Marketplace revenue up 52% and Gross
profit up 45% year-over-year
JumiaPay Total Payment Volume up 95% and
JumiaPay Transactions up 262% year-over-year
Jumia Technologies AG (NYSE: JMIA) (“Jumia” or the Company)
announced today its financial results for the quarter ended
September 30, 2019.
“We are making significant progress in the usage and relevance
of our platform for consumers and sellers and are firmly
positioning Jumia as the digital destination of choice for everyday
needs in Africa. In parallel, we continue to make great strides in
our payment and fintech business with JumiaPay showing very strong
growth momentum on both volume and transaction metrics,” commented
Sacha Poignonnec and Jeremy Hodara, Co-Chief Executive Officers of
Jumia.
“Our financial strategy seeks to balance growth, JumiaPay
development, monetization and cost efficiencies. We manage this
equation on a dynamic basis and are now placing even greater
emphasis on cash discipline and efficiency. Our growth strategy
favors business verticals and product categories that drive
adoption, repeat purchase and usage. On the cost efficiency front,
we continuously seek to optimize our portfolio of assets and
geographies to ensure efficient capital allocation. We are
confident this strategy will enhance our focus on our core assets
and contribute to building a healthy foundation for the long-term
growth and success of Jumia.”
Business and Financial highlights
- Growth momentum in topline drivers
- We are focused on growing consumer adoption, usage and
engagement on our platform. While our GMV increased by 39% this
quarter compared to the third quarter of 2018, our Annual Active
Consumers for the 12-month period ending September 30, 2019 grew by
56% and number of Orders for the quarter grew by 95% on a
year-on-year basis.
- The fastest growing categories on our platform in terms of
items sold are digital services offered on our JumiaPay mobile
application, such as airtime recharge and utility bills payments,
which are growing at triple digits, followed by Fast Moving
Consumer Goods (“FMCG”), such as groceries and staples, which
increased by 99% over the 9-month period ending September 30, 2019
compared to the same period last year. While these categories
typically include lower average value items, we believe they drive
strong engagement of our users and contribute to repeat purchases
and increased consumer lifetime value, while providing consumers
with an affordable entry point into our ecosystem.
- In an effort to enhance our value proposition to sellers and
consumers continuously, we have launched Jumia Mall in September
2019. Jumia Mall provides a dedicated space for brands or their
official distributors to reach consumers through a customized
e-shop with multiple services available to build their brand
awareness and online sales performance. These services include
marketing and visibility packages, business intelligence and data
analytics as well as seamless logistics through the Jumia Express
program. As of September 30, 2019, a couple of weeks after its
launch, Jumia Mall was already home to approximately 50% of the top
100 Forbes consumer brands, which we believe is a strong validation
of the relevance of Jumia as a platform of choice for brands.
- Development of JumiaPay
- JumiaPay remains a key focus area for us, and we aim to drive
the adoption of Jumia Pay on our platform in a gradual manner, in
order to expand into off-platform payments in the future.
- Our Total Payment Volume (“TPV”) reached €32 million in the
third quarter of 2019, up 95% from the same period last year. Our
number of JumiaPay Transactions reached 2.1 million, up 262% from
the same period last year, demonstrating robust traction of digital
payments on our platform. In the third quarter of 2019,
approximately 31% of Orders at Group level were settled via
JumiaPay compared to 16% a year ago, demonstrating our ability to
leverage the marketplace flywheel to drive the adoption of
JumiaPay.
- As of September 30, 2019, JumiaPay is available in six markets:
Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya. We continue
to prepare the rollout into selected new markets in the near
future.
- Our financial services marketplace, which is part of JumiaPay,
is a core element of our fintech ecosystem. Jumia Lending, which
today acts as an intermediary between sellers on our platform and
third-party financial institutions, is making great progress in
driving financial inclusion and access to credit for SMEs. Jumia
Lending is instrumental in the credit underwriting process,
providing valuable business data to financial institutions to help
pre-score the credit of our sellers. We typically take no credit
risk and have no balance sheet exposure to such loans. As of
September 30, 2019, Jumia Lending is available in the six countries
where JumiaPay is active. Jumia Lending helped in the origination
of approximately €5 million worth of loans to more than 770 sellers
on our platform since its launch in early 2017. The average loan
amount is around €3,200 for an average duration of 5 months.
