Stingray Group Inc. — Investor Presentation 2021

Feb 3, 2021

Investor presentation

Third Quarter 2020 Results February 2021

This presentation has been prepared by Stingray Digital Group Inc. ("Stingray" or the "Corporation") solely for information purposes. Recipients of this presentation may not reproduce or otherwise redistribute, in whole or in part, this presentation to any other person. Unless indicated otherwise, all amounts presented in this presentation are in Canadian dollars.

Forward-Looking Information

This document contains forward-looking information within the meaning of applicable Canadian securities laws. This forward-looking information includes, but is not limited to, statements with respect to management's expectations regarding the future growth, results of operations, performance and business prospects of the Corporation. This forward-looking information relates to, among other things, our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimations and intentions, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions. Statements with the words "could", "expect", "may", "will", "anticipate", "assume", "intend", "plan", "believes", "estimates", "guidance", "foresee", "continue" and similar expressions are intended to identify statements containing forward-looking information, although not all forward-looking statements include such words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forwardlooking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, but are not limited to the risk factors disclosed in the Annual Information Form for the year ended March 31, 2020 available on SEDAR.

In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such assumptions include, but are not limited to, the following: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth effectively; the absence of material adverse changes in our industry or the global economy; trends in our industry and markets; the absence of any changes in law, administrative policy or regulatory requirements applicable to our business, including any change to our licences with the CRTC; minimal changes to the distribution of the pay audio services by Pay-TV providers in light of recent CRTC policy decisions; our ability to manage risks related to international expansion; our ability to maintain good business relationships with our clients, agents and partners; our ability to expand our sales and distribution infrastructure and our marketing; our ability to develop products and technologies that keep pace with the continuing changes in technology, evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to protect our technology and intellectual property rights; our ability to manage and integrate acquisitions; our ability to retain key personnel; and our ability to raise sufficient debt or equity financing to support our business growth. Accordingly, prospective purchasers are cautioned not to place undue reliance on such statements. All of the forward-looking information in this MD&A is qualified by these cautionary statements. Statements containing forward-looking information contained herein are made only as of the date of this MD&A. The Corporation expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumption underlying them, whether as a result of new information, future events or otherwise, except as required by law.

IFRS and Non-IFRS Financial Measures

The annual consolidated financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and are stated in Canadian dollars.

The Corporation believes that Adjusted EBITDA and Adjusted EBITDA margin are important measures when analyzing its operating profitability without being influenced by financing decisions, non-cash items and income taxes strategies. Comparison with peers is also easier as companies rarely have the same capital and financing structure. The Corporation believes that Adjusted Net income and Adjusted Net income per share are important measures as it demonstrates its core bottom-line profitability. The Corporation believes that Adjusted Free cash flow is an important measure when assessing the amount of cash generated after accounting for capital expenditures and non-core charges. It demonstrates cash available to make business acquisitions, pay dividend and reduce debt. The Corporation believes that Net debt, Net debt to Adjusted EBITDA and Pro Forma Adjusted EBITDA are important measures when analyzing the significance of debt on the Corporation's statement of financial position. Each of these non-IFRS financial measures is not an earnings or cash flow measure recognized by International Financial Reporting Standards (IFRS) and does not have a standardized meaning prescribed by IFRS. Our method of calculating such financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.

Please refer to the Corporation's Management Discussion and Analysis for the year ended March 31, 2020, available on SEDAR at www.sedar.com for the definition of all non-IFRS financial measures and additional IFRS measures and, when applicable, a clear quantitative reconciliation from the non-IFRS financial measures to the most directly comparable measure calculated in accordance with IFRS.

WHO WE ARE

LEADING DISTRIBUTOR OF AUDIO AND VIDEO MUSIC BRANDS IN THE WORLD

• O Over-the-top streaming services SVOD and FAST channels
• Top ranking Mobile apps downloaded over 150 M times
• Exay 4 HK Ultra HD, short-form music video, long-form concerts & shows, and specialty audio TV channels
• o In-store commercial music, digital signage and Al driven customer experience solutions
• +100 radio stations across Canada
• O On-board entertainment systems in planes, trains and cars

WHO WE ARE

LEADING DISTRIBUTOR OF AUDIO AND VIDEO MUSIC BRANDS IN THE WORLD

BROADCAST & STREAMING

F20 REVENUES: \$105.3 M

• O OTT streaming services: SVOD and FAST channels
• o Top ranking apps in Karaoke, Piano game,
  Piano Learning and Concert streaming with 160M downloads
• o 4K Ultra HD, short-form music video, long-form concerts & shows, and specialty audio TV channels
• On-board entertainment systems in planes, trains and cars

