Continued strong growth of topline
drivers and 94% increase in Gross profit
Continued delivery of cost efficiency
improvements and focus on JumiaPay
Jumia Technologies AG (NYSE: JMIA) (“Jumia” or the Company)
announced today its financial results for the quarter ended June
30, 2019.
“We continue to deliver on our financial strategy of generating
strong growth of our topline drivers, while accelerating
monetization, driving cost efficiencies and developing JumiaPay.
During the second quarter of 2019, our GMV increased by 69%
year-on-year and our Gross profit grew by 94%. Our Adjusted EBITDA
loss as a percentage of GMV decreased by 562 basis points (5.62
percentage points) and our Operating loss, amounting to €66.7
million, decreased as a percentage of GMV by 148 basis points (1.48
percentage points)” commented Sacha Poignonnec and Jeremy Hodara,
co-CEOs of Jumia. “These results reflect our continued focus on
offering a relevant and engaging online shopping and lifestyle
destination for consumers, while providing our sellers with an
attractive value proposition and a platform to grow their
businesses. We remain focused on all aspects of our growth
strategy, particularly JumiaPay, as we continue to drive its usage
in our markets.”
Business and Financial highlights
- Growth momentum in topline drivers
- GMV increased this quarter by 69% compared to the second
quarter of 2018, due to a variety of factors, including strong
marketplace growth and robust consumer acquisition and
re-engagement momentum.
- The number of Active Consumers at June 30, 2019 was 4.8
million, up from 3.2 million a year ago and 4.3 million at the end
of the first quarter of 2019.
- These increases are a result of our continued focus on
selection, price and convenience, as we strive to be the preferred
online shopping destination for consumers in Africa for all their
daily needs. During the second quarter of 2019, we continued to
increase the assortment available on our platform and to engage
with consumers through relevant local commercial campaigns such as
our “Mobile Week” and “Ramadan” campaigns.
- Increased monetization
- In parallel with the strong increase in GMV and Active
Consumers, Marketplace revenue increased by 90% compared to the
second quarter of 2018 as we continued to drive monetization from
diversified streams of revenue including Commissions, Fulfillment,
Value Added Services and Marketing & Advertising services.
- Gross profit also grew faster than GMV, increasing by 94%
compared to the second quarter of 2018, as a result of the
increased monetization rate.
- We continued to drive monetization in a gradual manner,
introducing attractive services to our sellers aimed at supporting
the growth of their businesses. In the second quarter of 2019, we
placed a particular focus on our Marketing & Advertising
revenue stream by continuing to develop an attractive suite of
marketing products. Marketing & Advertising revenue grew by
490% year over year and represented 8% of Marketplace revenue in
the second quarter of 2019 compared to 2% of Marketplace revenue in
the second quarter of 2018.
- Cost efficiencies
- We continued to balance strong growth with cost discipline.
While delivering strong growth of our topline drivers GMV and
Active Consumers, our Sales & Advertising expense as a
percentage of GMV decreased by 76 basis points (“bps”), from 6.2%
of GMV in the second quarter of 2018 to 5.4% in the second quarter
of 2019, reflecting the strong Jumia brand awareness and
attractiveness of our platform to consumers.
- Adjusted EBITDA loss as a percentage of GMV improved from
negative 21.4% in the second quarter of 2018 to negative 15.8% in
the second quarter of 2019.
- Development of JumiaPay
- JumiaPay remained a key focus area and it is now offered in six
countries - Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya.
Collectively, these six countries represented a combined population
of almost 440 million people in 2018, according to data from the
United Nations Population Division.
- We have also expanded the scope of JumiaPay beyond our physical
goods marketplace. As of December 31, 2018, JumiaPay was only
available within our physical goods marketplace. It is now also
available within our on-demand services, Jumia Food, and hotel
booking portals, Jumia Travel, in selected countries.