- Increased monetization
- In parallel with driving topline growth and development of
JumiaPay, Gross profit increased by 45% compared to the third
quarter of 2018, while Marketplace revenue increased by 52% over
the same period, demonstrating our ability to effectively drive
monetization while sustaining robust growth of our platform.
Driving revenue and gross profit is an important part of our
strategy and a primary focus for us.
- Our monetization strategy aims to create diversified revenue
streams from transaction activity and usage of our platform,
particularly through the monetization of services that enhance our
sellers’ performance, such as Jumia Express or Jumia
Advertising.
- Jumia Advertising is set up as an in-house advertising agency
with dedicated marketing and advertising professionals. Leveraging
the unique reach and data of the Jumia platform, Jumia Advertising
aims to drive measurable results to brands and sellers, external
advertising agencies and third-party advertisers. We offer them a
comprehensive range of solutions, including sponsored product ads,
sponsored display and CRM tools that can target consumers in a
granular manner at different stages of their shopping journey.
- Cost efficiencies
- Our financial strategy seeks to balance robust topline growth
and development of JumiaPay with growing monetization and cost
efficiencies.
- We are seeing very significant improvements in our Sales and
Advertising efficiency. While delivering robust growth of topline
drivers and usage of our platform, Sales & Advertising expense
as a percentage of GMV decreased by 143 basis points (“bps”), from
6.1% of GMV in the third quarter of 2018 to 4.7% in the third
quarter of 2019, reflecting the strong Jumia brand awareness, our
discipline in terms of Sales & Advertising investments as well
as the strong momentum of our offering among existing and new
consumers.
- Adjusted EBITDA loss as a percentage of GMV improved from
negative 18.0% in the third quarter of 2018 to negative 16.5% in
the third quarter of 2019.
- Portfolio optimization
- We regularly conduct portfolio reviews which assess the
allocation of our resources to business verticals and geographies
against multiple criteria, including financial performance,
commercial environment as well as the ease and cost of doing
business. As part of this year’s portfolio review, a number of
initiatives are underway. We expect these initiatives to
collectively account for less than 10% of our GMV, Gross profit and
Operating loss for the 9-month period ending September 30,
2019.
- These initiatives are aimed at enhancing our business focus and
allocating investment, resources and talent to those areas that we
believe present the best opportunities to support the Company’s
long-term growth and path to profitability.
Selected Operational KPIs
1. Marketplace KPIs
2018
2019
Third Quarter
Third Quarter
GMV1 (€ million)
198.4
275.3
Annual Active Consumers2
(million)
3.5
5.5
Number of Orders3
(million)
3.6
7.0
1 GMV corresponds to the total value of
orders for products and services including shipping feesvalue added
taxand before deductions of any discounts or vouchersirrespective
of cancellations or returns for the relevant period.
2 Annual Active Consumers means unique
consumers who placed an order for a product or a service on our
platform within the 12-month period preceding the relevant
dateirrespective of cancellations or returns.
3 Number of Orders corresponds to the
total number of orders for products and services on our
platformirrespective of cancellations or returnsfor the relevant
period.
- GMV increased by 38.7% from €198 million in the third quarter
of 2018 to €275 million in the third quarter of 2019, on the back
of sustained volume growth on the platform. Comparisons between the
third quarters of 2019 and 2018 and between the second and third
quarters of 2019 are affected by changes in our commercial calendar
dates, particularly the Jumia Anniversary campaign which is a Tier
1 campaign that took place in its entirety in the third quarter of
2018 while approximately half of it took place this year during the
second quarter.
- The number of Annual Active Consumers as of September 30, 2019
was 5.5 million, up from 3.5 million a year ago and up from 4.8
million at the end of the second quarter of 2019. This corresponds
to a quarterly net addition of approximately 636 thousand consumers
compared to a quarterly net addition of approximately 300 thousand
consumers over the same period last year. This acceleration in
consumer growth is a result of our continuous efforts to drive
product and service offering relevance while consistently enhancing
consumer experience at every touch point of the Jumia
platform.
