Significant progress on path to
profitability
Operating loss decreased by 44%
year-over-year
Gross profit after Fulfillment expense
reached a record €6.0 million
Jumia Technologies AG (NYSE: JMIA) (“Jumia” or the “Company”)
announced today its financial results for the quarter ended June
30, 2020.
Results highlights
- Usage growth
- Annual Active Consumers reached 6.8 million, a year-over-year
increase of 40%.
- Orders reached 6.8 million, a year-over-year increase of
8%.
- GMV was €228 million, a year-over-year decrease of 13% compared
to GMV1 in the second quarter of 2019.
- Monetization development
- Gross profit reached €23.3 million, a year-over-year increase
of 38%.
- Cost efficiency
- Gross profit after Fulfillment expense reached a record €6.0
million, compared to a loss of €0.7 million in the second quarter
of 2019.
- Sales & Advertising expense was €7.2 million, the lowest
absolute amount since 2017, and a year-over-year decrease of 51%.
12-month Sales & Advertising expense per Annual Active Consumer
decreased by 38% from c. €10.8 in the second quarter of 2019 to
€6.7 in the second quarter of 2020.
- Adjusted EBITDA loss reached €32.9 million, decreasing by 26%
on a year-over-year basis. Excluding a net expense of €3.6 million
related to the class action settlement described below, Adjusted
EBITDA loss would have been €29.3 million, decreasing by 34% on a
year-over-year basis.
- Operating loss was €37.6 million, a 44% decrease
year-over-year.
- JumiaPay development
- TPV reached an all-time high of €53.6 million, a year-over-year
increase of 106%, more than doubling on-platform TPV penetration
from 9.9% of GMV in the second quarter of 2019 to 23.5% of GMV in
the second quarter of 2020.
- JumiaPay Transactions reached 2.4 million, a year-over-year
increase of 36%, representing 35.6% on-platform penetration in
terms of Orders.
_______________
1Adjusted for perimeter changes: exit of
Cameroon, Rwanda, Tanzania and the travel activities, as well as
previously reported improper sales practices.
“We have made significant progress on our path to profitability
in the second quarter of 2020, with Operating loss decreasing 44%
year-over-year to €37.6 million. This was achieved thanks to an
all-time high Gross Profit after Fulfillment expense of €6.0
million and record levels of marketing efficiency with Sales &
Advertising expense decreasing by 51% year-over-year,” commented
Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of
Jumia.
“We are navigating these uncertain times of COVID-19 pandemic
with strong financial discipline and operational agility which
positions us to emerge from this crisis stronger and even more
relevant to our consumers, sellers and communities.”
SECOND QUARTER 2020 – SELECTED BUSINESS
HIGHLIGHTS
Driving usage and
monetization
- During the second quarter of 2020, we celebrated the 8th Jumia
Anniversary with a commercial campaign themed “Stronger Together”
aimed at supporting our communities in these challenging times. Our
focus was to offer the broadest possible range of relevant products
at the best prices, in partnership with a number of high-profile
brands who made marketing investments on the Jumia platform as part
of the event. Participating brands included: L’Oreal, Unilever,
Nestle, Coca-Cola, P&G, Reckitt Benckiser, Henkel, Samsung,
Xiaomi, Nokia, Intel, HP, Philips and many more.
Generating cost
efficiencies
- During the second quarter of 2020, we continued implementing a
number of cost efficiency initiatives, including on the logistics
and fulfillment front.
- Changed the volume pricing model from a price per successfully
delivered package to a price per successful stop which led to a c.
8% reduction in cost per order for a given route. Our third-party
logistics partners are now paid per successful stop at customer
address, regardless of the number of packages included in the
delivery.
- Introduced a network of proximity warehouses (“mother-daughter”
warehouse system) dedicated to essential products. This helps bring
the assortment closer to customers, thereby reducing delivery time
as well as last mile delivery costs.
Commitment to community
- As a number of informal market sellers saw their livelihoods
threatened by the onset of the COVID-19 crisis, Jumia partnered
with the United Nations Development Programme (“UNDP”) to allow
these sellers to reach consumers online. While the UNDP provided
smartphones, airtime and data to selected market sellers, Jumia
trained these sellers on the basics of selling online. This
initiative was piloted in Uganda and brought onboard more than
1,000 sellers who are now able to offer fresh produce to consumers
via the Jumia Food on-demand delivery app.