- Lastly, we continued to expand the range of financial and
digital services available from third parties, powered by JumiaPay,
offering our consumers an increasing range of relevant every day
services. In Nigeria for instance, consumers can now access
micro-loans offered by a local fintech startup, alongside event
tickets offered by a local event ticketing provider. In Egypt, in
the second quarter of 2019, we started distributing services from a
local deals provider allowing consumers to purchase their vouchers
on the Jumia platform, using JumiaPay.
Selected Operational KPIs
2018
2019
Second Quarter
Second Quarter
GMV1 (€ million)
166.3
280.9
Active Consumers2
(million)
3.2
4.8
1 GMV corresponds to the total value of orders including
shipping fees, value added tax, and before deductions of any
discounts or vouchers, irrespective of cancellations or
returns.
2 Active Consumers means unique consumers who placed an order on
our marketplace within the 12-month period preceding the relevant
date (i.e., June 30, 2018 or June 30, 2019), irrespective of
cancellations or returns
- GMV increased by 68.9% from €166 million in the second quarter
of 2018 to €281 million in the second quarter of 2019, on the back
of the growth of Active Consumers and spend per Active
Consumer.
- The number of LTM Active Consumers as of June 30, 2019 was 4.8
million, up from 3.2 million a year ago and 4.3 million at the end
of the first quarter of 2019. This corresponds to a quarterly net
addition of 0.589 million consumers compared to a quarterly net
addition of 0.211 million consumers over the same period last year.
The acceleration in consumer growth is a reflection of the
increasing relevance of our platform that drives continued consumer
adoption and engagement.
Selected Financial Information
- Revenue
The following table shows a breakdown of revenue, for the second
quarters of 2018 and 2019.
For the three months ended
June 30
YoY
(€ million)
2018
2019
Change
Marketplace revenue
9.2
17.5
89.7%
Commissions
3.0
5.8
91.8%
Fulfillment
2.8
5.7
102.6%
Marketing & Advertising
0.2
1.3
489.5%
Value Added Services
3.2
4.7
47.4%
First Party revenue
15.5
21.6
39.2%
Platform revenue
24.7
39.1
58.0%
Non-Platform revenue
0.0
0.1
265.9%
Revenue
24.8
39.2
58.3%
- Marketplace revenue increased by
89.7% in the second quarter of 2019 compared to the second quarter
of 2018, on the back of strong revenue growth across all components
of Marketplace revenue, demonstrating our ability to monetize the
platform as GMV and Active Consumers increase.
- Commissions, which are charged to our sellers, grew by
91.8%.
- Fulfillment, which are delivery fees charged to consumers, grew
by 102.6%.
- Marketing & Advertising, which include performance
marketing campaigns, or the placement of banners on our platform,
grew by 489.5%. This strong growth was driven by an acceleration in
brand marketing contributions, aimed at promoting the visibility of
their products on our platform.
- Value Added Services, which include revenue from services
charged to our sellers such as logistics services, packaging, or
content creation, grew by 47.4%.
- First Party revenueincreased by
39.2% in the second quarter of 2019 compared to the second 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.
- 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. 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.
2. Gross Profit
For the three months
ended June 30
YoY
(€ million)
2018
2019
Change
Gross profit
8.9
17.3
93.6%
As % of GMV
5.4%
6.2%
Gross profit increased by 93.6% from €8.9 million in the second
quarter of 2018 to €17.3 million in the second quarter of 2019, as
a result of increased platform monetization.
3. Fulfillment Expense
For the three months ended
June 30
YoY
(€ million)
2018
2019
Change
Fulfillment expense
(10.3)
(17.6)
69.8%
As % of GMV
6.2%
6.3%
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 69.8% in the second quarter
of 2019 compared to the second 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
4. Sales & Advertising Expense
For the three months
ended June 30
YoY
(€ million)
2018
2019
Change
Sales & Advertising expense
10.3
15.3
48.3%
As % of GMV
6.2%
5.4%
Our Sales & Advertising expense increased by 48.3% to €15.3
million in the second quarter of 2019 from €10.3 million in the
second quarter of 2018, while we were able to increase our Active
Consumers by 51.4% and our GMV by 68.9% over the same period. As a
result, Sales & Advertising expense as a percentage of GMV,
decreased from 6.2% in the second quarter of 2018 to 5.4% in the
second quarter of 2019, demonstrating the relevance of our
marketing strategy as well as the continued user adoption of our
platform.