- The number of Orders on our platform increased by 95.2% from
3.6 million in the third quarter of 2018 to 7.0 million in the
third quarter of 2019. Our Orders growth outpaces GMV growth as a
result of consumers purchasing increasing amounts of everyday
product categories, which are typically lower average value items,
on a more frequent basis. Over the 12-month period ending September
30, 2018, we had 3.5 million Annual Active Consumers placing on
average 3.4 orders per annum, for an average value of €59.7 per
order. Over the 12-month period ending September 30, 2019, we had
56% more consumers - 5.5 million Annual Active Consumers - placing
on average 27% more orders - 4.3 orders per annum – for an average
value of €46.5 per order. This reflects the ability of our platform
to drive consumer adoption and more frequent usage.
2. JumiaPay KPIs
2018
2019
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
TPV1 (€ million)
2.2
7.1
16.4
29.1
20.7
26.0
32.0
JumiaPay Transactions2
(million)
0.1
0.2
0.6
1.2
1.3
1.8
2.1
1 Total Payment Volume corresponds to the
total value of orders for products and services completed using
JumiaPay including shipping fees, value-added tax, before any
cashback, irrespective of cancellations or returns.
2 JumiaPay Transactions corresponds to the
total number of orders for products and services completed using
JumiaPay, irrespective of cancellations or returns.
- TPV increased by 94.8% from €16 million in the third quarter of
2018 to €32 million in the third quarter of 2019 while JumiaPay
Transactions grew by 262% over the same period. This led to an
increase in the penetration of JumiaPay transactions on our
platform, as JumiaPay TPV represented 11.6% of GMV in the third
quarter of 2019, and JumiaPay transactions represented 30.6% of
Orders placed on our platform, up from 16.5% a year ago.
- The increase in JumiaPay penetration is driven by a combination
of continuous education efforts of consumers on our platform,
incentives such as capped cashbacks offered to consumers for the
usage of JumiaPay, as well as the roll-out of JumiaPay to more
geographies and Jumia properties. We also continued to add relevant
digital services to consumers as part of our JumiaPay payment
app.
Selected Financial Information
1.
Revenue
The following table shows a breakdown of
revenue for the third quarters of 2018 and 2019.
For the three months ended
September 30
YoY
(€ million)
2018
20191
Change
Marketplace revenue
12.5
18.9
52.1%
Commissions
4.2
5.3
27.5%
Fulfillment
4.0
7.3
82.2%
Marketing & Advertising
0.7
1.6
125.4%
Value Added Services
3.6
4.7
32.9%
First Party revenue
20.5
20.9
1.8%
Platform revenue
33.0
39.8
20.8%
Non-Platform revenue
0.7
0.2
(64.1%)
Revenue
33.6
40.1
19.1%
1 Certain types of vouchers and consumer
incentives were reclassified from Sales & Advertising to
Revenue as further described in “Voucher and consumer incentives
reclassification” below. The cumulative effect for the nine months
ended September 302019 is included in the results for the three
months ended September 30 2019. Results for the three months ended
September 302018 have not been adjusted.
- Marketplace revenue increased by
52.1% in the third quarter of 2019 compared to the third quarter of
2018, as we continue to drive monetization in parallel with
increased usage of our platform.
- Commissions, which are charged to our sellers, grew by
27.5%.
- Fulfillment, which are delivery fees charged to consumers, grew
by 82.2%.
- Marketing & Advertising, which corresponds to the revenue
generated from the sale of a diversified range of ad solutions to
sellers and advertisers grew by 125.4%. The sustained momentum in
this revenue stream shows the appetite from both sellers and
advertisers for a compelling offer of digital advertising reaching
a broad base of users, capable of driving measurable
performance.
- Value Added Services, which include revenue from services
charged to our sellers such as logistics services, packaging, or
content creation, grew by 32.9%.
- First Party revenue increased by
1.8% in the third quarter of 2019 compared to the third quarter of
2018. We undertake our first party activity in an opportunistic
manner to complement the breadth of product assortment on our
platform, usually in areas where we see unmet consumer demand. Over
time, it is our goal to reduce the proportion of first party
activity in favor of third-party activity at group level. This
strategy may however vary from quarter to quarter and from country
to country.