Litigation update
- As previously disclosed, 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 and other
defendants, including current and former members of our supervisory
and management boards. The cases assert claims under federal
securities laws based on alleged misstatements and omissions in
connection with, and following, our initial public offering. On
August 11, 2020, we reached an agreement to fully resolve all of
the actions, subject to standard conditions including court
approval. Under this agreement, in which the defendants do not
admit any liability or wrongdoing, Jumia will make a settlement
payment of $5 million, $1 million of which will be funded by
insurance coverage.
SELECTED OPERATIONAL
KPIs
1. Marketplace KPIs
For the three months
ended
For the six months
ended
June 30,
YoY
June 30,
YoY
2019
2020
Change
2019
2020
Change
Annual Active Consumers (mm)
4.8
6.8
40.1
%
4.8
6.8
40.1
%
Orders (mm)
6.2
6.8
8.4
%
11.3
13.2
17.0
%
GMV (€ mm)
263.1
(1)
228.3
(13.2)
%
476.9
(1)
418.0
(12.4)
%
_______________
(1) Adjusted for perimeter changes: exit
of Cameroon, Rwanda, Tanzania and the travel activities and
improper sales practices.
- Annual Active Consumers reached 6.8 million in the second
quarter of 2020, up 40% compared to the second quarter of 2019,
Orders reached 6.8 million up 8%, while GMV was €228.3 million,
down 13% on a year-over-year basis.
- There were a number of drivers behind the usage performance
during the quarter:
- We decided to reduce our Sales & Advertising expense by 51%
year-over-year in light of the macro uncertainty and to support our
path to profitability, allowing us to drive usage with a high level
of marketing efficiency.
- The effects of the business mix rebalancing continued playing
out during the second quarter of 2020, affecting GMV in particular.
To support our path to profitability, we decreased promotional
intensity and consumer incentives on lower consumer lifetime value
business while increasing our focus on every-day product categories
to drive consumer adoption and usage. In the second quarter of
2020, the sharpest year-over-year GMV contraction was registered in
the phones category. The fastest growing categories in GMV terms
were beauty & personal care, which includes hygiene products
sold as part of the fight against COVID-19, alongside Fast Moving
Consumers Goods (“FMCG”) and digital services which are every-day
services such as airtime recharge or utility bills payments offered
on our JumiaPay app. The strong momentum of essential, every-day
categories on our platform speaks to the relevance of Jumia as part
of the every-day life of consumers in Africa.
- The COVID-19 pandemic continued to affect the business and its
impact varied greatly from one country to the other:
- In Nigeria and South Africa, we faced significant disruption as
a result of movement restriction. This disruption persisted during
the early part of the second quarter of 2020, before gradually
easing towards the later part of the quarter. Our food delivery
business, Jumia Food, which was negatively impacted by restaurant
shutdowns starting mid-March, resumed normal operations in late May
/ early June in most cities where we operate the service.
- Across the majority of our addressable market, we experienced
no meaningful change in consumer behavior, aside from increased
demand for essential and every-day products and reduced appetite
for higher ticket size, discretionary purchases. The nature of
lockdown measures put in place consisted mostly of localized
restrictions of movement and partial curfews rather than nationwide
lockdowns, with the former leading to less drastic changes in
consumer lifestyles and behavior than all-encompassing, nationwide
lockdowns. In selected countries, including in Morocco and Tunisia,
where nationwide lockdowns were implemented, we experienced a surge
in volumes starting mid-March with sustained momentum throughout
the second quarter of 2020.
- Across all geographies, we have seen increased demand from
brands and sellers to join and expand their business on our
platform as the COVID-19 crisis further established e-commerce as
an important route to market.
2. JumiaPay KPIs
For the three months
ended
For the six months
ended
June 30,
YoY
June 30,
YoY
2019
2020
Change
2019
2020
Change
TPV (€ million)
26.0
53.6
106.1
%
46.7
89.0
90.7
%
JumiaPay Transactions (million)
1.8
2.4
36.3
%
3.1
4.7
53.6
%
- TPV accelerated by 106% from €26.0 million in the second
quarter of 2019 to an all-time high of €53.6 million in the second
quarter of 2020, surpassing the record set during the fourth
quarter of 2019 of €45.6 million. On-platform penetration of
JumiaPay as a percentage of GMV increased to 23.5% in the second
quarter of 2020, more than twice the level of penetration in the
second quarter of 2019 of 9.9%.