5. General and Administrative Expense, Technology and Content
Expense
For the three months
ended June 30
YoY
(€ million)
2018
2019
Change
General and Administrative ("G&A")
expense
24.5
44.9
83.5%
Share-Based Compensation ("SBC")
expense
(5.8)
(20.5)
253.3%
G&A expense, excluding SBC
18.6
24.4
30.6%
As % of GMV
11.2%
8.7%
Technology & Content
expense
5.4
6.7
22.8%
As % of GMV
3.3%
2.4%
G&A, Technology & Content
expense, excluding SBC
24.1
31.1
28.9%
As % of GMV
14.5%
11.1%
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, consulting expense, audit expense, utilities cost, insurance
and other overhead expense.
General and Administrative expense excluding SBC increased by
30.6% from €18.6 million in the second quarter of 2018 to €24.4
million in the second quarter of 2019. As a percentage of GMV,
General and Administrative expense excluding SBC, decreased from
11.2% in the second quarter of 2018 to 8.7% in the second quarter
of 2019 as a result of operating leverage.
Technology and Content expense increased by 22.8% from €5.4
million in the second quarter of 2018 to €6.7 million in the second
quarter of 2019. As a percentage of GMV, Technology and Content
expense decreased from 3.3% in the second quarter of 2018 to 2.4%
in the second quarter of 2019.
6. Operating Loss and Adjusted EBITDA
For the three months ended
June 30
(€ million)
2018
2019
Operating loss
(41.9)
(66.7)
Depreciation and amortization
0.5
1.8
Share-Based Compensation ("SBC")
expense
5.8
20.5
Adjusted EBITDA
(35.6)
(44.4)
As % of GMV
(21.4%)
(15.8%)
Operating loss increased from €41.9 million in the second
quarter of 2018 to €66.7 million in the second quarter of 2019
mainly due to an increase in SBC expense.
Adjusted EBITDA loss, as a percentage of GMV decreased from
negative 21.4% in the second quarter of 2018 to negative 15.8% in
the second quarter of 2019 as a result of a higher Gross profit
margin as a percentage of GMV, marketing efficiencies and operating
leverage improving General and Administrative and Technology and
Content expenses as a percentage of GMV.
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 €1.2 million
in the second quarter of 2019, an increase in Depreciation and
amortization by approximately €1 million and an increase in finance
costs by approximately €0.3 million resulting in a positive impact
on Adjusted EBITDA of approximately €1.2 million in the second
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.
SBC expense amounted to €20.5 million this quarter. The increase
in SBC expense during the second quarter of 2019 is mainly related
to the Jumia Initial Public Offering, completed in April 2019,
triggering the vesting of some of the stock options granted under
the 2016 Stock Option Plan. The SBC expense of the second quarter
of 2019 also takes into account the 2019 grants.
The following table summarizes the forecasts of SBC expense over
the coming quarters, based on the amortization of the 2016 and 2019
grants.
2019
(€ thousand)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
SBC expense
4,312
20,522
6,400
6,400
Sales Practices Review
As disclosed in our prospectus dated April 11, 2019, we received
information alleging that some of our independent sales
consultants, members of our JForce program in Nigeria, may have
engaged in improper sales practices. In response, we launched a
review of sales practices covering all our countries of operation
and data from January 1, 2017 to June 30, 2019.
