Gross profit up 64% in Q4 2019
year-over-year and 72% for the full year 2019
JumiaPay Transactions accelerate 110% in Q4
2019 year-over-year and 278% for the full year
2019
Jumia Technologies AG (NYSE: JMIA) (“Jumia” or the Company)
announced today its financial results for the fourth quarter and
full-year ended December 31, 2019.
“In the fourth quarter of 2019, we took a number of important
actions to support our path to profitability while positioning the
business for long term growth.” commented Sacha Poignonnec and
Jeremy Hodara, Co-Chief Executive Officers of Jumia.
“We initiated a rebalancing of our business mix towards higher
consumer lifetime value business, reducing promotional intensity on
certain product categories, while driving growth of the more
affordable, higher purchase frequency ones. While this led to a
softer GMV growth trajectory, it has supported consumer acquisition
and usage growth. Annual Active Consumers reached a record 6.1
million and Orders increased by 49% in the fourth quarter of 2019
when compared with the fourth quarter of 2018.
This rebalancing, alongside gradual monetization, supported
profitability as Gross profit reached €24.8 million, up 64%
compared to the fourth quarter of 2018. Our Gross profit after
Fulfillment expense was positive at €1.0 million in the fourth
quarter of 2019 compared to a loss of €2.1 million in the fourth
quarter of 2018.
We also undertook a portfolio optimization initiative to enhance
our business focus and align our investments and resources with the
opportunities that we believe best support our long-term growth and
path to profitability. We expect the impact of these initiatives to
continue playing out in the coming quarters, with a more meaningful
contribution to our path to profitability in 2020 and beyond.”
FOURTH QUARTER 2019 – PROGRESS ON
STRATEGY
- Marketplace growth: Driving
profitable growth with key focus on usage and consumer acquisition.
- Annual Active Consumers reached a record 6.1 million, a
year-over-year increase of 54%.
- Orders reached 8.3 million, a year-over-year increase of
49%.
- GMV was €301 million, a year-over-year decrease of 3%.
Adjusting for perimeter changes as a result of the portfolio
optimization undertaken during the quarter, as well as previously
reported improper sales practices, GMV of the fourth quarter of
2019 would have been €293 million, up 6% from €275 million in the
fourth quarter of 2018.
- JumiaPay development:
Continued expansion of JumiaPay on-platform, with a view to
offering payment and financial services off-platform in the future.
- JumiaPay Total Payment Volume (“TPV”) was €45.6 million, a
year-over-year increase of 57%, taking on-platform TPV penetration
to 15%.
- JumiaPay Transactions reached 2.4 million, a year-over-year
increase of 110%, representing 29% of Orders on-platform.
- Monetization development:
Gradual monetization of usage and transactional activity, through
diversified revenue streams.
- Gross profit reached €24.8 million, a year-over-year increase
of 64%.
- Continued development of Marketing & Advertising revenue
stream, up 120% on a year-over-year basis.
- Cost efficiencies: Driving
scale benefits on Fulfillment expense, increasing returns on Sales
& Advertising expense, right-sizing General &
Administrative cost base.
- Gross profit after Fulfillment expense turned positive,
reaching €1.0 million, compared to a loss of €2.1 million in the
fourth quarter of 2018.
- Sales & Advertising expense was €15.5 million, up 14%
compared to the fourth quarter 2018. Full year 2019 Sales &
Advertising expense per Annual Active Consumer decreased by 21%
from €12 in 2018 to €9 in 2019.
- Adjusted EBITDA loss, excluding restructuring G&A expense,
was €51.2 million, compared to €48.6 million in the fourth quarter
of 2018.
FOURTH QUARTER 2019 - BUSINESS
HIGHLIGHTS
Marketplace Growth
- Black Friday 2019 – Our Black
Friday campaign ran over the course of 4 Fridays in November 2019.
Jumia pioneered the Black Friday event on a pan-African basis in
2014 and, for its fifth edition, crossed a number of milestones.
