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

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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