In the course of this review, we identified several JForce
agents and sellers who collaborated with employees in order to
benefit from differences between commissions charged to sellers and
higher commissions paid to JForce agents. The transactions in
question generated approximately 1% of our GMV in each of 2018 and
the first quarter of 2019 and had virtually no impact on our 2018
or 2019 financial statements. We have terminated the employees and
JForce agents involved, removed the sellers implicated and
implemented measures designed to prevent similar instances in the
future. The review of this matter is closed.
More recently, we have also identified instances where improper
orders were placed, including through the JForce program, and
subsequently cancelled. Based on our findings to date, we believe
that the transactions in question generated approximately 2% of our
GMV in 2018, concentrated in the fourth quarter of 2018,
approximately 4% in the first quarter of 2019 and approximately
0.1% in the second quarter of 2019. These 0.1% have already been
adjusted for in the reported GMV figure for the second quarter of
2019. These transactions had no impact on our financial statements.
We have suspended the employees involved pending the outcome of our
review and are implementing measures designed to prevent similar
instances in the future. We continue our review of this matter.
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 and the Kings 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, August 21, 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 June 30, 2019 and 2018
For the three months ended For the six
months ended
June 30
2019
June 30
2018
June 30
2019
June 30
2018
In thousands of EUR Revenue
39,234
24,786
71,076
53,134
Cost of revenue
21,954
15,858
38,130
35,611
Gross profit
17,280
8,928
32,946
17,523
Fulfillment expense
17,578
10,349
32,805
19,899
Sales and advertising expense
15,301
10,314
27,614
21,255
Technology and content expense
6,692
5,447
12,560
10,539
General and administrative expense
44,887
24,459
72,664
41,830
Other operating income
618
(4)
679
101
Other operating expense
91
263
131
303
Operating loss
(66,651)
(41,908)
(112,149)
(76,202)
Finance income
(85)
(28)
521
556
Finance costs
845
141
1,676
416
Loss before Income tax
(67,581)
(42,077)
(113,303)
(76,062)
Income tax expense
181
228
261
342
Loss for the period
(67,761)
(42,305)
(113,565)
(76,404)
Attributable to: Equity holders of
the Company
(67,674)
(41,789)
(113,411)
(75,390)
Non-controlling interests
(87)
(516)
(154)
(1,014)
Loss for the period
(67,761)
(42,305)
(113,565)
(76,404)
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
(10,874)
(10,506)
(4,286)
Other comprehensive income / (loss) on net investment in
foreign operations - net of tax
(1,444)
11,189
10,785
4,550
Other comprehensive income / (loss)
(78)
315
279
264
Total comprehensive loss for the period
(67,839)
(41,990)
(113,286)
(76,140)
Attributable to: Equity holders of
the Company
(67,753)
(41,442)
(113,133)
(75,184)
Non-controlling interests
(86)
(548)
(153)
(956)
Total comprehensive loss for the period
(67,839)
(41,990)
(113,286)
(76,140)
(UNAUDITED)
Consolidated statement of financial
position as of June 30, 2019 and December 31, 2018
As of
June 30
2019
December 31
2018
In thousands of EUR
Assets Non-current
assets Property and equipment
16,740
5,020
Intangible assets
70
180
Deferred tax assets
175
175
Other non-current assets
1,536
1,263
Total Non-current assets
18,521
6,638
Current assets Inventories
14,057
9,431
Trade and other receivables
20,113
13,034
Other taxes receivable
6,083
4,898
Prepaid expense and other current assets
8,539
7,384
Cash and cash equivalents
332,980
100,635
Total Current assets
381,772
135,382
Total Assets
400,293
142,020
Equity and Liabilities
Equity Share capital
156,816
133
Share premium
1,018,276
845,787
Other reserves
91,232
66,093
Accumulated losses
(983,871)
(862,048)