- JumiaPay Transactions increased by 36% from 1.8 million in the
second quarter of 2019 to 2.4 million in the second quarter of
2020, with triple digit growth of Transactions above €10, including
prepaid purchases on the Jumia physical goods marketplace and Jumia
Food platforms. Overall, 35.6% of Orders placed on the Jumia
platform in the second quarter of 2020 were paid for using
JumiaPay, compared to 28.3% in the second quarter of 2019.
SELECTED FINANCIAL
INFORMATION
For the three months
ended
For the six months
ended
June 30,
YoY
June 30,
YoY
(€ million)
2019
2020
Change
2019
2020
Change
Revenue
38.8
34.9
(10.0)
%
70.2
64.2
(8.6)
%
Marketplace revenue
17.1
23.6
38.2
%
32.8
42.7
30.4
%
Commissions
5.4
9.0
68.0
%
10.5
16.0
51.7
%
Fulfillment
5.7
7.6
33.8
%
10.7
14.1
31.7
%
Marketing & Advertising
1.3
2.0
49.7
%
2.2
3.2
43.4
%
Value Added Services
4.7
4.9
6.0
%
9.3
9.5
1.6
%
First Party revenue
21.6
11.0
(49.1)
%
37.1
20.9
(43.8)
%
Platform revenue
38.7
34.6
(10.5)
%
69.9
63.6
(9.0)
%
Non-Platform revenue
0.1
0.3
149.9
%
0.3
0.6
84.3
%
Gross Profit
16.8
23.3
38.2
%
32.1
41.7
29.8
%
Fulfillment expense
(17.6)
(17.3)
(1.7)
%
(32.8)
(33.2)
1.2
%
Sales & Advertising expense
(14.9)
(7.2)
(51.4)
%
(26.8)
(16.1)
(39.8)
%
Technology and Content expense
(6.7)
(7.1)
5.4
%
(12.6)
(14.2)
13.3
%
General and Administrative expense
("G&A")
(44.9)
(31.1)
(30.8)
%
(72.7)
(61.5)
(15.4)
%
of which Share Based Compensation
("SBC")
(20.5)
(2.6)
(87.3)
%
(24.8)
(8.6)
(65.5)
%
G&A expense, excluding SBC
(24.4)
(28.5)
16.8
%
(47.8)
(52.9)
10.6
%
of which settlement expense
(4.5)
n.m
(4.5)
n.m
Adjusted EBITDA
(44.4)
(32.9)
(25.9)
%
(83.8)
(68.5)
(18.3)
%
of which net settlement expense
(3.6)
n.m
(3.6)
n.m
Operating loss
(66.7)
(37.6)
(43.6)
%
(112.1)
(81.3)
(27.5)
%
Revenue
- Marketplace revenue reached €23.6 million in the second quarter
of 2020, up 38% compared to the second quarter of 2019. This was
mostly driven by an acceleration in Commissions and Marketing &
Advertising revenue which increased by 68% and 50% year-over-year
respectively. Commissions grew despite a decrease in GMV as a
result of increased proportion in the mix of higher commission rate
categories including fashion, beauty or FMCG. Marketing &
Advertising continues to experience robust momentum as advertisers
shift an increasing share of their spend from offline to online,
favoring direct response formats.
- First Party revenue decreased by 49% in the second quarter of
2020 compared to the second quarter of 2019. As our marketplace
continues to gain depth, we are able to undertake fewer sales on a
first party basis. 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.
Gross Profit
Gross profit increased by 38% to €23.3 million in the second
quarter of 2020 from €16.8 million in the second quarter of 2019 as
a result of the increase in Marketplace revenue
Fulfillment Expense
- Fulfillment expense decreased by 2% in the second quarter of
2020 on a year-over-year basis while Orders increased by 8% over
the same period. A number of operational improvements drove
fulfillment expense efficiencies, including a change in the volume
pricing model from a cost per package to a cost per stop as well as
productivity enhancements in our fulfillment centers. Another
contributing factor was a change in our mix of packages, with
reduced proportion of cross-border packages and packages shipped
outside primary cities.