-
Shifts in the mix between first party and marketplace activities
trigger substantial variations in our Revenue as we record the full
sales price net of returns as First Party revenue and only
commissions and fees in the case of Marketplace revenue.
Accordingly, we steer our operations not on the basis of our total
Revenue, but rather on the basis of Gross profit, as changes
between third-party and first-party sales mix are largely
eliminated at the Gross profit level.
2. Gross Profit
For the three months ended
September 30
YoY
(€ million)
2018
2019
Change
Gross profit
12.5
18.1
45.0%
Gross profit increased by 45.0% from €12.5 million in the third
quarter of 2018 to €18.1 million in the third quarter of 2019, as a
result of increased platform monetization.
3. Fulfillment Expense
For the three months ended
September 30
YoY
(€ million)
2018
2019
Change
Fulfillment expense
13.3
20.7
55.4%
Fulfillment expense includes expenses related to services of
third-party logistics providers, expenses related to our network of
warehouses and pick-up stations, including employee benefit
expenses. Fulfillment expense grew by 55.4% in the third quarter of
2019 compared to the third quarter of 2018.
Fulfillment expense is influenced by a number of factors
including:
- The origin of the goods, for example the cost of shipping a
product from a cross-border seller based overseas is higher than
shipping from a local seller.
- The destination of the package and type of delivery, for
example main city vs. secondary city vs. rural area, and home
delivery vs. pick-up station.
- The type of goods, for example the cost of delivery is higher
for a large home appliance than a fashion accessory.
Fulfillment expense this quarter was impacted by a higher
proportion of cross-border packages shipped from overseas sellers
as well as a higher proportion of packages delivered outside
primary cities. However, we continue to observe significant
Fulfillment expense efficiencies as our order volumes grow.
4. Sales & Advertising
Expense
For the three months ended
September 30
YoY
(€ million)
2018
20191
Change
Sales & Advertising expense
12.2
12.9
6.3%
1 Certain types of vouchers and consumer
incentives were reclassified from Sales & Advertising to
Revenue as further described in “Voucher and consumer incentives
reclassification” below. The cumulative effect for the nine months
ended September 302019 is included in the results for the three
months ended September 30 2019. Results for the three months ended
September 302018 have not been adjusted.
Our Sales & Advertising expense increased by 6.3% to €12.9
million in the third quarter of 2019 from €12.2 million in the
third quarter of 2018, while we were able to increase our Active
Consumers by 56.3% and our Orders by 95.2% over the same
period.
5. General and Administrative Expense,
Technology and Content Expense
For the three months ended
September 30
YoY
(€ million)
2018
2019
Change
General and Administrative ("G&A")
expense
22.5
32.7
45.4%
Share-Based Compensation ("SBC")
expense
(4.3)
(7.1)
67.1%
G&A expense, excluding SBC
18.2
25.6
40.3%
Technology & Content
expense
5.3
7.0
31.4%
G&A, Technology & Content
expense, excluding SBC
23.5
32.5
38.3%
General and Administrative expense contains wages and benefits,
including share-based payment expense of management, as well as
seller management, commercial development, accounting and legal
staff, depreciation and amortization, professional fees, audit
expense, utilities cost, insurance and other overhead expense.
General and Administrative expense excluding SBC increased by
40.3% from €18.2 million in the third quarter of 2018 to €25.6
million in the third quarter of 2019, as a result of an increase in
staff costs and professional fees.
Technology and Content expense increased by 31.4% from €5.3
million in the third quarter of 2018 to €7.0 million in the third
quarter of 2019.
6. Operating Loss and Adjusted
EBITDA
For the three months ended
September 30
YoY
(€ million)
2018
2019
Change
Operating loss
(40.6
)
(54.6
)
34.6
%
Depreciation and amortization
0.6
2.1
277.0
%
Share-Based Compensation ("SBC")
expense
4.3
7.1
67.1
%
Adjusted EBITDA
(35.8
)
(45.4
)
26.9
%
As % of GMV
(18.0
%)
(16.5
%)
Operating loss increased by 34.6% from €40.6 million in the
third quarter of 2018 to €54.6 million in the third quarter of 2019
mainly due to an increase in G&A expense, which includes SBC
expense, as well as an increase in the Fulfillment expense.
