Management

Presentation

A Confidential Presentation

November 2018

Disclaimer

Forward-looking Information

This presentation, including, in particular, under the headings entitled “Stable, long-term growth”, “Key drivers of SSS growth”, “Roadmap to growth – Increase accessories sales”, “Roadmap to growth – Add stores in existing,

satellite and new markets”, “Attractive financial model results in strong cash flow conversion”, “National scale has economic benefits”, “Regional store density adds profitability and barrier to entry”, Select Financial Highlights and

Growth Targets” and “Investment Highlights”, contains forward-looking information and forward-looking statements which reflect the current view of management with respect to the Company’s objectives, plans, goals, strategies,

outlook, results of operations, financial and operating performance, prospects and opportunities. Wherever used, the words “may”, “will”, “anticipate”, “intend”, “estimate”, “expect”, “plan”, “believe” and similar expressions identify

forward-looking information and forward-looking statements. Forward-looking information and forward-looking statements should not be reads as guarantees of future events, performance or results, and will not necessarily be

accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the information in this presentation containing forward-looking information or forward-looking statements is

qualified by these cautionary statements.

Forward-looking information and forward-looking statements are based on information available to management at the time they are made, underlying estimates, opinions and assumptions made by management and

management’s current good faith belief with respect to future strategies, prospects, events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and

uncertainties include, but are not limited to, those described in the Company’s 2017 Annual Information Form (the “AIF”) filed on March 1, 2018. A copy of the AIF can be accessed under the Company’s profile on the System for

Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. Additional risks and uncertainties not presently known to the Company or that the Company currently believes to be less significant may also adversely

affect the Company.

The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and that should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual

strategies, prospects, events, performance and results may vary significantly from those expected. There can be no assurance that the actual strategies, prospects, results, performance, events or activities anticipated by the

Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Readers are urged to consider the risks, uncertainties and assumptions carefully in

evaluating the forward-looking information and forward-looking statements and are cautioned not to place undue reliance on such information and statements. The Company does not undertake to update any such forward-

looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

Non-IFRS Measures and Retail Industry Metrics

The Company prepares its financial statements in accordance with IFRS. In order to provide additional insight into the business, to provide investors with supplemental measures of its operating performance and to highlight

trends in its business that may not otherwise be apparent when relying solely on IFRS financial measures, the Company has also provided in this MD&A certain non-IFRS measures, including “Same Store Sales” or “SSS”,

“EBITDA”, “Operating EBITDA”, “Operating EBITDA Margin”, “Adjusted Net Income” and “Adjusted EPS” each as defined below. These measures are provided as additional information to complement IFRS measures by providing

further understanding of the Company’s results of operations from management’s perspective. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to

prepare annual operating budgets and forecasts and to determine components of management compensation. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS

measures in the evaluation of issuers.

Readers are cautioned that these non-IFRS measures are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similarly titled measures

presented by other publicly traded companies. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. See below for further details

concerning how the Company calculates these non-IFRS measures and for reconciliations to the most comparable IFRS measures.

2

Sleep Country

David Friesema Robert Masson Stewart Schaefer

Chief Executive OfficerChief Financial Officer

& Corporate Secretary

Chief Business Development

Officer

3

Investment Highlights

4

The Leading Specialty Mattress Retailer in Canada

Best-in-Class Retailer Driven by Superior Strategy and Execution

Clear Growth Strategy

Attractive Financial Model with Strong Cash Flow Conversion

Compelling Industry Fundamentals

Experienced and Committed Management Team

Industry Fundamentals

Stable – Canadian Market

5

Unit demand in Canada has grown at only 0.6% CAGR over the past 13 years and

0.9% CAGR since 2009. AUSP has driven most of the growth.

Necessity purchase not a fashion item; recurring demand driven by 10-12 year

replacement cycle, so even during an economic downturn sales are typically

deferred and not lost.

Consumer preferences evolving toward premium quality, larger mattresses given

growing health awareness and preference for high-quality sleep.

Price increases due to inflation are typically passed through to consumers.