- During the event, we surpassed 1 billion pages viewed on our
platforms, demonstrating our ability to engage our consumers in a
compelling way. In Egypt, the soundtrack of the Jumia Black Friday
commercial made it to the second position in the Arabic top charts
with heavy rotation across major national radio channels. This
illustrates our ability to create highly engaging, tailored content
to local preferences.
- In parallel, we ran 14 super-brand days during the campaign,
offering participating brands enhanced visibility on our platforms
with relevant social media and CRM activations. As a result of the
commercial success of such days, a number of brands converted their
marketing relationship with us from ad-hoc campaign contributions
to annual marketing budgets for management by Jumia.
- Driving inclusive growth is core
to our mission. In the course of 2019, we established in Ivory
Coast an improved model for last-mile delivery to reach consumers
in secondary cities and rural areas. This model allows local
entrepreneurs to open and operate pick-up stations that also serve
as ordering points, earning a fee on packages delivered to, and a
commission on orders placed from, the outlet.
JumiaPay Development
- As of December 31, 2019, JumiaPay was available in 6 markets:
Nigeria, Egypt, Morocco, Ivory Coast, Ghana and Kenya.
- Continued expansion of digital services
powered by JumiaPay. Our JumiaPay app offers consumers an
increasing range of every-day digital services, such as utility
bills payment, airtime recharge, transport ticketing, as well as
financial services, provided by third party partners. During the
fourth quarter of 2019, we introduced an international top-up
feature whereby JumiaPay app users have the possibility to send
airtime recharges to pre-paid phone numbers internationally. We
also expanded the range of consumer financial services into savings
products with the launch of the AXA Money Market Fund in
Nigeria.
- Mastercard commercial activities
kick-off. We rolled-out “Mastercard Tuesdays” on our
platform in Kenya, Nigeria and Egypt, during which JumiaPay
consumers who pay using Mastercard enjoy an additional discount. We
also launched a campaign allowing Mastercard users to enter a
raffle to win trips and tickets to watch UEFA Champions League
matches.
- JumiaPay Business platform. We
piloted with a selected group of our sellers in Nigeria our
JumiaPay Business platform which encompasses payment, financial
services and marketing tools. While the payment and closed-loop
wallet functionalities of JumiaPay have so far been consumer
facing, this initiative allows us to explore the merchant and Small
and Mid-size Enterprise (“SMEs”) markets starting with the base of
sellers active on our platform.
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 the 2019 portfolio review, a number of
initiatives were implemented during the fourth quarter of 2019 with
a view to enhancing our business focus and optimizing our capital
allocation.
- We took the decision to exit three geographies, Cameroon,
Rwanda and Tanzania. While we continue to believe in the long-term
potential of these countries, we decided to allocate our resources
to the geographies that we currently believe present the best
opportunities to support the Company’s long-term growth and path to
profitability. Our pan-African footprint and geographical
diversification are key assets for us and we continue to invest
across our 11 geographies of operation, which collectively
represent more than 600 million people and approximately 70% of
Africa’s internet users and GDP.
- We also entered into a distribution and commercial agreement in
relation to Jumia Travel’s flight and hotel booking portals. As
part of this agreement, we will continue promoting flight and hotel
booking services on our platform, redirecting the relevant traffic
to our partner Travelstart, who will manage the sales, fulfilment
and customer service aspects of the business.
- The exited countries and the travel assets collectively
accounted for less than 10% of our GMV, Gross profit and Operating
loss for the full year 2019.
SELECTED OPERATIONAL
KPIs
1. Marketplace KPIs
For the three months ended
December 31
For the year ended December
31
2018
2019
2018
2019
GMV (€ mm)
311.0
301.2
828.2
1,097.6
Annual Active Consumers (mm)
4.0
6.1
4.0
6.1
Number of Orders (mm)
5.5
8.3
14.4
26.5
- In the fourth quarter of 2019, GMV reached €301 million
compared to €311 million over the same period in 2018, taking full
year 2019 GMV to €1.1 billion, up 33% compared to 2018. Adjusting
for perimeter changes as a result of the portfolio optimization
undertaken during the quarter, as well as previously reported
improper sales practices, GMV of the fourth quarter of 2019 would
have been €293 million, up 6% from €275 million in the fourth
quarter of 2018.
