Jumia Technologies AG

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the fourth quarter of 2021. At this time, all participants are in 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 Sapa Damir, Head of Investor Relations for Jumia. Please go ahead. Thank you.

Good morning, everyone. Thank you for joining us today for our Fourth Quarter 2021 Earnings Call. With us today are Sacha Poignelec and Jérémie Audara, co-founders and co-CEOs of Jomia, as well as Antoine Maillet-Mezret, 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 20-F, as published on March 12, 2021, as well as our other submissions with the SEC. In addition, on this call, we will 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 credit release, which is available on our investor relations website. With that, I'll hand over to Sasha.

Thank you, Taffa. Welcome, everyone, and thank you very much for joining us today. Before going into the results, I would like to remind you of our current strategy and where we stand right now. We are currently focused on scaling our platform with a fundamental and unchanged strategic objective of reaching profitability. To get there, we have very clear priorities. Accelerate usage growth, GMV, consumers, holders, increase monetization and cost efficiency, continue developing JuniorPay. And this is the natural next step in the journey we've been on since inception. We have a vast and largely intact market of almost 600 million consumers across 11 countries. To capture this opportunity, we've spent the first years of our journey building the solid foundation for our platform across e-commerce, logistics, and payment. And this platform is uniquely tailored to the specifics of our markets. With this foundation in place, we focused over the past three years on enhancing the fundamentals of our business. We made tremendous progress building everyday product categories and our platform has never been more diverse and relevant for consumers as part of their daily lives. We have also strengthened our unit economics and crossed a major milestone of positive gross profit after fulfillment expense And it has now been the case consistently for the past nine quarters. Lastly, we've raised over $570 million in cash over the past two years, giving us a strong balance sheet to finance our strategy. Leveraging these strong fundamentals, we turned our focus in 2021 to accelerating usage growth, to scale our business and take it to profitability. We are pleased to report very good progress on growth acceleration during Q4, and let's please turn to page four for the highlights of the quarter. Best usage ever, GMV reached all-time high, active consumers reached all-time high, orders reached all-time high. This is very good. We're now back to growth. The acceleration strategy is paying off. Monetization. highest revenue ever, highest gross profit before consumer incentives ever. A BDA loss stood at minus $70 million in Q4, mainly driven by strong investments in sales and advertising and consumer incentives. We invested $27 million more into sales and advertising and consumer incentives than last year. We're comfortable with this level of investment because of the strength of our unit economics. and because we're seeing the dynamics on usage growth acceleration. So overall, a good quarter in our view, building the acceleration of usage we all wanted to see, and some great progress on monetization. Now, we still want to see more, of course, and I will give more precise guidance for 2022 at the end of the call. If we review our usage metrics on page five, please. Quarterly active consumers reached a record of 3.8 million in Q4, up 29% year-on-year, driven by all-time high new consumer ads during the quarter. This is a new KPI that we will now provide every quarter so that we give even more granularity on usage performance, and we will still provide the annual active consumers on a yearly basis. And you can see in the presentation later that we reached this year 8 million active consumers, also a record. Olders accelerated by 40%, also reaching an all-time high of 11.3 million. And this acceleration in both consumers and holders is driving what we believe to be an inflection in GMV, which was up 20% year-over-year, reaching, again, all-time high of 300 million USD. We're very encouraged, obviously, by this acceleration and view it as strong evidence that our strategy is paying off. We intend to build on this momentum to further scale our platform and continue to accelerate. In parallel, let's turn to page 6 please, underlying monetization is also reaching new highs. If we look at our monetization metrics before consumer incentives, which are counted as deductions from the revenue line, we see clear trend of acceleration with new records achieved in Q4. Revenue before consumer incentives reached $73 million, up 39%, the fastest revenue growth in the past two years. Gross profit before consumer incentives reached $45 million, up 24%, while the margin as a percentage of GMB reached 13.6%. And finally, gross profit after fulfillment expense, and still, of course, before consumer incentives, also reached a new high at 14 million, up 9% year over year, while margin as a percent of GMV here remained at above 4%, at 4.3%. We're very pleased to drive both strong usage growth and strong monetization, and this is giving us the flexibility to further invest in the growth of our platform On page seven, you can see that we continued leaning into growth investments in Q4, which is what we had initiated earlier in 2021. There are two key areas of investments for us. First is consumer adoption. We are increasing our investments in sales and advertising and consumer incentives, and we're doing so in a targeted and disciplined manner. Over 57% the increase in sales advertising is coming from increased offline marketing costs which are largely geared towards brand awareness and consideration and second area of investment is platform development technology and GNA tech is the backbone of everything we do at Junya we are accelerating the development of products and features which are creating a more engaging and seamless user experience more effective operations with a fully dedicated tech stack for payment and fintech as well. We are comfortable with the increased level of adjusted EBITDA loss during this quarter and the pace of investments for a number of reasons. Number one, these investments are coming from a place of strength. Our levels of monetization have never been higher, and we have the financial firepower to make those investments. Secondly, it's the right time for us to be making this investment. There is strong momentum in the business, in terms of usage and we are building on this momentum to drive even more growth. And three, these investments are of course creating even more strength in the platform, more compelling experience and more compelling value proposition for all participants as well as bigger scale which ultimately contributes to the path to profitability. Now, let's go into more details in the performance and Jeremy will take it from there.