Canada Mattress and Foundation Wholesale Sales (1)

525.9568.1

605.6 629.8 621.7

551.5 569.1 587.7623.8

661.5 665.2697.5

744.9 761.0

0

100

200

300

400

500

600

700

800

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$ CA

D (M

illio

ns)

Wholesale Gross Dollar Value

INCREASE 8.0% 6.6% 4.0% -1.3% -11.3% 3.2% 3.3% 6.1% 6.0% 0.6% 4.9% 6.8% 2.2%

2,518.9 2,672.7

2,781.9 2,915.5 2,916.9

2,540.7 2,652.5

2,762.7 2,822.9 2,885.9 2,894.2 2,822.4 2,878.2 2,720.4

0

500

1,000

1,500

2,000

2,500

3,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Uni

ts (T

hous

ands

)

Wholesale Units Shipped

INCREASE 6.1% 4.1% 4.8% 0.0% -12.9% 4.4% 4.2% 2.2% 2.2% 0.3% -2.5% 2.0% -5.5%

206.8 212.6 217.7 216 213.1 217.1 214.6 212.7 221 229.2 229.9247.1

258.8279.7

0

50

100

150

200

250

300

350

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Avg

Who

lesa

le S

ellin

g Pr

ice

($CA

D)

Wholesale Average Unit Price

INCREASE 2.8% 2.4% -0.8% -1.3% 1.9% -1.2% -0.9% 3.9% 3.7% 0.3% 7.5% 4.7% 8.1%

(1) Source: Based on survey of the 10 largest mattress manufacturers in Canada.

The Leading Specialty Mattress Retailer in Canada

6(1) Store count as of November 10, 2018

264 stores and 16 distribution centers across 9 provinces (1)

Has opened 126 stores since the beginning of 2007

Only specialty mattress retailer with a national and regionally diverse footprint

Estimated national market share of approx. 25%

BC

AB

SKMB

ONQC

NL

NB

PE

NS

43

34

67

108 1056

Sleep Country's National Footprint (# of stores)

LTM (C$ millions)

Sales $617.6

Operating EBITDA $105.6

Best-in-Class Retailer

Driven by Superior Strategy and Execution

7

“Best-in-Class” Retailer

Strong Brand Recognition

1

Unrivalled In-Store Customer

Experience

2

Highly Trained and Dedicated

Workforce with a Strong

Culture of Customer Service

4Superior Home Delivery

Experience and Ongoing

Customer Relationships

3

Differentiated Strategy has Delivered

Strong Results and Momentum

8

Sleep Country Quarterly Sales Growth (1)

1.3%

9.1%

11.1%

10.2% 10.5%

7.7%

13.4% 12.9%

11.7%12.2%

7.7%

9.6%

11.9%

7.5% 7.3%

9.3%

5.1%

4.4%

0.2%

5.5%

13.1%

14.7%

13.1%12.6%

10.6%

17.7%18.3%

17.1% 17.3%

12.5%

13.7%

15.8%

10.7% 10.1%

13.4%

8.9%

8.2%

4.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2014 2015 2016 2017 2018

Same Store Sales Growth Total Sales Growth

(1) Source: Company report. See ‘‘Non-IFRS Measures and Retail Industry Metrics”.

Roadmap to Growth – SSS Growth

9

Increase Traffic

Increased marketing investment

Expand messaging

Increase market share

Increase Conversion of

Shoppers to Buyers

Continued focus on hiring the best people

Additional training initiatives

Higher AUSP Continued shift to higher quality mattresses

Larger sizes are increasing in popularity

Expand Accessory

Sales

Expand and improve product lines

Additional marketing messaging

Enhanced training

Launch of eCommerce channel in May 2017

More details on page 11

Enhanced Store Design

Contemporary design creates bright and welcoming atmosphere

Greater emphasis on accessory displays

More details on page 14

Roadmap to Growth – Expand Accessory Sales

10

$53

$124

2012 2018

Bedframes

Pillows

Mattress pads

Key Accessories Sleep Country Accessories Revenue (1)

(C$ millions)

Sheets

Duvets

Headboards and

Footboards

Opportunity to capture market share in an estimated $0.8 to $1 Billion

highly fragmented yet addressable market in Canada

16.0% CAGR

(1) Source: Company Report

eCommerce with Mattress In-A-Box and Accessories

11

Drive NEW TRAFFIC by

targeting a different

demographic.