- The softer GMV growth in the fourth quarter of 2019 is a result
of a business mix rebalancing we undertook to meet two key
objectives, i) supporting our path to profitability and ii) driving
long-term usage and consumer acquisition:
- To support our path to profitability, we have reduced
promotional intensity and consumer incentives on lower consumer
lifetime value business. While most product categories experienced
GMV growth in the 20 to 50% range, phones and consumer electronics
contracted by approximately 20% on a year-over-year basis. This
aspect of the business mix rebalancing will likely continue to
negatively impact GMV development over the next two quarters. This
dynamic may be further exacerbated by the Coronavirus outbreak,
which causes challenges for our cross-border business and creates
procurement issues for our sellers.
-
To drive long term usage and consumer adoption, we have
increased our focus on every-day product categories such as Fast
Moving Consumer Goods (“FMCG”), fashion, beauty and personal care
as well as digital services which provide affordable entry points
into the Jumia ecosystem while driving repeat purchase and consumer
lifetime value.
- Annual Active Consumers reached a record 6.1 million as of
December 31, 2019, compared to 4.0 million as of December 31, 2018,
a 54% increase. Our net consumer adds in 2019 totaled 2.1 million
compared to 1.3 million in 2018, a 71% increase, as a result of our
constant focus to drive consumer adoption, the record traffic on
our platforms, which surpassed 1 billion visits in 2019 as well as
improved conversion rates.
- Orders reached 8.3 million during the fourth quarter of 2019,
up 49% compared to the fourth quarter of 2018. On a full year
basis, Orders increased by 85% to 26.5 million in 2019 compared to
14.4 million in 2018 as our consumer cohorts continued to exhibit
improving repurchase rates.
- GMV, Annual Active Consumers and Orders are reported on a gross
basis, irrespective of cancellations, failed deliveries and post
transaction returns:
- An order may be cancelled prior to shipping, either by the
seller or by the consumer. After an order is shipped, instances of
failed delivery can occur if the consumer is not available at the
time of the delivery or returns the package upon delivery.
- Post delivery, returns are allowed within a specified period of
time and subject to certain conditions.
- The rates of cancellations, failed deliveries and returns as a
percentage of our GMV decreased from approximately 35% in 2018 to
32% in 2019.
2. JumiaPay KPIs
For the three months ended
December 31
For the year ended December
31
2018
2019
2018
2019
TPV (€ million)
29.1
45.6
54.8
124.3
JumiaPay Transactions (million)
1.2
2.4
2.0
7.6
- TPV increased by 57% from €29.1million in the fourth quarter of
2018 to €45.6 million in the fourth quarter of 2019 taking total
TPV for the full year 2019 to €124.3 million, up 127% compared to
2018. On-platform penetration of JumiaPay as a percentage of GMV
reached 15.2% in the fourth quarter of 2019 compared to 9.4% over
the same period in 2018.
- In the fourth quarter of 2019 alone, JumiaPay processed 2.4
million Transactions, or more than the total number of JumiaPay
Transactions for the full year 2018. On a full year basis, JumiaPay
Transactions increased by 278% from 2.0 million Transactions in
2018 to 7.6 million Transactions in 2019.
- The ramp-up of JumiaPay on-platform is attributable to our
continuous education efforts of consumers, the expanding range of
digital services offered as part of our JumiaPay app as well as a
number of newly introduced marketing initiatives. These include
Mastercard Tuesdays discounts, cash-backs funded by card issuing
banks or the possibility to pay for purchases in 12-month
installments at no interest, offered by partner banks.
