https://www.youtube.com/watch?v=uVgrsJ4d7sA

WoW !!

Yum China Oct’2022 Analyst Day

h c r a e s e

V

u l a

Q e

R t s ue

Guess where is this shown

h c r a e s e

V

u l a

Q e

R t s ue

WoW Flow PART I

PART II

▪ History & Evolution ▪ Menu Innovation

▪ Formats

▪ Advisory Board

▪ Team / Organization / Culture

R t s ue

▪ Kitchen /Logistics / Procurement

▪ Technology / Operations ▪ Marketing & Branding ▪ Corporate Culture

▪ WoW Brands

h c r a e s e

▪ Investment Checklist, Understanding PE

V

u l a

Q e

▪ Capital Raise History

▪ Business Plan, Estimates ▪ DD key takeaways ▪ Understanding IRR

WoW Route… Credit Where Due – ‘VQ Edge’ Chirag (QSR Tracking edge)

Vishal

Leading Discussions with CFO on Key Assumption, Difficult Questions, Industry History

h c r a e s e

All Data structures / modelling, Notes Capture, Fillings scan & Presentation making

WoW was recommended by Sachin Bhartiya, LightHouse | Ashwin Chadda | Mohit Dewan, Hero FO | Sanjeev, TPG • • • • • • • • •

R t s ue

10th Sep’22 : Elara Conference WoW presentation by Sagar Daryani 11th Sep’22 : Met Sagar, casual meeting to hear on Capital raise plans and business overview 25th Nov’22 : Sagar visit to VQ Office, 2hour business plan overview Kunal sourced key data blocks : Business Plan, DD Report, Unit Economics, City wise Data, Capital Raise data, Key Fillings 6th Dec’22 : WoW Delhi Factory visit + Meeting [ R&D head, FMCG CEO, Co-Founder ] 7th Dec’22 : WoW Kolkata Corporate Office [ All 3 Founders + 2nd Level Leadership + Combi Store ] 10th Dec’22 : Updated & Additional Data 12th Dec.’22 : Discussion over Business plan, estimates, store rollout execution 13th Internal IC presentation over Industry & WoW Momo

V

u l a

Q e

EVOLUTION OF WOW MOMOS

h c r a e s e

V

u l a

Q e

R t s ue

VISION – WOW TRANSFORMATION

h c r a e s e

V

u l a

Q e

R t s ue

SUCCESSFUL MENU INTERVENTION

h c r a e s e

V

u l a

Q e

R t s ue

CONVERTED SNACK INTO MEAL

h c r a e s e

V

u l a

Q e

R t s ue

UNIT ECONOMICS _ DIFFERENET FORMATS

h c r a e s e

V

u l a

Q e

R t s ue

Format Video

h c r a e s e

V

u l a

Q e

R t s ue

CAP TABLE

h c r a e s e

Team / Organizations/t R Culture

V

e u l a

e u Q

GEARED UP FOR NEXT LEG OF EXPANSION

h c r a e s e

V

u l a

Q e

R t s ue

WOW MOMO’S FOUNDED 14 YEARS BACK…… ➢ WoW Momo’s started in 2008 by two founders Sagar Daryani & Binod Homagai who first met each other in college during their undergrad.

h c r a e s e

➢ With an initial amount of ₹30,000, they started the venture in 2008 at the age of 21. Wow! Momo began as a 6' by 6' kiosk in a Spencer’s , which was one of their initial stores

R t s ue

➢ Sagar looked after brand expansion, marketing and retail operations, Binod focused more on production and quality control.

u l a

Q e

➢ They were later joined by another Shah Miftaur Rahman in 2015, who took the responsibility of cost control and finance (Previously working with PWC) and

V

➢ Murali krishnan joined as the fourth Co-founder in 2018 who took charge of marketing, brand building and growth hackings. Source: Statista(IBIS World)

Founder – Sagar Daryani Sagar Daryani serves as CEO & Co-Founder of Wow! Momo’s. Having done his schooling from St. James School, Kolkata & Graduation from St. Xaviers Kolkata, Sagar Daryani & his college friend, Binod Homagai started Wow! Momo’s.

h c r a e s e

Sagar is an enthusiast who is highly passionate about brand building & Expansion. He aspires to have 2000 stores by FY27.

R t s ue

He is also Vice president of National Restaurant Association of India.