- During the second quarter of 2020, Gross profit after
Fulfillment expense reached a record €6.0 million compared to a
loss of €0.7 million in the second quarter of 2019, demonstrating
continued unit economics improvement as we grow usage on our
platform.
Sales & Advertising Expense
- Sales & Advertising expense decreased by 51% from €14.9
million in the second quarter of 2019 to €7.2 million in the second
quarter of 2020, its lowest level in more than 3 years. This is
driving strong marketing efficiency with Sales & Advertising
expense per Annual Active Consumer decreasing by 38%, from €10.8
per Annual Active Consumer in the second quarter of 2019 to €6.7 in
the second quarter of 2020.
- This development is partly attributable to continued
enhancements to our performance marketing strategy across search
and social media channels, notably through more granular
segmentation of our target market with differentiated campaigns and
content for each segment.
General and Administrative Expense
- General & Administrative expense excluding SBC reached
€28.5 million, up 17% on a year-over-year basis. The increase was
due to a settlement provision of €4.5 million.
- Excluding the settlement provision, General &
Administrative expense excluding SBC would have reached €24.0
million, down 2% on a year-over-year basis, mostly attributable to
the cost rationalization initiatives undertaken starting from the
end of 2019.
Adjusted EBITDA
- Adjusted EBITDA loss was €32.9 million in the second quarter of
2020, decreasing 26% on a year-over-year basis, demonstrating
meaningful progress on our path to profitability.
- Net settlement expense included in the Adjusted EBITDA amounted
to €3.6 million and is calculated as a settlement provision of €4.5
million accounted for in G&A, net of insurance reimbursement of
€0.9 million accounted for in Other Income. Excluding the net
settlement expense of €3.6 million, Adjusted EBITDA loss would have
been €29.3 million, decreasing by 34% on a year-over-year
basis.
Operating loss
Operating loss was €37.6 million in the second quarter of 2020,
decreasing 44% on a year-over-year basis, demonstrating meaningful
progress on our path to profitability.
Cash Position
At the end of June 30, 2020, we had €174.3 million of cash on
our balance sheet. During the second quarter of 2020, our cash
utilization, which corresponds to the change in Cash & cash
equivalents taking into account exchange rate effects, was €16.8
million, a 69% decrease year-over-year. Cash utilization during the
second quarter of 2020 was supported by a working capital inflow of
€13.0 million resulting mainly from a longer payables cycle and
improved accounts receivable management.
GUIDANCE
The ongoing COVID-19 pandemic as well as the ensuing economic
challenges result in substantial uncertainty concerning our
business and financial outlook.
We expect the effects of the business mix rebalancing to
continue to play out over the course of 2020. Any supply and
logistics challenges that we may encounter as a result of the
COVID-19 pandemic may further exacerbate such effects. As a result,
we currently expect continued GMV softness over the course of 2020,
with better Order and Annual Active Consumers growth, on a
year-over-year basis.
We remain committed to reducing our Adjusted EBITDA loss in
absolute terms in 2020 compared to 2019.
GOVERNANCE UPDATE
Effective as of August 12, 2020, Matthew Odgers has resigned
from the Supervisory Board of the Company. Jonathan D. Klein will
take Mr. Odgers' place as chair of the Corporate Governance &
Nominations Committee
CONFERENCE CALL AND WEBCAST
INFORMATION
Jumia will host a conference call today, August 12, 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): 1-844-750-4870 Participant
International Dial in: 1-412-317-6016 Canada Toll Free:
1-855-669-9657 UK Toll Free: 0800-279-9489
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 June 30, 2019 and
2020
For the three months
ended
For the six months
ended
June 30,
June 30,
June 30,
June 30,
In thousands of EUR
2019
2020
2019
2020
Revenue
38,800
34,939
70,217
64,191
Cost of revenue
21,954
11,667
38,130
22,527
Gross profit
16,846
23,272
32,087
41,663
Fulfillment expense
17,578