SELECTED FINANCIAL
INFORMATION
1. Revenue
For the three months
ended December 31
YoY
For the year ended
December 31
YoY
(€ million)
20181
2019
Change
20181
2019
Change
Marketplace revenue
17.3
26.0
50%
46.2
78.5
70%
Commissions
5.2
8.4
62%
14.4
25.0
74%
Fulfillment
5.8
8.9
52%
15.0
26.9
79%
Marketing & Advertising
1.1
2.3
120%
2.3
6.1
169%
Value Added Services
5.3
6.4
22%
14.6
20.5
41%
First Party revenue
25.7
23.0
(10%)
81.3
81.2
(0%)
Platform revenue
43.0
49.1
14%
127.5
159.6
25%
Non-Platform revenue
0.2
0.2
(19%)
1.5
0.8
(50%)
Total Revenue
43.3
49.3
14%
129.1
160.4
24%
1 2018 periods have been restated to
reflect the impact of the reclassification of certain types of
vouchers, consumer and partner incentives from Sales &
Advertising expense to Revenue. This reclassification amounted to
€0.5 million in the fourth quarter 2018 and €1.5 million for the
full year 2018. The cumulative effect for the nine months ended
September 30, 2019 was included in the results for the three months
ended September 30, 2019. Reclassification details have been
provided in our report on third quarter results, dated November 12,
2019.
- Marketplace revenue increased by
50% in the fourth quarter of 2019 compared to the fourth quarter of
2018 and by 70% for the full year 2019 compared to 2018. In
parallel with increased usage of our platform, we seek to build
diversified streams of monetization:
- Commissions, which are charged to our sellers, grew by 62% in
the fourth quarter of 2019 and by 74% on a full year basis.
Commissions growth outpaced GMV growth as a result of an increase
in the share of product categories with higher average commission
rates, notably fashion and beauty as well as enhanced promotional
discipline and reduced deployment of consumer incentives, some of
which are accounted for as deductions from commission revenue.
- Fulfillment, which comprises delivery fees charged to
consumers, increased by 52% in the fourth quarter of 2019 and by
79% on a full year basis in parallel with Order growth. Changes in
the packages mix, notably an increased proportion of packages
shipped from overseas sellers and increased deliveries outside
primary cities, contributed to the increase in the Fulfillment
revenue.
- Marketing & Advertising, which corresponds to the revenue
generated from the sale of a diversified range of ad solutions to
sellers and advertisers, increased by 120% in the fourth quarter of
2019 reaching €2.3 million or as much as the entire Marketing &
Advertising revenue amount for the full year 2018. The sustained
momentum in this revenue stream shows the relevance of Jumia as a
digital advertising channel to reach consumers across Africa in a
targeted manner with tailored content, driving measurable
performance.
- Value Added Services, which includes revenue from services
charged to our sellers, such as logistics services, packaging, or
content creation, increased by 22% in the fourth quarter of 2019
and by 41% on a full year basis.
- First Party revenue decreased by
10% in the fourth quarter of 2019 compared to the fourth quarter of
2018 and was stable on a full year basis, as a result of lower
share of first party sales in our business. We undertake our first
party sales in an opportunistic manner to complement the breadth of
the product assortment on our platform, usually in areas where we
see unmet consumer demand. Over time, it is our goal to reduce the
share of first party sales in favor of third-party sales at the
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 are largely eliminated at
the Gross profit level.
2. Gross Profit
For the three months ended
December 31
YoY
For the year ended December
31
YoY
(€ million)
20181
2019
Change
20181
2019
Change
Gross Profit
15.2
24.8
64%
44.2
75.9
72%
1 2018 periods have been restated to
reflect the impact of the reclassification of certain types of
vouchers, consumer and partner incentives from Sales &
Advertising expense to Revenue. This reclassification amounted to
€0.5 million in the fourth quarter 2018 and €1.5 million for the
full year 2018. The cumulative effect for the nine months ended
September 30, 2019 was included in the results for the three months
ended September 30, 2019. Reclassification details have been
provided in our report on third quarter results, dated November 12,
2019.
Gross profit increased by 64% to €24.8 million in the fourth
quarter of 2019 from €15.2 million in the fourth quarter of 2018,
taking Gross profit to €75.9 million for the full year 2019, up 72%
compared to 2018. The increase in Gross profit is a result of
increased platform monetization as well as enhanced promotional
discipline and reduced emphasis on consumer incentives, which
supported margins.
3. Fulfillment Expense
For the three months ended
December 31
YoY
For the year ended December
31
YoY
(€ million)
2018
2019
Change
2018
2019
Change
Fulfillment expense
17.2
23.9
38%
50.5
77.4
53%
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 38% in the fourth quarter of
2019 compared to the fourth quarter of 2018 and by 53% on a full
year basis.