V

u l a

Q e

Under his leadership Wow Momo’s has won many awards like National Entrepreneurship Award 2016 from Ministry of Skills Development and Entrepreneurship, Govt of India & The Images Most Admired Indian origin Quick Service Restaurant chain of the year 2018. Recently WoW Momo’s won 3 awards at the Pepsi Images Food Service Awards 2022 in Mumbai. QSR Chain of the year award, Wow Chicken bags the most prominent launch of the year

3 Co-Founders Along with Sagar, Binod founded WoW Momo’s in 2008. Binod completed its Bachelor’s degree from St. Xavier’s, College Kolkata & focused on Business Administration and Management. Binod is more focused towards Product development & Quality control.

h c r a e s e

Miftaur joined WoW Momo’s in 2015 as Chief Financial Officer. Before joining WoW Miftaur was working with PWC for 4 years where he use to handle Risk Management, Controls Framework and business process reviews. Market penetration and Business development for the Governance Risks and Controls practice. He also worked with BDO for 2 years. Total experience is of 13 years.

V

u l a

Q e

R t s ue

Murali joined WoW Momo’s in 2019 as Chief Marketing Officer. Before joining WoW Murali was working with Lowe Lintas for 6 years where he use to handle Brand communication responsibility. He handled Amul Macho sporto, completely new category and fresh mining of minds. A comprehensive understanding of the leisure wear category has helped me with continuous consumer study and brand POV. Total experience of 17 years.

Lallapalooza Chef : Rajashekar Saladi Very passionate Ownership driven

h c r a e s e

V

u l a

Q e

R t s ue

;

After 12-18mnths of R&D achieved increasing shelf life of Momo’s to nearly ~12months (if frozen) 2nd order affect, WoW can have 2 centralized kitchen pan India vs every city one kitchen Brought freeze-dried technology to WoW

2nd Level Leadership – Noticeable QSR Experience

h c r a e s e

u l a

Q e

V Source: Statista(IBIS World)

R t s ue

BUILDING TEAM FOR FUTURE….. a. WoW has very strong second level team where team is focusing on key areas which will help company to grow.

h c r a e s e

b. Company has smartly built its teams by hiring most of the employees from Dominos & Devyani. Company has allocated its employees into different teams to achieve scale & efficiency.

R t s ue

c. Company has different team for different role like: ▪ ▪ ▪ ▪ ▪ ▪ ▪

Business development Marketing & Technology Audit Team Revival Team Delivery Team Review Mechanism Learning & Development

Source: Statista(IBIS World)

V

u l a

Q e

NATIONAL BUSINESS DEVELOPMENT TEAM a. Team is headed by Indranil Banerjee (5 Yrs with WoW) & under him 4 regional heads & under each regional head approx. 4 people (Suppliers). Around 17 people reports to Indranil.

h c r a e s e

b. Team focuses on expansion in existing cities & search for new stores in new cities. Now company will focus more on opening new stores in Tier II cities.

R t s ue

c. Suppliers of each region go to different location to look for new places for opening new store. d. Also look for places where competition is available or which sales is significantly higher. Company gets reports from Swiggy & Zomato to track this data. Company maintains database brand wise & format wise - in which city company will open new stores in next 3 years.

u l a

Q e

V

e. Company also use key words likes Top 10 search cities to open new stores. Tiger Global do survey Redsheer research for them f. Company also uses Data Sutra & now Geo IQ app to track where competition is available, where competition is opening stores. Source: Statista(IBIS World)

MARKETING & TECHNOLOGY TEAM a. Murali Krishnan (Co-founder) has joined WoW in July 2019 as Marketing officer & Technology head to improve tech integration of company. In May 22 company appointed Barnik Bardhan who will help Murali in Tech Integration.

h c r a e s e

b. For delivery currently company uses aggregators app like Swiggy & Zomato, but in future company plans to have its own Delivery App. Currently company introduced Bot WOW Eats App for delivery which tracks: WoW BOT FimPilot version Rider Acceptance time

FimPilot

(24*7 to resolve issues)

u l a

V Timely delivery

Source: Statista(IBIS World)

Q e

R t s ue

Quality of delivery

Read Review Training module based on experience

Customer reach & resolve

Response

Report Review

MARKETING & TECHNOLOGY TEAM Company introduced new way of tagging customers to track visibility of customers: In case of Lapse & lost company introduce customise combo plans as per customer requirement to get customer back.

Q e

Company focuses to make aware to unaware customer & to make purchase from aware customer.

u l a

V

Lapse & Lost customers: Company interacted with 17 lakh customers & conversion is around 18% (Intention to buy) Source: Statista(IBIS World)

t s ue

h Lapse c Loyalist r a (60-120 e (30-60 s days e days R order) order)

Lost (more than 120 days order)

LEARNING & DEVELOPMENT TEAM a. Company has appointed Rajesh for learning & development program. He has 19 years experience & joined WoW in June 18.

h c r a e s e

b. Company has detailed training programs for its employees which helps company to improve its efficiency. Both Online & Offline training has Pathasala app.

