Jumia Technologies AG

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the second quarter of 2022. 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 Demir, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our second quarter 2022 earnings call. With us today are Sacha Poignonek and Jérémie Audara, co-founders and co-CEOs of Jumia, and Antoine Maillet-Mébré, 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 statement. 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 April 29, 2022, 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 press release, which is available on our investor relations website. With that, I'll hand over to Sacha.

Thank you very much, Safa. Welcome, everyone, and thanks for joining us today. I would like to share a few highlights of our Q2 performance and give you an update on our strategy and guidance. We are committed to taking the business to break even, and in that regard, have delivered a strong quarter with very good progress on each building block of our path to profitability. Number one, usage growth. As you know, scale is a driver of profitability. Olders and culturally active consumers were up 35% and 25%. GMV grew by 21% in Q2, 34% on a constant currency basis. This happened in a volatile macro context with increasing pressure on consumer spend and access to supply for our sellers. It also happened with very strong discipline on marketing investments from our side. For us, it's a clear sign that our focus on relevant everyday products, competitive prices, and consumer experience is paying off. Number two, monetization acceleration. Revenue was up 42% and 56% on a constant currency basis. We posted the fastest marketplace revenue and gross profit growth rates of the past five quarters at 17% and 14%, respectively. We want larger scale to be a catalyst for revenue growth, and the diversified monetization engine we have built allows us to drive revenue from both consumer usage and the assets of our platform. Number three, cost efficiency. Cost discipline is a top priority for us, even more so in the current context We drove usage growth and monetization acceleration with lower than expected marketing investments. Sales and advertising expense reached $41 million in H1 compared to our guidance of $50 to $55. GNA was another area of increased efficiency for us with GNA excluding share-based compensation expense being flat year over year. and declining sequentially by 12%. So overall, some very good progress in Q2. The macro picture is challenging. However, the fundamentals of our business have never been stronger. If we now look ahead, I'm turning to page four. Our strategic focus is to make strong progress on profitability. We have outlined here our near-term guidance, which reflects this continued focus. On usage, despite the macro, we aim to maintain robust usage growth and we reiterate our guidance of GMV growth in excess of 15% for the full year in USD terms. On monetization, we plan to accelerate. We expect gross profit in H2 of 75 to 85 million. This implies year-on-year growth of 27% up to 44%, which is at least double the growth rate of Q2. So, a significant acceleration. On the cost efficiency front, we are doubling down on the cost discipline. In particular, we expect to drive further marketing efficiencies, leveraging the long-term investments we made over the past year in brand awareness and consideration. For H2, we expect sales and advertising of 35 to 45 million, implying year-over-year savings of 18% up to 37%. So in summary, we're going to keep growing usage, we're going to accelerate gross profit growth, and do this with even more cost efficiency. As a result, and I'm now turning to page 5, we believe that we have turned a corner and are past the peak of adjusted EBDA losses that was reached in Q4 of last year, in 2021. For H2, we expect losses of 87 to 107, which implies a reduction versus H1 of 5 to 22%, and versus last year, a reduction of 12 up to 29%. Finally, we reiterate our yearly guidance for 2022 of 200 to 220 million, and we expect adjusted EBDA loss to start decreasing on a yearly basis starting next year. The results of our clear strategy and consistent execution are coming nicely together, allowing us to reduce adjusted EBDA losses going forward. And now Jeremy and Antoine, will give more color on the results.