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 the cost of delivery to a secondary city or a rural area is
higher than the cost of delivery to a main city and the cost of a
home delivery is higher than for pick-up station delivery;
- The type of goods, for example the cost of delivery is higher
for a large home appliance than a fashion accessory.
Fulfillment expense was impacted in 2019 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 drive Fulfillment expense efficiencies as
our order volumes grow.
During the fourth quarter of 2019, Gross profit after
Fulfillment expense was positive and reached €1.0 million compared
to a loss of €2.1 million in the fourth quarter of 2018
demonstrating continued progress on our path to profitability.
4. Sales & Advertising Expense
For the three months ended
December 31
YoY
For the year ended December
31
YoY
(€ million)
20181
2019
Change
20181
2019
Change
Sales & Advertising
13.6
15.5
14%
46.0
56.0
22%
1 2018 periods have been restated to
reflect the impact of the reclassification of certain types of
vouchers, consumer and partner incentives from Sales &
Advertising expense to Revenue. This reclassification amounted to
€0.5 million in the fourth quarter 2018 and €1.5 million for the
full year 2018. The cumulative effect for the nine months ended
September 30, 2019 was included in the results for the three months
ended September 30, 2019. Reclassification details have been
provided in our report on third quarter results, dated November 12,
2019.
Our Sales & Advertising expense increased by 14% to €15.5
million in the fourth quarter of 2019 from €13.6 million in the
fourth quarter of 2018, and by 22% on a full year basis as we
increased our Annual Active Consumers by 54% and Orders by 85% over
the same period. Our Sales & Advertising expense per Annual
Active Consumer decreased by 21% from €11.6 per Annual Active
Consumer in 2018 to €9.2 in 2019, as a result of continued
marketing efficiencies, increased share of traffic on the app,
which helps reduce re-engagement costs, and more effective search
marketing investments.
5. General and Administrative Expense, Technology and Content
Expense
For the three months ended
December 31
YoY
For the year ended December
31
YoY
(€ million)
2018
2019
Change
2018
2019
Change
General and Administrative ("G&A")
30.6
39.2
28%
94.9
144.5
52%
of which Share Based Compensation
("SBC")
3.7
5.3
44%
17.4
37.3
114%
of which restructuring G&A
2.2
n.m
2.2
n.m
G&A, excluding SBC and
restructuring G&A
26.9
31.7
18%
77.5
105.1
36%
Technology & Content
(“Tech”)
6.6
7.7
18%
22.4
27.3
22%
G&A, Tech, excluding SBC and
restructuring
33.5
39.4
18%
99.9
132.3
32%
In the fourth quarter of 2019, we incurred €2.2 million of
restructuring G&A expenses as part of our portfolio
optimization and headcount rationalization initiatives, including
redundancy benefits, provisions and other business termination
costs. G&A excluding SBC and restructuring G&A increased by
18% in the fourth quarter of 2019 compared to the same period the
previous year.
The following table provides a breakdown of the G&A,
excluding SBC and restructuring G&A, for the full years 2018
and 2019.
For the year ended December
31
YoY
(€ million)
2018
2019
Change
Staff costs, excluding SBC
30.2
41.9
39%
Professional fees and sub-contracts
12.7
19.4
53%
Other G&A
23.1
24.5
6%
D&A, provisions and other non-cash
expenses
11.5
19.3
67%
G&A, excluding SBC and
restructuring G&A
77.5
105.1
36%
Staff costs, excluding SBC, represented approximately 40% of
G&A, excluding SBC and restructuring G&A, for the full year
2019 and increased by 39% on a yearly basis. This was mostly as a
result of organizational enhancements undertaken in the first half
of the year to operate the business as a listed company.
Professional fees and sub-contracts, which include expenses
related to legal and audit services, represented approximately 18%
of G&A expense excluding SBC and restructuring G&A expense
for the full year 2019 and increased by 53% in 2019 compared to
2018 following our public listing.
