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!ndigo2011 AGM
Agenda
Call to order
Audited financial statements
Election of directors
Appointment of auditors
Formal meeting adjournment
Presentation by Heather Reisman
Net Revenue up 5%.
Kobo revenue increased from
$0.8 million to $90.0 million.
Very solid growth in our general
merchandise business.
FY11 Revenue
700
750
800
850
900
950
1,000
FY07 FY08 FY09 FY10 FY11
millio
ns
Consolidated revenues surpassed the billion dollar mark
FY11 EBITDA
EBITDA decline from $73.0 million
to $26.2 million driven by:
One less operating week in FY11;
Significant operating investment
made to grow Kobo;
Operating investments in product
design and merchant teams to
drive general merchandise
business;
Declining revenue and margin in
core book business.
0
10
20
30
40
50
60
70
80
FY 07 FY 08 FY 09 FY 10 FY11
millio
ns
Net earnings decline from
$34.9 million to $11.3 million.
FY11 Net Earnings
0
10
20
30
40
50
60
FY07 FY08 FY09 FY10 FY11
millio
ns
Solid balance sheet with no long-term debt.
Critical steps taken to:
Leverage global growth opportunity in eReading; and
Transform Indigo with and for our customers.
FY11 Summary
Kobo
Kobo is one of 3 powerhouses in the market Time Magazine - January 2011
A Global Leader in eReading
World class book store – 2.4 million titles
#1 eReading app on iPad and iPhone worldwide
Top selling affordable eReader
4 million readers in 100+ countries
A Global Leader in eReading
#1 share in Canada, Australia & New Zealand, #3 in the US
Tablet Partners: Samsung, RIM, Acer, Asus, HTC…
“Reading Life”: first ever socially-integrated eReading platform
$80 million in investment from Indigo, Cheung Kong Holdings, Fidelity…
Kobo eReader Touch changes the game
Expanding relationships with leading booksellers around the world
Expanding distribution partnerships with leading brands (Walmart, Best Buy, Sears, Kmart, Target…)
Our Goal: No. 1 competitor to Kindle worldwide within 3 Years
Launching this summer in French, Spanish, German, Italian with Asia to follow
Kobo to be preloaded on over 20 million devices globally in 2011
Global book publishing market exceeds US$90 billion
Our Goal: No. 1 competitor to Kindle worldwide within 3 Years
Aggressive plan in place for FY12
Significant growth in customer base
Significant growth in top line revenues
Margin improvement with move to agency
Increased share of global eBook market
The KOBO slidesKobo
A Transformational Agenda
!ndigo 3.0
Key Statistics
163 million store and online visits in FY11
33 million transactions in FY11
2 million loyalty members
66% of transactions are loyalty transactions
62% NPS
Market position:
Indigo 3.0 - a r*etail experience
The authority on books – digital and physical
The destination for kids Edutainment
The destination for inspired home accessories
The destination for gifts to treasure
Reshape assortment to leverage consumer trust, drive top line growth, and margin expansion
Reshape online and in-store experience
Engage consumers in the Indigo transformation agenda
Re-engineer supply chain to support expanded general merchandise strategy & drive productivity
The Indigo Transformation Agenda
Established product design and development capabilities to build Indigo proprietary gift and lifestyle merchandise
Launch Indigo Enrich Your LifeAugust 2011
Build general merchandise to approx. 40% of mix over next 18 months with meaningful amount of proprietary product
Expand Kobo Central in store
Drive top line growth & margin expansion
Finalize expansion of IndigoKids, both in-store and online, into a true leader for kids edutainment products; birthday and holiday gifts
Currently have 53 full-line IndigoKids
Additional 20 full-line rollouts scheduled for fiscal 2012 and 2013
Note: Strongest performing stores have a full IndigoKids experience
Drive top line growth & margin expansion
Reshape online and in-store experience
Expand “known” consumers from 1 million to 3 million through plum program - launched April 2011
Involve consumers in direct dialogue/innovation on new product introductions
Engage consumers in Indigo transformation
Fiscal 2011
Opened new online warehouse capable of handling toys and general merchandise product
Fiscal 2012
Implementing changes to our retail warehouse to support our evolving product mix, to improve efficiency and reduce operating costs
Established a major strategic thrust to look at end-to-end productivity
Drive productivity improvement
More than $10.5 million committed through Indigo Love of Reading Foundation
415 schools revitalized through the Literacy Fund and Adopt a School
The Goal Remains...Cross-Canada provincial funding!
Indigo Love of Reading Foundation
“You have just changed the lives of children that we serve everyday…”
Principal Jill Maar, Armadale Public School - 2011