively with customers to ensure their dynamic demand needs were being met. The Board’s engagement encompasses more than provi- obstacles. The events of the past year serve as a reminder ding an additional layer of operational and financial that companies like Cascades can have an important role to vigilance during periods of instability. It also involves com- play in society, and can have a positive impact by working prehensive and continuous oversight of a multitude of together with all of their stakeholders. This engagement to business risks and practices, be they environmental, social, social responsibility has always been a central tenet of or governance related. The first of these, sustainability, has Cascades and the decisions it makes, and is one that the been ingrained in the Corporation’s internal and business Corporation remains resolutely committed to. practices for decades. This commitment is well illustrated by the Corporation’s MSCI ESG Rating of A and was further I would be remiss if I did not take this opportunity to thank recognized by Cascades’ being ranked 17th in the Top 100 Mr. Louis Garneau who will be retiring from the Board after Most Sustainable Corporations in the World—placing first in 25 years of loyal service.