Adjusted EBITDA loss increased by 26.9% from €35.8 million in
the third quarter of 2018 to €45.4 million in the third quarter of
2019. As a percentage of GMV, Adjusted EBITDA loss decreased from
negative 18.0% in the third quarter of 2018 to negative 16.5% in
the third quarter of 2019 mostly as a result of higher marketing
efficiencies.
On January 1, 2019, we adopted IFRS
16 which changed the accounting for leases. This led to a reduction
in General and Administrative expense by approximately €1.4 million
in the third quarter of 2019, an increase in D&A by
approximately €1.3 million and an increase in finance costs by
approximately €0.4 million resulting in a positive impact on
Adjusted EBITDA of approximately €1.4 million in the third quarter
of 2019, a positive impact on Operating loss of €0.1 million and a
negative impact on Net loss of €0.2 million. Prior period amounts
were not retrospectively adjusted.
7. Cash Position
At the end of September 30, 2019, we had €291.2 million of cash
on our balance sheet, including Cash & cash equivalents of
€227.1 million and €64.1 million of Term deposits.
Sales Practices Review
As disclosed in our report on second quarter results dated
August 21, 2019, we have been conducting a sales practices review.
The sales practices review, which relates to certain improper
orders that were placed and subsequently cancelled, is ongoing.
Employees involved in this practice, who were previously suspended,
have now been terminated or resigned. We are implementing measures
designed to prevent similar conduct in the future and, more
broadly, are taking steps to strengthen our internal controls and
corporate governance.
Legal Proceedings
Since May 2019, several class action lawsuits have been filed
against us and certain of our officers in the U.S. District Court
for the Southern District of New York, the Kings County Supreme
Court and the New York County Supreme Court in New York. The claims
in these cases relate to alleged misstatements and omissions in our
initial public offering prospectus and statements made by our
company in connection with our initial public offering. These
actions remain in their preliminary stages.
Conference Call and Webcast information
Jumia will host a conference call today, November 12, 2019 at
8:30 a.m. U.S. Eastern Time to discuss Jumia’s results. Details of
the conference call are as follows:
Participant Dial in (Toll Free): 1-888-317-6016
Participant International Dial in: 1-412-317-6016
Canada Toll Free: 1-855-669-9657
A live webcast of the earnings conference call can be accessed
on the Jumia Investor Relations website:
https://investor.jumia.com/
An archived webcast will be available following the call.
(UNAUDITED)
Consolidated statement of
comprehensive income as of September 30, 2019 and 2018
For the three months ended For the nine
months ended September 30
September 30 September 30
September 30 In thousands of EUR
2019
2018
2019
2018
Revenue
40,057
33,639
111,132
86,773
Cost of revenue
21,937
21,140
60,066
56,751
Gross profit
18,120
12,499
51,066
30,022
Fulfillment expense
20,708
13,322
53,512
33,221
Sale and advertising expense
12,916
12,153
40,529
33,408
Technology and content expense
6,984
5,317
19,544
15,856
General and administrative expense
32,660
22,462
105,325
64,292
Other operating income
714
333
1,392
434
Other operating expense
177
162
308
465
Operating loss
(54,611
)
(40,584
)
(166,760
)
(116,786
)
Finance income
4,390
565
4,912
1,121
Finance costs
(103
)
720
1,573
1,136
Loss before Income tax
(50,118
)
(40,739
)
(163,421
)
(116,801
)
Income tax expense
(208
)
161
53
503
Loss for the period
(49,910
)
(40,900
)
(163,474
)
(117,304
)
Attributable to: Equity holders of
the Company
(49,818
)
(40,038
)
(163,228
)
(115,428
)
Non-controlling interests
(92
)
(862
)
(246
)
(1,876
)
Loss for the period
(49,910
)
(40,900
)
(163,474
)
(117,304
)
Other comprehensive income/loss to be classified to
profit or loss in subsequent periods Exchange
differences on translation of foreign operations - net of tax
(19,771
)
(2,374
)
(30,278
)
(6,660
)
Other comprehensive income / (loss) on net investment in
foreign operations - net of tax
20,525
2,304
31,310
6,854
Other comprehensive income / (loss)
754
(70
)
1,032
194
Total comprehensive loss for the period
(49,156
)
(40,970
)
(162,442