Other G&A expense represented approximately 23% of the
G&A, excluding SBC and restructuring G&A, for the full year
2019. Other G&A expense includes office and infrastructure
costs and was affected in 2019 by the adoption of IFRS 16, which
led to changes in lease accounting, as detailed in the section
“Operating Loss and Adjusted EBITDA”.
Lastly, Depreciation & Amortization, Provisions and other
non-cash expenses represented approximately 18% of the G&A,
excluding SBC and restructuring G&A for the full year 2019.
While the adoption of IFRS 16 contributed to a reduction in
occupancy costs, it also led to an increase in Depreciation &
Amortization.
6. Operating Loss and Adjusted EBITDA
For the three months ended
December 31
YoY
For the year ended December
31
YoY
(€ million)
2018
2019
Change
2018
2019
Change
Operating loss
(52.9)
(61.1)
15%
(169.7)
(227.9)
34%
Depreciation and Amortization
0.6
2.3
268%
2.2
7.9
265%
Share-Based Compensation ("SBC")
3.7
5.3
44%
17.4
37.3
114%
Restructuring G&A1
2.2
n.m
2.2
n.m
Adjusted EBITDA, excluding
restructuring G&A
(48.6)
(51.2)
5%
(150.2)
(180.5)
20%
1Restructuring G&A relates to our
portfolio optimization and headcount rationalization initiatives
and includes redundancy benefits, provisions and other business
termination costs.
Operating loss increased by 15% to €61.1 million in the fourth
quarter of 2019 from €52.9 million in the fourth quarter of 2018,
taking Operating loss for the full year 2019 to €227.9 million, up
34% from the prior year. This is attributable to an increase in
G&A expense, which includes SBC expense, as well as an increase
in Fulfillment expense.
Adjusted EBITDA loss, excluding restructuring G&A, increased
by 5% to €51.2 million in the fourth quarter of 2019 from €48.6
million in the fourth quarter of 2018.
On January 1, 2019, we adopted IFRS
16, which changed the accounting for leases. This led to a
reduction in G&A – rental charges - expense by approximately
€1.4 million in the fourth quarter of 2019, an increase in D&A
by approximately €1.2 million and an increase in finance costs by
approximately €0.3 million resulting in a positive impact on
Adjusted EBITDA of approximately €1.4 million in the fourth quarter
of 2019, a positive impact on Operating loss of €0.2 million and a
negative impact on Net loss of €0.1 million. Prior period amounts
were not retrospectively adjusted.
7. Cash Position
At the end of December 31, 2019, we had €232.4 million of cash
on our balance sheet, including Cash & cash equivalents of
€170.0 million and €62.4 million of Term deposits.
Sales Practices Review
The sales practices review, which we launched in the second
quarter of 2019, has now been completed. In late 2019, we
identified a small number of improper orders, mostly placed in the
second quarter of 2019, in addition to the improper orders
disclosed in our report on second quarter results. In aggregate,
the improper orders identified generated less than 3% of our GMV in
2018, concentrated in the fourth quarter of 2018, and less than 2%
of our GMV in 2019. Remedial measures have been taken. We have also
implemented measures designed to prevent similar conduct in the
future and, more broadly, to strengthen our internal controls and
corporate governance. As part of our normal business, we
continually take steps to strengthen our control environment and
enhance our transaction monitoring procedures.
Legal Proceedings
In 2019, several putative class action lawsuits were filed in
the U.S. District Court for the Southern District of New York and
the New York County Supreme Court against us, certain of our
officers, the members of our Supervisory Board, the underwriters of
our initial public offering and, in New York State court, our
auditors and our authorized representative. The cases assert claims
under federal securities laws based on alleged misstatements and
omissions in connection with and following our initial public
offering. These actions remain in their preliminary stages. Two
similar putative class action lawsuits filed in the Kings County
Supreme Court were voluntarily dismissed in late 2019.
