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Another Excellent YearSolid top line growth
Significantly improved operating margins
Strong cash flow
Kids business on fire
Launch of online “community” site
Four new Indigospirit stores opened
Stable & secure systems
Notable Achievements#1 National Retailer in Canada(Kubas Consultants)
Best Retail Store Design (ICSC Maple Leaf Award)
$1.5 million commitment toschool literacy through Indigo Love of Reading Foundation
Net Revenue up 5.5%
A “Harry Potter”year
Growth well above North American average despite decline in average book prices 700
725750775800825850875900925950975
FY04 FY05 FY06 FY07 FY08
$ m
illion
s
EBITDA up 12.6%
Best-in-class operating metrics
2530354045505560657075
FY04 FY05 FY06 FY07 FY08
$ m
illion
s
Net Income up 76.0%
Improved operating earnings
Lower interest and amortization costs
$8.8 mm non-cash tax recovery
-5.0
10.015.020.025.030.035.040.045.050.055.060.0
FY04 FY05 FY06 FY07 FY08
$ m
illion
s
Total debt reduced by $14.5 million
Repaid final $13 million term debt
Operating line of credit to cover seasonal working capital
Capital leases on select technology assets
0
20
40
60
80
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120
FY04 FY05 FY06 FY07 FY08
$ m
illion
s
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
16/06/2003 16/06/2004 16/06/2005 16/06/2006 16/06/2007
2005 2006 2007
Indigo Share Price (TSX:IDG)
!ndigo
TSX
20082004
Financial SummarySolid balance sheet
Excellent momentum
No shortage of ideas…
Our Strategic Focus
Drive growth in our core business
Simplify core processes and drive productivity improvement
Launch new concept
Achieve best-in-class employee engagement
Re-imagine the Chapters/Indigo Experience
Award-winning store designState-of-the-art customer kioskInteractive digital communityAn increasingly rich bookstore experience…but expanding business in kids, gifts and paper
10 new superstores in 2009 and 20104 Indigospirit stores in 2008
Drive Growth in Core Business
Award-winning design
Award-winning design
Award-winning design
Award-winning design
State-of-the-Art Customer Kiosk
New “iPhone-like”22 inch touch screens
Improved in-store search and find
Real-time information on hot books and topics in the media
Simplified purchase with slide card
our online place for booklovers to meet, recommend reading, create book clubs, join shared interest groups and be inspired on their next read
130,000 members and growing daily
Drives “no cost” natural search
Drives growth of online
Interactive Digital Community…
Increasingly Rich Bookstore Experience
Increasingly Rich Bookstore Experience
Expand Paper Business
Expand Gift Business
Full kids toy shops in all new superstoresRollout into existing stores over next two years
Expand Kids Business
Paced Expansion of Indigospirit
Good for you, good for the planet
Environmentally friendly selection of paper and gift; organic apothecary products for everyday use
Two new test stores opening before the holidays
Wholesale launch of paper products into the U.S and Indigo before the holidays
Simplify & Drive Productivity
Continuous improvement initiative
About thinking ‘end-to-end’
Three objectives:Enhance desired consumer experience
Improve quality of work life for employees
Drive out cost
Achieve Best-in-Class Employee Engagement
A continuous improvement initiative
Four of eight areas in the business achieved target this past year; balance trending well with work still to be done
Priority reinforced in Executive Bonus Program
$6.0 million contributed to date
“Writing on the Wall”documentary released fall 2007
Ontario provincial commitment of $120 million over 4 years to support school libraries