1. Pepperfry
Fia Consulting
Alex
Nicholas
Rodrigo
Vanessa

2. Agenda Executive Summary Key Issues Recommendation Alternatives
Implementation
Risks
Financial

3. $ Executive Summary Exponential growth of sales
2012 Pepperfry was launched
Organized Process in the Indian Furniture Industry
Exponential growth of sales

4. Not Enough Sales Ramp up
Key Issues
Losses of USD$ 37 Mi
Revenue USD$ 38, 7Mi
Not Enough Sales Ramp up
Online sales 2%

5. Market Analysis Strengths Weakness Opportunities Threats
Local Knowhow;
Variety of Products;
Vertical;
Omnichannel
P&L pressure
Online White Space (2%);
Franchising;
Users Targeted
Competitors – Ikea, FlipKart, Amazon;
Economics instability
Opportunities
Threats

6. Our recommendation 1 – Sharpen your omnichannel strategy
Exponential Growth of Sales keeping your best initiatives improving:
Omnichannel strategy boosted by IT (Augmented reality, IOT);
Physical Stores Expansion;
Marketing Actions coordinated (Online & Offline)
* Online & Offline
* Proud to be Indian
* Better and refined Business Analytics
Acceptable Cost
Ramp up Revenue
Increase Capacity
Shortage of Cash flow

7. Alternatives 2 - Merge & Acquisition
Targeting Potential Companies to boost revenue;
Faster to Access new customers
Considerable Investment
Hard Sinergy project

8. Alternatives 3 – Sell the Business
Find a potential buyer for the business now
Realize part of the investment
Underpricing due the current results achieved

9. Alternatives summary Evaluation Criteria
Implementation Difficult: Evaluation of budget, timeframes and changes in the current biz model and philosophy
Potential Return: Evaluation of how much return can be expected from this execution
Total risks exposure: Operational, environmental and market related

10. Execution Plan
Execute branding strategy with local celebrities and influencers – Immediately!
Business Analytics to support all MKT strategies;
Proud to be Indian content construction – ready within 6 months
Continue with TV strategy
Marketing – Immediately on
Basic Infrastructure to support New Model
Augmented Reality Implementation for Home
Augmented Reality Implementation for Studios
IT – Immediately on

11. Execution Plan Bangalore Region Pune region Mumbai New Deli Hyderabad
Studio Stores Opening – 2019 to 2022
Indore Region
Vizag
Chennai Province
Jaipur
Goa
Franchise Model – 2019 to 2023

12. Our Detailed Path to Grow

13. Potential risks involved
Increase the level of competition
Due the market growth potential we will probably face some level of increased competition
Impact: Moderate to High
Mitigation: Focus on our differentiation strategy
Market growth less than our forecasts
Due the several reasons we can have this effect on ours results
Impact: Moderate to High
Mitigation: Our plan can support some level of variation, and also we can sell self owned stores to franchisers.

14. After 5 years we didn’t reach profitability
5 years: -115 Mio

15. But we still have cash Raised USD 195 Mio Norwest Venture Partners
Bertelsmarn Investments
Goldman Sachs
Zodius Capital
State Street Global Advisors

16. But we still have cash Raised USD 195 Mio Norwest Venture Partners
Funding: 195 Mio
Raised USD 195 Mio
Norwest Venture Partners
Bertelsmarn Investments
Goldman Sachs
Zodius Capital
State Street Global Advisors
Losses: 115 Mio
Capex and CWC*: 25 Mio
Cash: 55 Mio

17. With our plan we will reach a big top line increase
Assumption

18. With our plan we will reach a big top line increase
8.5 X vs 2018

19. Following this breakdown
Topline (USD Mio)
160
544
180
130 35 39
2017
Organic online
Organic offline
New own stores
New franchisers
2023

20. Following this breakdown
Topline (USD Mio)
160
544
180
2020: 35bi USD
2023*: 46bi USD
130
MKT Share: 1.2% 35 39
2017
Organic online
Organic offline
New own stores
New franchisers
2023

21. This results will drive a positive EBITDA in the next 18 months (1H 2020)

22. This results will drive a positive EBITDA in the next 18 months (1H 2020)
Margin: 23%

23. But if the market doesn’t grow to USD 35 Bi in 2020
25% reduction

24. But if the market doesn’t grow to USD 35 Bi in 2020
25% reduction

25. Then in 2023 we will have a strong financial position
Top line growth: 8.5 X
Positive EBITDA in 2020
Safe Cash position – no funding required

26. Should we move to an IPO?

27. Should we move to an IPO? Strong business Financial results
No additional funding needed

28. Bonds: 6-7% per year to boost the 2023-2028 plan
Should we move to an IPO?
Strong business
Financial results
No additional funding needed
Recommendation
Bonds: 6-7% per year to boost the plan
IPO in 2028

29. Conclusion Marketing Actions Physical Stores, Omnichannel Strength
POSITIVE EBITDA
Exponential Sales Growth
Physical Stores, Omnichannel Strength
Marketing Actions