)
(117,110
)
Attributable to: Equity holders of
the Company
(49,063
)
(40,067
)
(162,196
)
(115,251
)
Non-controlling interests
(93
)
(903
)
(246
)
(1,859
)
Total comprehensive loss for the period
(49,156
)
(40,970
)
(162,442
)
(117,110
)
(UNAUDITED) Consolidated statement of financial position as of
September 30, 2019 and December 31, 2018
As of
September 30
December 31
In thousands of EUR
2019
2018
Assets Non-current
assets Property and equipment
17,456
5,020
Intangible assets
60
180
Deferred tax assets
175
175
Other non-current assets
1,430
1,263
Total Non-current assets
19,121
6,638
Current assets Inventories
10,279
9,431
Trade and other receivables
14,005
13,034
Income tax receivables
740
726
Other taxes receivable
6,397
4,172
Prepaid expenses and other current assets
8,491
7,384
Term deposits
64,124
-
Cash and cash equivalents
227,073
100,635
Total Current assets
331,109
135,382
Total Assets
350,230
142,020
Equity and Liabilities
Equity Share capital
156,816
133
Share premium
1,018,276
845,787
Other reserves
99,083
66,093
Accumulated losses
(1,032,683)
(862,048)
Equity attributable to the equity holders of the
Company
241,492
49,965
Non-controlling interests
(369)
(117)
Total Equity
241,123
49,848
Liabilities Non-current
liabilities Non-current borrowings
6,623
-
Total Non-current liabilities
6,623
-
Current liabilities Current
borrowings
3,638
-
Trade and other payables
54,678
47,681
Income tax payables
9,665
10,882
Other taxes payable
5,718
7,288
Provisions for liabilities and other charges
23,126
19,829
Deferred income
5,659
6,492
Total Current liabilities
102,484
92,172
Total Liabilities
109,107
92,172
Total Equity and Liablities
350,230
142,020
(UNAUDITED)
Consolidated statement of cash flows as of
September 30, 2019 and 2018
For the three months
ended
For the nine months
ended
September 30
September 30
September 30
September 30
In thousands of EUR
2019
2018
2019
2018
Loss before Income tax
(50,118)
(40,739)
(163,421)
(116,801)
Depreciation and amortisation of tangible and
intangible assets
2,055
555
5,528
1,531
Impairment losses on loans, receivables and other
assets
558
687
2,607
2,231
Impairment losses on obsolete inventories
374
858
727
787
Share-based payment expense
7,100
4,250
31,934
13,707
Net (gain)/loss from disposal of tangible and intangible
assets
(5)
10
(170)
22
Impairment losses on investment in subsidiaries
28
42
28
42
Net (gain)/loss from disposal of financial assets at
amortised cost
-
-
6
-
Change in provision for other liabilities and charges
1,493
676
3,039
2,310
Interest (income)/expenses
(498)
61
(302)
34
Net unrealized foreign exchange (gain)/loss
(3,910)
(132)
(3,023)
(349)
Working capital adjustments:
(Increase)/Decrease in trade and other receivables,
prepayments and VAT receivables
6,247
442
(6,188)
67
(Increase)/Decrease in inventories
3,274
(1,239)
(1,516)
(864)
Increase/(Decrease) in trade and other payables, prepayments
and VAT payables
(9,135)
(3,234)
390
(7,436)
Income taxes paid
(145)
(321)
(1,271)
(812)
Net cash flows used in operating activities
(42,682)
(38,084)
(131,632)
(105,531)
Cash flows from investing
activities Purchase of property and
equipment
(1,480)
(1,076)
(3,609)
(2,268)
Proceeds from disposal of property and equipment
3
44
12
57
Purchase of intangible assets
(30)
8
(31)
(27)
Proceeds from sale of intangible assets
3
219
222
219
Payment for acquisition of subsidiary, net of cash
acquired
9
-
7
-
Interest received
45
-
533
-
Movement in other non-current assets
(6)
(551)
(184)
(658)
Placement of term deposits
-
-
(62,715)
-
Net cash flows used in investing activities
(1,456)
(1,356)
(65,765)
(2,677)
Cash flows from financing
activities Repayment of borrowings
(5)
-
(5)
-
Interest settled - financing
(78)
-
(78)
-
Repayment of lease interest
67
-
(700)
-
Repayment of lease liabilities
(1,210)
-
(2,547)
-
Expenses reclassed to Equity
(1,109)
-
(4,856)
-
Capital contributions received
5
31,972
329,177
119,972
Net cash flows from financing activities
(2,330)
31,972
320,991
119,972
Net decrease/increase in cash and cash
equivalents
(46,468)
(7,468)
123,594
11,764
Effect of exchange rate changes on cash and cash
equivalents
2,146
632
2,844
740
Cash and cash equivalents at the beginning of the period
(*)
271,395
49,068
100,635
29,728
Cash and cash equivalents at the end of the
period