Provide our customers with a

SEEMLESS EXPERIENCE

across both channels. Continue to DRIVE TRAFFIC to

our stores.

The creation of a new

REVENUE channel.

Bloom, our exclusive collection of Mattress In-A-Box

that ships for FREE right to your door…

12

$995 $795

$595 $395

Online Accessory Expansion

Testing new accessory product categories online before rolling them out to our stores

13

Throws Robes

Snap Beds Throws

Roadmap to Growth – Enhanced Store Design

14

As of November 10th, 140 stores representing 53% of our total stores are in our enhanced store design, which continue to

achieve higher SSS growth relative to our legacy stores.

Roadmap to Growth – Add New Stores

15

10

13

5

13

11

12

17

2012 2013 2014 2015 2016 2017 2018*

Store Growth

Significant white space is available given our low store density

Target to open at least 17 stores in 2018 and 8 to 12 new stores per year thereafter

Modest net new store investment of approximately $400,000 comprising of capex and working capital investment

Typically, new in-fill and satellite stores are cash flow positive within 6 and 12 months, respectively

Average

11.6

* Full year guidance 2018.

Attractive Financial Model – Recent Results

16

Sales momentum driving increasing EBITDA

Strong historical sales growth through new store openings and same store sales growth

$332.6 $353.9

$396.1

$456.2

$523.8

$588.0 $617.6

$-

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 2018 LTM

Total Sales

38.4 39.4

50.6

69.1

85.0

99.8

105.6

11.5%11.1%

12.8%

15.2%

16.2%

17.0% 17.1%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

30

40

50

60

70

80

90

100

110

2012 2013 2014 2015 2016 2017 2018 LTM

Operating EBITDA

EBITDA EBITDA Margin

Attractive Financial Model – Low Capital Expenditure Model

17

Maintenance capital expenditures have averaged 1% of revenue from 2012 to 2018

Sleep Country Maintenance and Growth Capital Expenditures (% of sales) (1)

1.3% 1.2% 0.5% 0.8% 1.0% 0.8% 1.1%

1.5% 1.9%

1.3%

2.4% 2.5%

4.1% 2.9%

2.9% 3.1%

1.8%

3.2% 3.5%

4.9%

3.9%

2012 2013 2014 2015 2016 2017 Q3 2018

Maintenance Growth

(1) Source: Company Report

Attractive Financial Model – Strong New Store Economics

18(1) Based on 2017 gross profit margin after taking in to account 3rd party finance charges and mattress recycling cost.

Stores Generate Cash on Cash Payback < 1.5 Years

Representative New Store Investment

($ in thousands)

Average

Investment

Buildout and Equipping Cost Floor

Sample Inventory

$430

50

Less: Tenant Reimbursement

480

(80)

Cash Requirement, Net $400

New Store Results

($ in thousands) Year 1

Sales $1,200 - $1,500

Store 4-Wall Profitability(1)

% of Sales

$334 - $417

27.80%

Annual Cash on Cash Return 83% -104%

Store 4-wall profitability drives improving leverage over market-level costs as store penetration increases

Attractive Financial Model – Conservative Leverage

19(1) Based on 2017 gross profit margin after taking in to account 3rd party finance charges and mattress recycling cost.

Capital structure provides financial flexibility to grow the business, while providing returns to shareholders

(C$ millions) As at September 30, 2018

Revolving Credit Facility $102.3

Finance Leases $3.3

Total Long Term Debt $105.6

Less: Cash on Hand ($32.9)

Net Debt $72.7

Net Debt / LTM Operating EBITDA 0.7x

Outstanding Lease Liabilities $211.9

Net Debt / EBITDAR 2.0x

Attractive Financial Model – Strong Free Cash Flow

20(1) Based on last 12 months ended September 30, 2018.

