Jumia Technologies AG

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jamiah's results conference call for the fourth quarter of 2020. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to turn the call over to Safa Damir, Head of Investor Relations for Jamiah. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our fourth quarter and full year 2020 earnings call. With us today are Sacha Poignonek and Jérémy Odara, co-founders and co-CEOs of Junia, as well as Antoine Maillet-Méveret, CFO. This call is also being webcast on the IR section of our corporate website. We will start by covering the safe harbor. We would like to remind you that our discussions today will include forward-looking statements Actual results may differ materially from those indicated in the forward-looking statements. Moreover, these forward-looking statements may speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements. For a discussion of some of the risk factors that could cause actual results to differ from the forward-looking statements expressed today, please see the risk factors section of our annual report on Form 20F as amended on July 8th, 2020. In addition, on this call, we will refer to certain financial measures not reported in accordance with IFRS. You can find reconfigurations of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings rate review, which is available on our investor relations website. With that, I'll hand over to Sachan.

Thank you, Safa. Thank you very much. Welcome, everyone. Thanks for joining the call. I hope that you are all staying safe and well. The focus of our strategy has been very clear and remains unchanged. Build a sustainable platform to capture this great opportunity of e-commerce in Africa. And what we mean by sustainable is to bring indisputable facts and evidence that our business model positions us well to become profitable. And as you can see in our results, here are the facts for the quarter. Number one, we have reduced our adjusted BBA loss by 47%. We are now, for five quarters in a row, profitable after fulfillment at group level. The majority of our country is now breakeven before GMA. We are growing the usage of Junia in the categories which we have chosen to focus on. And we do all of the above with lower GNA expenses and lower sales and advertising expenses. So overall, we feel very strong about those results, which clearly bring more evidence of the strength of our business model. If we look into a few more details on page four, on the usage of Jumia, of course, 2020 was marked by the business mix rebalancing towards the higher share of everyday product categories. and by a strong focus on efficiency, ensuring that the usage we drive has attractive unit economics. We drove down the share of phones and electronics from 56 to 43% of GMV. We achieved a five-point improvement in cancellations, failed deliveries, and returns, which went from 30% to 25, meaning that the usage we drive is more efficient and can be better monetized. GMV and orders post-CFDR have been growing by 15% and 19% on all the business outside phones and electronics, which is the business we have deliberately chosen to reduce. On usage, for us, it was a year of choice, of growing selectively and efficiently. TPV increased by 58%, and the penetration has now reached 35% of orders at group level. We added more than 100 new digital services on the Juniapay app in order to bring more relevance and convenience to our consumers. On revenues, marketplace revenue and gross profit increased by 20% and 22% respectively, and our gross profit margin as a percentage of GNV increased by almost four points, now reaching 12%. And last but not least, we generated significant savings across all cost lines. And we now have a leaner, more efficient cost structure. Fulfillment expense went down by 10%. Sales and advertising went down by 42%. And GMA, outside share-based compensation, went down by 12%. So if you look at our P&L, we're growing the profitable usage. We're increasing the gross profit after fulfillment while decreasing GMA and sales and advertising. So mathematically, will reach breakeven if we continue to do that. On page five, in 2019, we set ourselves a clear objective, reduce our loss in absolute terms. And I think it's clear, very clear that we are delivering strongly against that objective. We reduced the adjustability loss by 10% in Q1, 26% in Q2, 50% in Q3, and 47% in Q4. And this progress, importantly, was achieved as a result of driving both more profitable usage and lower costs. On page six, you can see how we have transformed our P&L over the last two years. In 2019, we were still not making money after logistics. And overall, for every order which was placed on the platform, we were still making a loss. And you can see also our costs were going up. Now you can see how gross profit after fulfillment is continuously increasing, having rebalanced the category mix and leveraging linear cost base. Each order we now generate takes us closer to profitability. And at the same time, the cost structure is clearly becoming more efficient across the board. So once again, a clear evidence about the path to profitability at the P&L level. On page seven, if we zoom on the unit economics for the quarter, our average order value is now 29 euros. That's 19% smaller than last year. And every single component of our unit economics has improved. Gross profit per order, plus 15%. Gross profit over GMV, plus almost four points. Gross profit after fulfillment, now 15%. one Euro when it was 0.1 last year. Sales and advertising, minus 33% per order. Tech and DNA, minus 28% per order. So a lot of progress made, both on the revenues and on the costs. And this progress, as we have been talking about, has been achieved without a tailwind from COVID. We discussed already last time, and... we discussed that COVID did not lead to any drastic changes in consumer behavior on our platform and no meaningful surge of volume at Pan-African level. Rather, it had a net negative effect on the business due to localized supply and logistic disruptions that we have been experiencing throughout the year. Obviously, the situation is still evolving. We continue to monitor, in particular, the rising cases, the rollout of the vaccine and at what speed that will happen, and the overall negative impact on consumer sentiment and spending power. What's important is that all the actions that we took last year and in 2019 and 20, whether it's the increased focus on everyday categories or the cost efficiencies that we generated and also the proactive capital raise that we conducted in December, all those actions, they enhance our resilience to volatility, macro volatility, and they position us very well for the long term. And I'll conclude by sharing with you on page nine a few of the many initiatives we undertook this year. Our key priority has been helping our people, consumers, sellers, and communities we serve to stay safe, of course, and as much as possible functioning through the crisis. All those initiatives illustrate how important it is for us to drive impact beyond our day-to-day operations. I'm obviously happy to give you more color in our discussions on all this. Our mission and our values drive our actions and We are immensely grateful to our teams, our frontliners in particular, who have truly embodied these values and acted with an incredible sense of purpose, resourcefulness, and dedication. We thank you all very, very much for that. And with this, I'll hand over to Jérôme.