Conference Call and Webcast information
Jumia will host a conference call today, February 25, 2020 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 December 31, 2019 and 2018
For the three months
ended
For the year
ended
December 31
December 31
December 31
December 31
In thousands of EUR
2019
2018
(as restated) (a)
2019
2018
(as restated) (a)
Revenue
49,276
43,280(a)
160,408
129,058(a)
Cost of revenue
24,440
28,098
84,506
84,849
Gross profit
24,836
15,182
75,902
44,209
Fulfillment expense
23,880
17,245
77,392
50,466
Sale and advertising expense
15,490
13,603(a)
56,019
46,016(a)
Technology and content expense
7,728
6,576
27,272
22,432
General and administrative
expense
39,200
30,633
144,525
94,925
Other operating income
537
(262)
1,929
172
Other operating expense
188
(188)
496
277
Operating loss
(61,113)
(52,949)
(227,873)
(169,735)
Finance income
(953)
469
3,959
1,590
Finance costs
1,003
213
2,576
1,349
Loss before Income tax
(63,069)
(52,693)
(226,490)
(169,494)
Income tax expense
522
384
575
887
Loss for the period
(63,591)
(53,077)
(227,065)
(170,381)
Attributable to:
Equity holders of the Company
(63,461)
(54,643)
(226,689)
(170,071)
Non-controlling interests
(130)
1,566
(376)
(310)
Loss for the period
(63,591)
(53,077)
(227,065)
(170,381)
Other comprehensive income/loss
to be classified to profit or loss in subsequent periods
Exchange differences on translation
of foreign operations - net of tax
10,829
(2,652)
(19,449)
(9,312)
Other comprehensive income / (loss)
on net investment in foreign operations - net of tax
(11,131)
2,218
20,179
9,072
Other comprehensive income /
(loss)
(302)
(434)
730
(240)
Total comprehensive loss for the
period
(63,893)
(53,511)
(226,335)
(170,621)
Attributable to:
Equity holders of the
Company
(63,763)
(54,996)
(225,959)
(170,247)
Non-controlling interests
(130)
1,485
(376)
(374)
Total comprehensive loss for the
period
(63,893)
(53,511)
(226,335)
(170,621)
(a)Restatement of consumer and partner
incentives
Revenue
(516)
(1,511)
Gross profit
(516)
(1,511)
Sale and Advertising expense
(516)
(1,511)
Operating loss
-
-
(UNAUDITED)
Consolidated statement of financial
position as of December 31, 2019 and December 31,
2018
As of
December 31
December 31
In thousands of EUR
2019
2018
Assets
Non-current assets
Property and equipment
17,434
5,020
Intangible assets
47
180
Deferred tax assets
109
175
Other non-current assets
1,508
1,263
Total Non-current assets
19,098
6,638
Current assets
Inventories
9,996
9,431
Trade and other receivables
16,936
13,034
Income tax receivables
725
726
Other taxes receivable
5,395
4,172
Prepaid expenses and other current
assets
12,593
7,384
Term deposits
62,418
-
Cash and cash equivalents
170,021
100,635
Total Current assets
278,084
135,382
Total Assets
297,182
142,020
Equity and Liabilities
Equity
Share capital
156,816
133
Share premium
1,018,276
845,787
Other reserves
104,114
66,093
Accumulated losses
(1,096,134)
(862,048)
Equity attributable to the equity
holders of the Company
183,072
49,965
Non-controlling interests
(498)
(117)
Total Equity
182,574
49,848
Liabilities
Non-current liabilities
Non-current borrowings
6,127
-
Provisions for liabilities and other
charges – non-current
226
389(a)
Deferred income – non-current
1,201
-
Total Non-current liabilities
7,554
389
Current liabilities
Current borrowings
3,056
-
Trade and other payables
56,438
47,292(a)
Income tax payables
10,056
10,882
Other taxes payable
4,473
7,425(b)
Provisions for liabilities and other
charges
27,040
19,692(b)
Deferred income
5,991
6,492
Total Current liabilities
107,054
91,783
Total Liabilities
114,608
92,172
Total Equity and Liabilities
297,182
142,020
(a)reclassification of provision for
termination benefits
Provisions for liabilities and other
charges – non-current