R t s ue

c. Company has Workbooks filed with life experience of employees which helps new employees to grow.

d. Each brand has different training period: i. WoW Momo – 3 days ii. WoW China – 1-1.5 days iii.WoW Chicken – 2 days

u l a

Q e

V

e. New Joinee – In first 30 days – company gives at least 60 hrs training. For each employee Company has complete roadmap related to growth. f. New Joinee starts with 10 + 2 with average salary of 12k. For bigger position company make sure employee should finish his graduation. WoW Chicken – better salaries (who has experience with KFC) Source: Statista(IBIS World)

DELIVERY TEAM a. During covid company took significant steps to improve delivery business. Pre covid company used to do 80000 order per month & now company is doing 8 lakh order per month. Steps taken by company:

h c r a e s e

▪ Step 1 - Packaging improvement – Heat retention, better looking. It helps to maintain temperature by 45 min.

R t s ue

▪ Step 2 – Taking consumer related details from aggregators – run campaigns for customers – run campaigns – lost cart users, abatement cart user, geographically wise, Algo based stacking, special combos for customers.

Q e

▪ Step 3 – Started giving free desserts to customers, Faster deliver KPT – WoW Momos – 4.5 min & Wow China – 8-9 min (12 min KPT is good number).

b. Take rate –

u l a

V

▪

Swiggy – Momos - 21% (it will reduce to 19%), China – 18% & Chicken – 15%

▪

Zomato – 15% for all brads

Source: Statista(IBIS World)

OTHER TEAMS a. Revival Team ▪ ▪

h c r a e s e

Team focuses on Under-performing stores or other store related issues & try to understand reason related to issues. Not only team will understand the issue, they need to resolve the issue also.

R t s ue

Team incentives dependent upon how many stores they revive

b. Review Mechanism ▪ ▪

u l a

Q e

Team focuses on improving segment wise unit economics across places. Eg: Pune was getting lot of complains related to delivery packaging. While reviewing company realised issue was with Pepsi & not in packaging. Now company deliver Pepsi wrapped with tissue paper.

Source: Statista(IBIS World)

V

R t s ue

Corporate Culture

Q e

V

u l a

h c r a e s e

Corporate Culture I ▪ Sagar Daryani : Scheduled meetings on 25th Nov’22 & 7th Dec’22 - Punctual Brought 8-10 varieties of Momo for team - All bought from Prabhadevi outlet, 500mtr away

h c r a e s e

▪ Murli Krishnan (Co-Founder) : Paid for all the food WoW Chicken at Acropolis, Kolkata

▪ Founder pay fixed in 2015, was to increase in FY20 Saw 37% cut in 2021 due to Covid Founders pay/Total Cost far lesser than peers. Speaks volumes towards investing in 2nd level Leadership, building for scalability FY23 Board reinstated pay to reasonable level

Q e

u l a

▪ Clear Related Party Disclosure

V

R t s ue

• Dinesh Homagai (Younger brother of Binod) is full time employee of WoW, in marketing • In 2015, Company took property on rent from Sagar’s Mom & Dad.

Corporate Culture II ▪ Additional ESOP Pool created All 2nd Level Key People : Chef Rajshekhar Saladi ; Indranil Banerjee ; Niloy Chakraborty ; Murali Krishnan

h c r a e s e

Deepesh ; Sunain ; Kaushik ; Ramj (Old Chef) ▪ Mithun Appaiah (FMCG CEO)

R t s ue

a. Mithun 12 crore ESOPs lapsed in Sumeru Foods. So, WoW has given ESOPs in Main Entity

b.WoW has also given him 5% stake in WoW Momos subsidiary (FMCG Business) , to be vested when FMCG revenue hits 400crs

V

u l a

Q e

▪ All Financing documents like DD, SHA are done by Khaitan & Co. for property agreements

WoW Cheer

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

R t Kitchen / Logistics Procurement s V

e u l a

e u Q

CENTRALISED KITCHEN REQUIREMENT FOR MOMO’S a. Earlier Company used to open centralised kitchen in every city – Semi-automated chilled momo’s were supplied to the store on the need basis – shelf life of the product was 2-3 days

h c r a e s e

b. Over last few months company has been successful to increase the shelf life of Momo’s to 12 months vs 2-3 days in past (Frozen technology vs Chilled Momo’s)

R t s ue

c. Currently frozen momo’s is supplied to all new store expansion in smaller tier towns and gradually Chilled momo’s in key cities will also be converted to frozen

V

u l a

Q e

d. Company is consolidating the kitchens – currently from 9 kitchen it plan to go to 4 kitchen in next 2 years time. They will have kitchens in Kolkata, Mumbai, Delhi & Telangana.