Equity attributable to the equity holders of the
Company
282,453
49,965
Non-controlling interests
(275)
(117)
Total Equity
282,178
49,848
Liabilities Non-current
liabilities Non-current borrowings
6,549
-
Total Non-current liabilities
6,549
-
Current liabilities
Borrowings
3,543
-
Trade and other payables
63,125
47,681
Income tax payables
10,055
10,882
Other taxes payable
5,752
7,288
Provisions for liabilities and other charges
21,472
19,829
Deferred income
7,619
6,492
Total Current liabilities
111,566
92,172
Total Liabilities
118,115
92,172
Total Equity and Liablities
400,293
142,020
(UNAUDITED)
Consolidated statement of cash flows as
of June 30, 2019 and 2018
For the three months ended For the six
months ended
June 30
2019
June 30
2018
June 30
2019
June 30
2018
In thousands of EUR
Loss before
Income tax
(67,581)
(42,077)
(113,303)
(76,062)
Depreciation and
amortization
1,778
496
3,473
976
Impairment losses on loans, receivables and other
assets
1,588
1,226
2,048
1,544
Impairment losses on obsolete inventories
149
(35)
353
(71)
Share-based payment expense
20,522
5,808
24,834
9,457
Loss/(Gain) on disposal of property, equipments and
intangible assets
(169)
5
(165)
12
(Gain)/Loss on disposal of financial assets
-
-
6
-
Net accrued interest and similar (income)/expense
(48)
(17)
197
(26)
Net unrealized foreign exchange (gain)/loss
961
176
887
(218)
(Increase)/Decrease in trade and other receivables,
prepayments and VAT receivables
(5,090)
(969)
(12,435)
(375)
(Increase)/Decrease in inventories
(3,127)
(455)
(4,790)
375
Increase/(Decrease) in trade and other payables, prepayments
and VAT payables
1,480
523
9,526
(4,201)
Change in provision for other liabilities and charges
942
1,647
1,546
1,634
Income taxes paid
(1,073)
(638)
(1,126)
(491)
Net cash flows used in operating activities
(49,667)
(34,310)
(88,951)
(67,447)
Cash flows from
investing activities Purchase
of property and equipment
(1,449)
(703)
(2,127)
(1,192)
Proceeds from sale of property and equipment
8
12
8
13
Purchase of intangible assets
(1)
(10)
(1)
(35)
Proceeds from sale of intangible assets
219
-
219
-
Consolidated securities investment
23
-
-
-
Purchase of financial assets
22
-
(2)
-
Financial interest received
488
-
488
-
Movement in other non-current assets
(237)
147
(177)
(107)
Net cash flows used in investing activities
(928)
(554)
(1,593)
(1,321)
Cash flows from
financing activities Proceeds
from borrowings
(3)
-
-
-
Financial interest paid
(444)
-
(767)
-
Payment of lease liabilities
(558)
-
(1,336)
-
Capital contributions
254,172
64,000
329,172
88,000
Expenses reclassed to Equity
(1,008)
-
(3,747)
-
Net cash flows from financing activities
252,159
64,000
323,322
88,000
Net increase in cash and cash equivalents
201,564
29,136
232,778
19,232
Effect of exchange rate changes on cash and cash
equivalents
(812)
521
(432)
108
Cash and cash equivalents at the beginning of the
period
132,229
19,411
100,635
29,728
Cash and cash equivalents at the end of the
period
332,980
49,068
332,980
49,068
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 including shipping fees, value added tax, and before
deductions of any discounts or vouchers, irrespective of
cancellations or returns.
Active Consumers means unique
consumers who placed an order on our marketplace within the
12-month period preceding the relevant date, 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 tables provide a reconciliation of loss for the
period to Adjusted EBITDA for the periods indicated:
For the three months
ended June 30
(€ million)
2018
2019
Loss for the period
(42.3)
(67.8)
Income tax expense
0.2
0.2
Finance costs
0.1
0.8
Finance income
0.0
0.1
Depreciation and amortization
0.5
1.8
Share-based payment expense
5.8
20.5
Adjusted EBITDA
(35.6)
(44.4)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190821005322/en/
Safae Damir Head of Investor Relations
investor-relations@jumia.com
Jumia Technologies (NYSE:JMIA)
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