389
Trade and other payables
(389)
(b)adoption of IFRIC 23
Income tax payables
10,735
Trade and other payables
(10,735)
(UNAUDITED)
Consolidated statement of cash flows as
of December 31, 2019 and 2018
For the three months
ended
For the year ended
December 31
December 31
December 31
December 31
In thousands of EUR
2019
2018
2019
2018
Loss before Income tax
(63,069)
(52,693)
(226,490)
(169,494)
Depreciation and amortisation of tangible
and intangible assets
2,378
635
7,906
2,166
Impairment losses on loans, receivables
and other assets
3,270
2,205
5,877
4,436
Impairment losses on obsolete
inventories
(452)
(499)
275
288
Share-based payment expense
5,333
3,702
37,267
17,409
Net (gain)/loss from disposal of tangible
and intangible assets
21
30
(149)
52
Impairment losses on investment in
subsidiaries
-
(42)
28
-
Net (gain)/loss from disposal of financial
assets at amortised cost
(6)
-
-
-
Change in provision for other liabilities
and charges
3,741
3,014
6,780
5,324(a)
Interest (income)/expenses
(380)
(51)
(682)
(17)
Net unrealized foreign exchange
(gain)/loss
1,989
(271)
(1,034)
(620)
Working capital adjustments:
(Increase)/Decrease in trade and other
receivables, prepayments and VAT receivables
(9,255)
(784)
(15,443)
(717)
(Increase)/Decrease in inventories
1,007
228
(509)
(636)
Increase/(Decrease) in trade and other
payables, deferred income and VAT payables
4,490
12,042
4,880
4,606(a)
Income taxes paid
(23)
(997)
(1,294)
(1,809)
Net cash flows used in operating
activities
(50,956)
(33,481)
(182,588)
(139,012)
Cash flows from investing
activities
Purchase of property and equipment
(2,049)
(1,240)
(5,658)
(3,508)
Proceeds from disposal of property and
equipment
39
(37)
51
20
Purchase of intangible assets
(78)
-
(109)
(27)
Proceeds from sale of intangible
assets
2
-
224
219
Payment for acquisition of subsidiary, net
of cash acquired
-
-
7
-
Interest received
262
-
795
-
Movement in other non-current assets
(111)
321
(295)
(337)
Placement of term deposits
(1)
-
(62,716)
-
Net cash flows used in investing
activities
(1,936)
(956)
(67,701)
(3,633)
Cash flows from financing
activities
Repayment of borrowings
(4)
(2,244)
(9)
(2,244)
Interest settled - financing
56
(142)
(22)
(142)
Repayment of lease interest
(476)
-
(1,176)
-
Repayment of lease liabilities
(1,222)
-
(3,769)
-
Equity transaction costs
(2,501)
-
(7,357)
-
Capital contributions received
(16)
96,013
329,161
215,985
Buy back of shares from non-controlling
interests
-
(350)
-
(350)
Net cash flows from financing
activities
(4,163)
93,277
316,828
213,249
Net decrease/increase in cash and cash
equivalents
(57,055)
58,840
66,539
70,604
Effect of exchange rate changes on cash
and cash equivalents
3
(437)
2,847
303
Cash and cash equivalents at the
beginning of the period (*)
227,073
42,232
100,635
29,728
Cash and cash equivalents at the end of
the period
170,021
100,635
170,021
100,635
(a) reclassification of provision for
termination benefits
Change in provision for other liabilities
and charges
389
389
Working capital adjustments:
Increase/(Decrease) in trade and other
payables, prepayments and VAT payables
(389)
(389)
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 Annual Active Consumers. We define GMV,
Annual Active Consumers, Number of Orders, Total Payment Volume,
JumiaPay Transactions 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
December 31
For the year ended December
31
(€ million)
2018
2019
2018
2019
Loss for the period
(53.1)
(63.6)
(170.4)
(227.1)
Income tax expense
0.4
0.5
0.9
0.6
Net Finance costs / (income)
(0.3)
2.0
(0.2)
(1.4)
Depreciation and amortization
0.6
2.3
2.2
7.9
Share-based payment expense
3.7
5.3
17.4
37.3
Adjusted EBITDA
(48.6)
(53.4)
(150.2)
(182.7)
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