Jumia Technologies AG

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumayah Results Conference Call for the third quarter of 2021. At this time, all participants are on a 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 Jumayah. Please go ahead.

Good morning, everyone. Thank you for joining us today for our third quarter 2021 earnings call. With us today are Sacha Pranionek and Jeremy Odara, co-founders and co-CEOs of Jumia. 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 published on March 12, 2021. In addition, on this call, we would refer to certain financial measures not reported in accordance with IFRS. You can find reconciliations of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings press release, which is available on our Investor Relations website. With that, I'll hand over to Sacha.

Thank you very much. Welcome, everyone, and thanks for joining us today. Let's start on page three. And as announced in Q2, we are currently focusing on scaling our platform. By scaling our platform, we mean accelerating our usage growth, accelerating the development of JumiaPay, diversifying our monetization, and all this in order to drive progress towards profitability. I think our results in Q3 very much reflect that strategy. We are able to enter this new phase of scale with strong confidence because in the past three, four years, we have strongly enhanced our fundamentals. Chimney is a very different company today versus four years ago. We have increased marketplace relevance. We have enhanced unit economics, strengthened our balance sheets. And ultimately, we've built what we believe to be a very strong and scalable platform, including the marketplace, logistics, payment, all adapted to our markets in Africa. And given the strengths of our fundamentals, it's the right strategy now to scale the platform. If you move to page four, you can see that the acceleration is now underway. Quarterly orders reached all-time high. record number in Q3 2021, posting the fastest year-to-year growth of the past seven quarters. Consumers, we've got, we posted in terms of annual active consumers, the fastest sequential growth of the past five quarters. And we recorded in Q3 the highest ever number of quarterly active consumers. And as a result of the acceleration in consumer and holders, we are reaching an inflection in GMV which is now growing by 8% year over year. This is great news. Acceleration is underway. We see good momentum, and suddenly we are working to drive even more momentum going forward. On page five, you can see that adjusted BDA reflects the increased investments in the long-term growth of the business. There are two main areas where we are currently investing. The first is consumer adoption. We are increasing our investments in sales and advertising and in consumer incentives in order to drive increased brand awareness, increased brand consideration, conversion of new consumers, and increased loyalty. We're investing in our brands. We're investing in our consumers, both for long-term growth and we do it in a very targeted and disciplined way. The second area is technology and G&A. Here, our objective is to accelerate the development of product and features for an even more engaging and seamless user experience, as well as, of course, the development of junior pay. We are comfortable with the increased level of ABDA loss, given the strength of our unit economics that we will comment in a minute. the good signs of growth that we have just seen, and of course, our cash position of $584 million at the end of the quarter. Now, let's review on page six the unit economics, which obviously are a key enabler for these growth investments. On this page, you can see that the average order value now stands at $28, as we continue to shift our mix towards more of the everyday product categories. And in parallel, our gross profit after fulfillment expenses, excluding consumer incentives, which are deducted from revenues, stands at $1.3 per order, which represents 4.6% of the value of each order. Three years ago, same numbers were $0.5 and 1.2%. Given this, given the strength of the unit economics, we are investing more into scaling the platform, and this includes targeted investments in consumer adoption. You can see on this chart that we have increased consumer incentives to $0.9 per order, a level which is similar to the ones that we had two years ago, and our sales and advertising per order are now spending at $2.8. We believe that we have very strong unit economics and this will continue to allow us to invest into scaling the platform. With this, let me now hand over to Jeremy, who will give us more details on the performance of Q3.