227,073
42,232
227,073
42,232
(*) Cash at the beginning of period as at June 30th has been
adjusted to reflect a reclassification of investment in term
deposits
Forward Looking
Statements
This release includes forward-looking statements. All statements
other than statements of historical facts contained in this
release, including statements regarding our future results of
operations and financial position, industry dynamics, business
strategy and plans and our objectives for future operations, are
forward-looking statements. These statements represent our
opinions, expectations, beliefs, intentions, estimates or
strategies regarding the future, which may not be realized. In some
cases, you can identify forward-looking statements by terms such as
“may,” “will,” “should,” “expects,” “plans,” “anticipates,”
“could,” “intends,” “targets,” “projects,” “believes,” “estimates”,
“potential” or “continue” or the negative of these terms or other
similar expressions that are intended to identify forward-looking
statements. Forward-looking statements are based largely on our
current expectations and projections about future events and
financial trends that we believe may affect our financial
condition, results of operations, business strategy, short-term and
long-term business operations and objectives, and financial needs.
These forward-looking statements involve known and unknown risks,
uncertainties, changes in circumstances that are difficult to
predict and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statement. Moreover, new risks
emerge from time to time. It is not possible for our management to
predict all risks, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements we may make. In light
of these risks, uncertainties and assumptions, the forward-looking
events and circumstances discussed in this release may not occur
and actual results could differ materially and adversely from those
anticipated or implied in the forward-looking statements. We
caution you therefore against relying on these forward-looking
statements, and we qualify all of our forward-looking statements by
these cautionary statements.
The forward-looking statements included in this release are made
only as of the date hereof. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee that the future results, levels of
activity, performance or events and circumstances reflected in the
forward-looking statements will be achieved or occur. Moreover,
neither we nor our advisors nor any other person assumes
responsibility for the accuracy and completeness of the
forward-looking statements. Neither we nor our advisors undertake
any obligation to update any forward-looking statements for any
reason after the date of this release to conform these statements
to actual results or to changes in our expectations, except as may
be required by law. You should read this release with the
understanding that our actual future results, levels of activity,
performance and events and circumstances may be materially
different from what we expect.
Non-IFRS and Other Financial and
Operating Metrics
Changes, percentages, ratios and aggregate amounts presented
have been calculated on the basis of unrounded figures.
This release includes certain financial measures and metrics not
based on IFRS, including Adjusted EBITDA, as well as operating
metrics, including GMV and Active Consumers. We define GMV, Active
Consumers and Adjusted EBITDA as follows:
GMV corresponds to the total value
of orders for products and services, including shipping fees, value
added tax, and before deductions of any discounts or vouchers,
irrespective of cancellations or returns for the relevant
period.
Annual Active Consumers means
unique consumers who placed an order for a product or a service on
our platform, within the 12-month period preceding the relevant
date, irrespective of cancellations or returns.
Number of Orders corresponds to the
total number of orders for products and services on our platform,
irrespective of cancellations or returns, for the relevant
period.
Total Payment Volume corresponds to
the total value of orders for products and services completed using
JumiaPay including shipping fees, value-added tax, and before
deductions of any discounts or vouchers, irrespective of
cancellations or returns.