COMMERCIAL SERVICES

F20 REVENUES: \$49.2 M

• o In-store commercial music
• Leading digital signage provider
• O Al driven customer experience solutions

RADIO

F20 REVENUES: \$154.5 M

• $\circ$ +100 radio stations across Canada
• Top ranking radio stations in major Canadian cities

Key Growth Opportunities

THE PIVOT IS REAL F20 REVENUES: \$105.3 M

• Pivoted product offerings to become the leading music distributor in audio and video channels, SVODs, Apps and FAST channels
• O Best in class asset management, programming, AI and delivery technology allows the company to scale on all platforms
• $\circ$ The transformation and expansion of Stingray's Broadcast and Streaming division support strong organic growth in the US and abroad for years to come

STREAMING SUBSCRIPTIONS - SVOD & APPS

• Year-over-year growth of 31.4%
• O Revenues up 13.28% over Q3F20
• o Full year run rate approaching \$50 M in revenues
• $\circ$ Retention rates on par with industry and improving providing net overall gains in subs
• o New markets and distribution platforms to continue to be deployed over the next year

Streaming subscriptions - SVOD & Apps

• O Launches in Q3 with Amazon Italy, Spain and more
• All platforms growing month over month

Streaming subscriptions - SVOD & Apps

• O Launched new Qello Concerts app across all major platforms
• Piano Academy now reaching \$2 M in annual run rate sales
• Expect to double profitable user acquisition campaigns and major partnerships with Festivals and Artists
• O Potential acquisitions to complete Stingray's mobile app suite of products

Leading music provider for Connected TVs and OTT services

• o Penetrated the connected TV market by distributing channels over Free, Ad-Supported Streaming Television [FAST] channels on Over-The-Top [OTT]
• O Across Canada, the United States, Europe, and Latin America reaching 100s of millions of engaged TV viewers

BROADCAST & STREAMING CAPTURING THE GROWTH OF CONNECTED TV AND OTT FAST CHANNELS

• OTT channels monetized through advertising
• Adoption rate and roll out continue
• ⊙ Recent launches include Samsung EU, MX player US, India, Vizio, Peacock and more
• $\circ$ Stingray outperforms with Naturescape and Audio channels
• · Significantly improving RPH month-overmonth. December RPH reached \$0.26 (Naturescape)

The Connected TV Ad Spending US market

US Connected TV Ad Spending, 2019-2023

Source: eMarketer, October 2019: US Connected TV Ad Spending, 2019-2023

Note: digital advertising that appears on connected TV (CTV) devices; includes display ads that appear on home screens and in-stream video ads that appear on CTVs from platforms like Hulu, Roku and YouTube, excludes network-sold inventory from traditional linear TV and addressable TV advertising.

COMMERCIAL SERVICES

STINGRAY BUSINESS

F20 REVENUES: \$49.2 M

US market - all growth

• O Concluded a deal to provide in-store media solutions for ClubCom, a division of Zoom Media in Canada and the US for 4-5K locations
• O Partnership with Space Factory Media helps will fasttrack US entry
• All organic growth with opening of US market with $\bigcirc$ potential tuck-in acquisitions

Background music and custom audio systems

Digital signage

Consumer research Al

• Canada's #1 provider of licensed background music and digital display for businesses
• Retail audio advertising network in development

COMMERCIAL SERVICES Al-Driven insights

Chatter, a Stingray company, uses Al-driven SMS conversations to provide a better feedback experience for retailers of all types.

O Rolling out Nike and Chanel locations in the US

RADIO DIVISION

STINGRAY RADIO

F20 REVENUES: \$154.5 M

• O Digital sales up 100% year-over-year
• O Recovery pace in line with reopening of local businesses and national campaigns confirming resilience of radio
• O Expecting radio to recover fully in F22

FULL PIVOT TO STREAMING SERVICES

% Share of revenue F21 (projected)

FINANCIAL RESULTS

QUARTERLY RESULTS FOR Q3 ENDED DECEMBER 31, 2020(1)

▼ 10.8% from O3

Adjusted Net income

Or \$0.29 per share

Adjusted free cash flow \$19.6 M ▼ 6.6% from Q3 2020

▲ 9.5% from Q3 2020

Or \$0.19 per share

Cash flow from operating activities \$16.3 M ▼ 43.4% from Q3 2020

$\mathbf{2}$

5

3RD QUARTER BUSINESS AND SUBSEQUENT HIGHLIGHTS

FEBRUARY	Declared a dividend of \$0.075 per share
-----------------	------------------------------------------	--	--	--

• DECEMBER Concluded a deal to provide in-store media solutions for ClubCom, a division of Zoom Media in Canada and the US for 4-5K locations
• $3$ DECEMBER Announced the sale of the securities it held in the capital stock of San Francisco based AppDirect Inc. for cash consideration of US\$14.6 million
• 4 NOVEMBER Launched premium SVOD channels with multiple partners including Amazon Italy and Spain
• NOVEMBER Launched of free, ad-supported TV channels with eleven major OTT providers