CENTRALISED KITCHEN REQUIREMENT FOR MOMO’S a. Company targets to expand Momo’s capacity to 25-30lacs/day vs current capacity of 8-10 lacs/day. Telangana facility will be state of art with capacity of 15lacs/day – total capex estimated is around 40Cr.

h c r a e s e

b. Delhi kitchen has total capacity of 4 lakh momos per day out of which Frozen momos capacity is 2 lakhs & balance 2 lakh momos are of QSR. Currently the company is producing 1 lakh momos per day of Frozen & QSR momos each.

R t s ue

Q e

c. Frozen momos has a fully automated machine but QSR momos have semi automated machines.

V

u l a

d. In Semi-automated machines – some machines are upgraded & momos are also prepared by machines. In some cases upgradation still pending & momos are prepared by employees. Upgradation of machines is dependent upon pricing of the product. High margin products are automated first

Delhi Factory Video

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

WOW CHINA & CHICKEN KITCHEN OUTSOURCED….. a. For China & Chicken business company outsourced kitchen requirement to 3rd Party (UV Foods).

h c r a e s e

b. Noodles, Rice, Gravies & Sauces all are prepared in UV Foods & company make sure quality of food.

R t s ue

c. Jyoty International (Logistics Partner) will pick products directly from UV Foods & deliver directly to stores. UV Foods do same kind of business for various players.

u l a

Q e

d. Company also trying to remove Chef requirement & setting up Wokie machine in stores which will help company to mix noodles & gravies without the help of Chef. Currently installed in 19 stores.

V

e. Machine is made in India – initial 4 lakhs now getting cost in 2.5 lakhs. Earlier labour cost 75k & now 25K, so payback period just 1 yr.

PROCUREMENT MANAGEMENT a. Company has centralised procurement process where head office procures food based on the requirement of regional mangers. Procurement order is done by Head office but delivery is done directly to Kitchen.

h c r a e s e

b. Chicken Procurement - Company backward integrated its chicken requirement to Hatchery Farm in Amritsar. Company has given interest free loan of INR 10 crore to Hatchery owner to set up everything.

R t s ue

c. Vegetables Procurement - Company procures directly from farmers or from Mandi. d.

u l a

Q e

Packaging Procurement – Company procures directly from National distributors.

V

Discount from Vendors expected – Currently company has 7 kitchens & procurement is done for each kitchen separately. With consolidation of kitchen to 4, bulk order will be at one place which will help company to achieve discount of around 4-5% from vendors which will improve margins.

LOGISTICS MANAGEMENT For logistics company appointed Jyoty International for delivery of products end to end.

h c r a e s e

a. Frozen Momo’s (FMCG) - Jyoty pick products from kitchen & deliver it to last mile like super markets, Blinkit, Zepto. Jyoty is charging around 7.5% on MRP

R t s ue

b. WoW China & WoW Chicken – Jyoty pick products directly from vendor (UV Foods) & deliver to stores.

u l a

Q e

c. Chilled Momo’s - Jyoty pick products from WoW kitchen & deliver to WoW warehouse. From warehouse company use its own warehouse to deliver to stores. Company owned 100-110 vehicles which distributes Chilled Momo’s from DC to each store

V

d. Jyoty international for transportation of products charge around INR 0.8-0.9/Momo. With scale company expects to reduce price to INR 0.6/Momo.

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

JYOTY International Financials

h c r a e s e

u l a

Q e

V Source: Probe 42

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

R t Technology & Operations s V

e u l a

e u Q

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

R t Marketing & Branding s

h c r a e s e

V

e u l a

e u Q

Core philosophy rooted on frugality

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

Key marketing mediums

h c r a e s e

V

u l a

Q e

R t s ue

Key distribution of Media

h c r a e s e

V

u l a

Q e

R t s ue

PR first approach, Mass reach marketing concepts

h c r a e s e

V

u l a

Q e

R t s ue

PR first approach, Mass reach marketing concepts

h c r a e s e

V

u l a

Q e

R t s ue

Community focused Initiatives & Engagements

h c r a e s e

V

u l a

Q e

R t s ue

Marketing & Promotional measures

h c r a e s e

V

u l a

Q e

R t s ue

Covid Bounce back campaign

h c r a e s e

V

u l a

Q e

R t s ue

h c r a e s e

V

u l a

Q e

R t s ue

CHINESE – A LARGE UNTAPPED OPPORTUNITY

h c r a e s e

V

u l a

Q e

R t s ue

CHINESE – A LARGE UNTAPPED OPPORTUNITY

h c r a e s e

V

u l a

Q e

R t s ue

CHINESE – FOOD MENU

h c r a e s e

V

u l a

Q e

R t s ue

CHINESE – MORE PROFITABLE THAN MOMOS

h c r a e s e

V

u l a

Q e

R t s ue

CHICKEN – HUGE OPPORTUNITY

h c r a e s e

V

u l a

Q e

R t s ue

India less than