JumiaPay Transactions corresponds
to the total number of orders for products and service completed
using JumiaPay, irrespective of cancellations or returns.
Adjusted EBITDA corresponds to loss
for the period, adjusted for income tax expense, finance income,
finance costs, depreciation and amortization and share-based
payment expense.
Adjusted EBITDA is a supplemental non-IFRS measure of our
operating performance that is not required by, or presented in
accordance with, IFRS. Adjusted EBITDA is not a measurement of our
financial performance under IFRS and should not be considered as an
alternative to loss for the period, loss before income tax or any
other performance measure derived in accordance with IFRS. We
caution investors that amounts presented in accordance with our
definition of Adjusted EBITDA may not be comparable to similar
measures disclosed by other companies, because not all companies
and analysts calculate Adjusted EBITDA in the same manner. We
present Adjusted EBITDA because we consider it to be an important
supplemental measure of our operating performance. Management
believes that investors’ understanding of our performance is
enhanced by including non-IFRS financial measures as a reasonable
basis for comparing our ongoing results of operations. By providing
this non-IFRS financial measure, together with a reconciliation to
the nearest IFRS financial measure, we believe we are enhancing
investors’ understanding of our business and our results of
operations, as well as assisting investors in evaluating how well
we are executing our strategic initiatives.
Management uses Adjusted EBITDA:
- as a measurement of operating performance because it assists us
in comparing our operating performance on a consistent basis, as it
removes the impact of items not directly resulting from our core
operations;
- for planning purposes, including the preparation of our
internal annual operating budget and financial projections;
- to evaluate the performance and effectiveness of our strategic
initiatives; and
- to evaluate our capacity to expand our business.
Items excluded from this non-IFRS measure are significant
components in understanding and assessing financial performance.
Adjusted EBITDA has limitations as an analytical tool and should
not be considered in isolation, or as an alternative to, or a
substitute for analysis of our results reported in accordance with
IFRS, including loss for the period. Some of the limitations
are:
- Adjusted EBITDA does not reflect our share-based payments,
income tax expense or the amounts necessary to pay our taxes;
- although depreciation and amortization are eliminated in the
calculation of Adjusted EBITDA, the assets being depreciated and
amortized will often have to be replaced in the future and such
measures do not reflect any costs for such replacements; and
- other companies may calculate Adjusted EBITDA differently than
we do, limiting its usefulness as a comparative measure.
Due to these limitations, Adjusted EBITDA should not be
considered as a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these and
other limitations by providing a reconciliation of Adjusted EBITDA
to the most directly comparable IFRS financial measure, loss for
the period.
The following table provides a reconciliation of loss for the
period to Adjusted EBITDA for the periods indicated:
For the three months
ended September 30
(€ million)
2018
2019
Loss for the period
(40.9
)
(49.9
)
Income tax expense
0.2
(0.2
)
Finance costs
0.7
(0.1
)
Finance income
(0.6
)
(4.4
)
Depreciation and amortization
0.6
2.1
Share-based payment expense
4.3
7.1
Adjusted EBITDA
(35.8
)
(45.4
)
Number of Orders
– Supplemental information
2018
2019
(million)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Orders
2.5
2.7
3.6
5.5
5.0
6.2
7.0
Voucher and consumer incentives
reclassification
Revenue, Gross profit and Sales & Advertising expense were
marginally impacted in the third quarter of 2019 by the
reclassification under IFRS 15 of certain types of vouchers and
consumer incentives from Sales & Advertising expense to a
deduction in revenue. For comparability purposes, the following
table presents, on a quarterly basis, the amounts of vouchers and
consumer incentives subject to reclassification. The cumulative
amounts of vouchers and consumer incentives subject to
reclassification for the 9-month period ending September 30, 2019
was reclassified as part of the third quarter of 2019
financials.
2018
2019
(€ thousand)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Vouchers attributable to First Party
activity
88
62
44
103
66
59
48
Vouchers attributable to Marketplace
activity
306
293
203
413
370
373
285
Total
394
354
247
516
435
432
332
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112005469/en/
Safae Damir Head of Investor Relations
investor-relations@jumia.com
Abdesslam Benzitouni Head of PR and Communications
press@jumia.com
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