OCTOBER

Announced that it had successfully completed the increase and extension of its existing credit facilities, providing additional liquidity for operations and M&A activities with improved terms and conditions. FINANCIAL RESULTS

FISCAL 2020 YEAR ENDING MARCH 31, 2020⁽¹⁾

▲ 44.2% from Fiscal 2019

Adjusted Net income \$55.9 M

Or \$0.74 per share

Adjusted free cash flow \$78.4 M

▲ 101.8% from Fiscal 2019

Adjusted EBITDA

\$118.1 M

▲ 63.5% from Fiscal 2019

Net income

\$14.0 M

Or \$0.18 per share

Cash flow from operating activities

\$88.1 M

▲ 97.2% from Fiscal 2019

STRONG GROWTH PROFILE

O Operating leverage provided by acquisitions and scale of operations O Business model leading to high adjusted EBITDA margins

SIGNIFICANT INCREASE IN CASH FLOWS

Cash flows from operating activities

Adjusted free cash flows(1)

SIGNIFICANT INCREASE IN CASH FLOWS

Cash flows from operating activities per share (diluted)

Adjusted free cash flows per share (diluted)⁽¹⁾

Note 1: Refer to "IFRS and Non-IFRS measures" and "Supplemental information on Non-IFRS measures" in the Annual and Quarterly reports.

FINANCIAL RESULTS

CASH FLOW OUTLOOK

Adjusted Free Cash Flow $(in$ millions of $$)$

Pro Forma Adjusted EBITDA		120.9
Less:
Interest (LTM)	S	[16.7]
Income tax (LTM)		(4.4)
Lease payments (LTM)		(5.1)
Capex (LTM)		(14.1)
Pro Forma Adjusted Free Cash Flow	c	80.6
Outstanding shares as at Jan 31, 2021	72,680,403

Pro Forma Adjusted Free Cash Flow per share \$ $1.11$

REDUCED NET DEBT TO ADJUSTED EBITDA RATIO

Net Debt to Adjusted EBITDA (in millions of \$)

Net Debt as of December 31, 2020	320.2
Pro Forma Adjusted EBITDA	120.9
Net Debt to Adjusted EBITDA	2.65

FINANCIAL RESULTS

CAPITAL MARKETS INFORMATION

Share Price (January 31, 2021)	S7.64
Shares Outstanding (January 31, 2021)
Subordinate Voting Shares [SVS] Variable Subordinate Voting Shares (VSVS) Multiple Voting Shares (MVS)	54.2M 0.5M 17.9M
Total Shares	72.6M
Market Capitalization	\$555.3M
Add: Net Debt (December 31, 2020)	320.2M

COMPANY GOALS

1 Pursue a strategic and disciplined approach to our M&A strategy by focusing on three [3] vectors:

• SVOD / APPs
• Ad base products
• Business services (Music, Digital Display and Insights)
• 2 Develop ad base product offerings to enter new markets and access new platforms. Free Adsupported Streaming TV channels (FAST) and traditional channels (MV and Audio channels)
• 3 Continue to grow in the SVOD space by buying or licensing content and increasing our reach across platforms and markets.
• 4 Continue to develop best-in-class video apps, web-based solutions, and mobile app.
• 5 Expand the reach of our business services through an international expansion strategy and insights offering.

WHO WE ARE Product Overview

Stingray Karaoke

Stingray Music

CONCERTS	MUSIC	RADIO	APPS
& SHOWS	VIDEOS	boom 97.3 Toronto	The Karaoke Channel
Stingray iConcerts	Stingray Hits!	Hot 89.9 Ottawa	Kid's Karaoke
Stingray Classica	Stingray Vibe	VOCM St. John's	Singing Machine
Stingray DJAZZ	Stingray Loud	Q104 Halifax	Stingray Karaoke
Qello Concerts by Stingray	Stingray Country	K97 Edmonton	Stingray Music
Stingray NatureScape 4K	Stingray Retro	Z95.3 Vancouver	Stingray Qello
Stingray Festival 4K	Stingray Juicebox	And 95 more stations	Yokee Sing
	Stingray cmusic	across Canada!	Yokee Guitar
	PalmarèsADISQ par Stingray		Yokee Piano
	Stingray Now 4K		The Voice Karaoke
			Piano Academy
	Stingray Hits 4K		Sing! by Stingray

STINGRAY

APPS

BUSINESS SERVICES

Stingray Business Background Music Digital Signage Chatter Research Al

STINGRAY

Unleashing the power of music