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Year inReview Another Excellent Year
Solid 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 systems2
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
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Net Revenue up 5.5%
A “Harry Potter”year
Growth well above North American average despite decline in average book prices 700
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EBITDA up 12.6%
Best-in-class operating metrics
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Net Income up 76.0%
Improved operating earnings
Lower interest and amortization costs
$8.8 mm non-cash tax recovery
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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
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Q1 Fiscal 2009 Results Continue Strong Trend …
Revenue up 3.1%Net loss cut in half$57.1 mm cash on handLaunched share repurchase program
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Financial SummarySolid balance sheet
Excellent momentum
No shortage of ideas…
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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
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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 2010
Drive Growth in Core Business
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Award-winning design
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Award-winning design
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Award-winning design
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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
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our online place for booklovers to meet, recommend reading, create book clubs, join shared interest groups and be inspired on their next read
150,000 members and growing daily
Drives “no cost” natural search
Drives Growth of online
Interactive Digital Community…
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Increasingly Rich Bookstore Experience
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Increasingly Rich Bookstore Experience
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Expand Paper Business
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Expand Gift Business
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Full kids toy shops in all new superstoresRollout into existing stores over next two years
Expand Kids Business
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Paced Expansion of Indigospirit
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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 Indigo stores before the holidays
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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
Our target: Best-in-class operating margins of 8.5% - 9.0% of sales
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Achieve Best-in-Class Employee Engagement
Annual measurement of employee engagement using Hewitt survey
Four of eight areas in the business achieved best-in-class levels this past year; balance trending well with work still to be done
Priority reinforced in Executive Bonus Program
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$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
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