(2) Pro-forma based on year to date September 30, 2018.

(3) Pro-forma based on 26.8% tax rate.

Negative working capital model, quick ROI on new stores and low leverage provides flexibility for

investments and return to shareholders

As at September 30, 2018(C$ millions)

Operating EBITDA(1) 105.6

CAPEX(1) 25.0

Interest(2) 4.1

Taxes(3) 23.4

Free Cash Flow available for dividends 53.1

Number of shares outstanding 37.06 million

Dividend - $0.185 per quarter 27.4

Payout Ratio 51.69%

Select Financial Highlights(1)

21(1) See “Non-IFRS Measures and Retail Industry Metrics”.

(2) Excludes SG&A expenses added back in the reconciliation of EBITDA to Operating EBITDA.

(C$ million unless otherwise stated) 2016 2017 Q3 2017 Q3 2018

Revenue $523.8 $588.0 $176.2 $183.9

Same Store Sales Growth 10.0% 8.8% 7.3% 0.2%

Net New Stores 11 12 2 4

Gross profit $151.4 $175.0 $58.4 $62.2

Gross Margin 28.9% 29.8% 33.2% 33.8%

General & Administration Expenses(2) $66.4 $75.1 $22.6 $24.5

% of Sales 12.7% 12.8% 12.8% 13.3%

Operating EBITDA $85.0 $99.9 $35.8 $37.7

Operating EBITDA Margin 16.2% 17.0% 20.3% 20.5%

Adjusted Net Income $51.1 $61.9 $23.6 $24.7

Adjusted Earning per Share 1.36 1.65 0.63 0.67

Proven Management Team committed to growing the business

and shareholder value

22

MemberYears at

Sleep Country

Relevant

ExperienceBiography

Dave Friesema

Chief Executive Officer

20+ 20+ Held numerous senior positions at Sleep Country including Head of Sales, General Manager and Chief

Operating Officer

Chairman of the Better Sleep Council Canada

Helped establish and manage mattress retail organizations in the United States

Robert Masson

Chief Financial Officer and Corporate

Secretary

5 20+ Chief Financial Officer of Second Cup from 2009 to 2013

Prior to joining Sleep Country, Robert had extensive management experience with several other public

and private companies including, IBM Canada, Manchuwok, Ernst & Young, Deloitte & Touche and

Sappi

Stewart Schaefer

President, Dormez-vous?

Chief Business Development Officer

12 20+ Founded Dormez-vous? in 1994; grew the business to five stores before being acquired by Sleep

Country in 2006

In 1992, co-founded Heritage Classic Beds, a distributor of metal beds

Commodity Broker in Chicago from 1986 to 1992, later returning to Montreal to work at Dean Witter

Reynolds and Refco Futures

Dave Howcroft

Chief Sales Officer

20+ 20+ Created programs to consistently build, develop and motivate a first-class sales team

Instrumental in developing and implementing various sales workshops, training programs and sales

processes

Sieg Will

Senior Vice President, Operations

17 20+ Instrumental in development and implementation of standard operating policies and procedures across

organization

Held senior positions with Canadian Tire and PepsiCo in the sales, operations and account management

areas

Eric Solomon

Senior Vice President, Merchandising and

Marketing

20+ 20+ Instrumental in growing the business by increasing "top-of-mind" brand awareness

Provides oversight to the marketing department

Stephen Gunn

Founder & Co-Chair

20+ 20+ Co-founded Sleep Country in 1994

Co-founded and was President of Kenrick Capital, a private equity firm

Management Consultant at McKinsey and Company from 1981 to 1987

Serves on the Board of Directors of Dollarama, Golfsmith International, Cara and Mastermind Toys

Christine Magee

Founder & Co-Chair

20+ 20+ Co-founded Sleep Country in 1994

Senior Manager of Corporate and Commercial Lending with National Bank from 1985 to 1994

Serves on the Board of Directors of Sirius XM Canada, Trillium Health Partners and the Advisory Board

of the Ivey School of Business

Investment Highlights

23

Compelling Industry

Fundamentals

North American mattress and foundation industry is characterized by stable, long-term growth and a high degree of resiliency to economic swings