17,281
32,805
33,195
Sale and advertising expense
14,866
7,218
26,755
16,095
Technology and content expense
6,692
7,051
12,560
14,228
General and administrative expense
44,887
31,072
72,664
61,462
Other operating income
618
1,839
679
2,153
Other operating expense
91
59
131
153
Operating loss
(66,651
)
(37,570
)
(112,149
)
(81,316
)
Finance income
(85
)
(705
)
521
1,933
Finance costs
845
605
1,676
1,665
Loss before Income tax
(67,581
)
(38,880
)
(113,303
)
(81,048
)
Income tax expense
181
479
261
594
Loss for the period
(67,761
)
(39,359
)
(113,565
)
(81,642
)
Attributable to:
Equity holders of the Company
(67,674
)
(39,306
)
(113,411
)
(81,523
)
Non-controlling interests
(87
)
(53
)
(154
)
(119
)
Loss for the period
(67,761
)
(39,359
)
(113,565
)
(81,642
)
Other comprehensive income/loss to be
classified to profit or loss in subsequent periods
Exchange differences on translation of
foreign operations - net of tax
1,366
19,749
(10,506
)
29,852
Other comprehensive income / (loss) on net
investment in foreign operations - net of tax
(1,444
)
(19,782
)
10,785
(30,489
)
Other comprehensive income / (loss)
(78
)
(33
)
279
(637
)
Total comprehensive loss for the
period
(67,839
)
(39,392
)
(113,286
)
(82,278
)
Attributable to:
Equity holders of the Company
(67,753
)
(39,339
)
(113,133
)
(82,157
)
Non-controlling interests
(86
)
(53
)
(153
)
(122
)
Total comprehensive loss for the
period
(67,839
)
(39,392
)
(113,286
)
(82,278
)
(UNAUDITED)
Consolidated
statement of financial position as of December 31, 2019 and June
30, 2020
As of
December 31,
June 30,
In thousands of EUR
2019
2020
Assets
Non-current assets
Property and equipment
17,434
16,931
Intangible assets
47
22
Deferred tax assets
109
102
Other non-current assets
1,508
1,392
Total Non-current assets
19,098
18,447
Current assets
Inventories
9,996
9,077
Trade and other receivables
16,936
11,436
Income tax receivables
725
793
Other taxes receivables
5,395
5,995
Prepaid expenses
12,593
7,684
Term deposits and other current assets
62,418
641
Cash and cash equivalents
170,021
174,326
Total Current assets
278,084
209,952
Total Assets
297,182
228,399
Equity and Liabilities
Equity
Share capital
156,816
159,400
Share premium
1,018,276
1,018,276
Other reserves
104,114
109,480
Accumulated losses
(1,096,134
)
(1,178,043
)
Equity attributable to the equity
holders of the Company
183,072
109,113
Non-controlling interests
(498
)
(614
)
Total Equity
182,574
108,499
Liabilities
Non-current liabilities
Non-current borrowings
6,127
6,710
Provisions for liabilities and other
charges – non-current
226
278
Deferred income – non-current
1,201
1,016
Total Non-current liabilities
7,554
8,004
Current liabilities
Current borrowings
3,056
3,056
Trade and other payables
56,438
49,965
Income tax payables
10,056
9,749
Other taxes payable
4,473
8,104
Provisions for liabilities and other
charges
27,040
33,855
Deferred income
5,991
7,167
Total Current liabilities
107,054
111,896
Total Liabilities
114,608
119,900
Total Equity and Liabilities
297,182
228,399
(UNAUDITED)
Consolidated
statement of cash flows as of June 30, 2019 and 2020
For the three months
ended
For the six months
ended
June 30,
June 30,
June 30,
June 30,
In thousands of EUR
2019(1)
2020
2019(1)
2020
Loss before Income tax
(67,581
)
(38,880
)
(113,303
)
(81,048
)
Depreciation and amortization of tangible
and intangible assets
1,778
2,084
3,473
4,212
Impairment losses on loans, receivables
and other assets
1,588
2,128
2,046
3,245
Impairment losses on obsolete
inventories
149
162
353
397
Share-based payment expense
20,522
2,607
24,834
8,580
Net (gain)/loss from disposal of tangible
and intangible assets
(169
)
—
(165
)
10
Net (gain)/loss from disposal of financial
assets at amortized cost
—
—
6
—
Change in provision for other liabilities
and charges
942
5,749
1,546
6,984
Interest (income)/expenses
(48
)
219
195
152
Net unrealized foreign exchange
(gain)/loss
961
1,439
887
69
(Increase)/Decrease in trade and other
receivables, prepayments and VAT receivables
(5,090
)
5,308
(12,435
)
6,660
(Increase)/Decrease in inventories
(3,127
)
(3
)
(4,790
)
(793
)
Increase/(Decrease) in trade and other
payables, deferred income and VAT payables
1,480
7,672
9,527
1,217
Income taxes paid
(1,073