Industry demand driven by essential nature of product and replacement cycle of 10-12 years

Shift in consumer preference towards larger size mattresses and premium quality products

Consumers have shifted preference towards specialty mattress retailers due to big-ticket nature of mattress purchase and lack of consumer product knowledge

Low vulnerability to online competition and showrooming due to highly tactile purchase decision,

The Leading Specialty

Mattress Retailer in

Canada

Only specialty mattress retailer in Canada with a national and regionally diverse footprint

National footprint of 259 stores and 16 distribution centres across 9 provinces

Leading specialty mattress retailer with an estimated national market share of 25%

Best-in-Class Retailer

Driven by Superior

Strategy and Execution

Largest share of customer visits across Canada driven by “top-of-mind” unaided brand awareness and 20-year advertising investment

Unrivalled in-store customer experience drives high conversion of sales, repeat business and superior sales per associate metrics

Superior home delivery experience and ongoing customer relationships drives high customer satisfaction, repeat sales and word-of-mouth advertising

Highly trained and dedicated workforce with a strong culture of customer service

Convenient and highly visible locations

Clear Growth Strategy

Strong same store sales growth(1) potential driven by increased mattress and accessories sales growth and continued implementation of enhanced store design

Opportunity to open 8-12 net new stores per year in existing, satellite and new markets

Operating leverage on sales growth through highly scalable centralized support infrastructure

Selectively consider strategic acquisitions that are accretive and enhance market opportunities

Attractive Financial

Model with Strong

Cash Flow Conversion

National scale creates economic advantages

Regional scale optimizes economics on a per-store basis

Negative working capital operating model facilitated by "just in time" inventory relationship with suppliers, funds growth

Low capital expenditure requirements due to asset-light business model (~1.0% maintenance capex requirements)

Compelling new store economics with cash payback of less than 1.5 years

Experienced and

Committed

Management Team

Highly experienced management team with proven track record

On average 15+ years of experience with Sleep Country and 20+ years of relevant industry experience

Proven track record of success as a public company

Co-founders remain committed to the business and its long-term success

Description of Non-IFRS Measures and Retail Industry Matrix

24

This presentation makes reference to certain non-IFRS measures including:

“AUSP” is defined as the average unit selling price of a mattress and foundation set.

“EBITDA” is defined as net earnings (loss) from continuing operations before: (i) net interest expense and other financing charges; (ii) income taxes; (iii) depreciation of property, plant and

equipment; and (iv) amortization of other assets.

“Conversion” is defined as the number of customers who entered a store and made a purchase divided by the total number of customers who entered the store (expressed as a

percentage).

“Operating EBITDA” is defined as EBITDA adjusted for: (i) reduction in management bonuses; (ii) reduction in management compensation; (iii) certain non-recurring items (shareholder

reorganization, professional fees and customer deposit breakages and other provision); and (iv) share based compensation.

“Same Store Sales” or “SSS” is a non-IFRS measure used in the retail industry to compare sales derived from established stores over a certain period compared to the same period in the

prior year. SSS helps to explain what portion of revenue growth can be attributed to growth in established stores and what portion can be attributed to the opening of the stores. SCC

calculates SSS as the percentage increase or decrease in sales of stores opened for at least 12 complete months relative to the same period in the prior year.

“Adjusted Net Income from Continuing Operations” is used by SCC to assess its operating performance. Adjusted net income from continuing operations is defined as net income (loss)

from continuing operations adjusted for:

• share-based compensation.

“Adjusted EPS” is defined as adjusted net income from continuing operations attributable to the common shareholders of the Company divided by weighted average number of shares

issued and outstanding during the period.

These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similarly titled

measures presented by other publicly traded companies. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information

reported under IFRS. For further details concerning how the Company calculates these non-IFRS measures and for reconciliations to the most comparable IFRS measures, please see the

Company's most recent management's discussion and analysis of financial condition and results of operation filed with Canadian securities regulatory authorities and available on SEDAR at

www.sedar.com.

Thank you

Q&A