)
(481
)
(1,126
)
(947
)
Net cash flows used in operating
activities
(49,668
)
(11,996
)
(88,952
)
(51,262
)
Cash flows from investing
activities
Purchase of property and equipment
(1,449
)
(459
)
(2,127
)
(912
)
Proceeds from disposal of property and
equipment
8
1
8
3
Purchase of intangible assets
(1
)
(9
)
(1
)
(9
)
Proceeds from sale of intangible
assets
219
—
219
—
Payment for acquisition of subsidiary, net
of cash acquired
45
—
(2
)
—
Interest received
488
37
488
127
Movement in other non-current assets
(237
)
20
(177
)
78
Movement in term deposits and other
current assets
(62,715
)
(211
)
(62,715
)
62,067
Net cash flows used in investing
activities
(63,642
)
(621
)
(64,307
)
61,354
Cash flows from financing
activities
Proceeds from borrowings
(3
)
—
—
—
Interest settled - financing
—
(27
)
—
(47
)
Repayment of lease interest
(444
)
(384
)
(767
)
(662
)
Repayment of lease liabilities
(558
)
(1,244
)
(1,336
)
(2,528
)
Equity transaction costs
(1,008
)
(308
)
(3,747
)
(308
)
Capital contributions
254,172
311
329,172
311
Net cash flows from financing
activities
252,159
(1,652
)
323,322
(3,234
)
Net decrease/increase in cash and cash
equivalents
138,849
(14,269
)
170,063
6,858
Effect of exchange rate changes on cash
and cash equivalents
318
(2,551
)
698
(2,553
)
Cash and cash equivalents at the
beginning of the period
132,229
191,146
100,635
170,021
Cash and cash equivalents at the end of
the period
271,396
174,326
271,396
174,326
_______________
(1) Reclassification of cash to 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, including, without
limitation, the risks described under Item 3. “Key Information—D.
Risk Factors,” in our Annual Report on Form 20-F as filed with the
US Securities and Exchange Commission. 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 Annual Active Consumers, Orders and GMV. We
define Annual Active Consumers, Orders, GMV, Total Payment Volume,
JumiaPay Transactions and Adjusted EBITDA as follows:
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.
We believe that Annual Active Consumers is a useful indicator
for adoption of our offering by consumers in our markets.
Orders corresponds to the total
number of orders for products and services on our platform,
irrespective of cancellations or returns, for the relevant
period.
We believe that the number of orders is a useful indicator to
measure the total usage of our platform, irrespective of the
monetary value of the individual transactions.
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.
We believe that GMV is a useful indicator for the value
transacted on our platform that is not influenced by shifts in our
sales between first-party and third-party sales or the method of
payment.
We use Annual Active Consumers, Orders and GMV as some of many
indicators to monitor usage of our platform.
Total Payment Volume (“TPV”)
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, for the relevant period.
We believe that TPV provides a useful indicator of the
development, and adoption by consumers, of our payment services
offerings.
JumiaPay Transactions corresponds
to the total number of orders for products and service completed
using JumiaPay, irrespective of cancellations or returns, for the
relevant period.
We believe that JumiaPay Transactions provides a useful
indicator of the development, and adoption by consumers, of our
payment services offerings for orders on our platform irrespective
of the monetary value of the individual transactions.
We use TPV and the number of JumiaPay Transactions to measure
the development of our payment services.
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
For the six months
ended
June 30,
June 30,
(€ million)
2019
2020
2019
2020
Loss for the period
(67.8
)
(39.4
)
(113.6
)
(81.6
)
Income tax expense
0.2
0.5
0.3
0.6
Net Finance costs / (income)
0.9
1.3
1.2
(0.3
)
Depreciation and amortization
1.8
2.1
3.5
4.2
Share-based payment expense
20.5
2.6
24.8
8.6
Adjusted EBITDA
(44.4
)
(32.9
)
(83.8
)
(68.5
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200812005165/en/
Safae Damir Head of Investor Relations
investor-relations@jumia.com
Jumia Technologies (NYSE:JMIA)
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