from Jumia Technologies AG (NASDAQ:JMIA)
Jumia Reports Third Quarter 2023 Results
Meaningful progress in our strategy towards cash efficiency and profitable growth
LAGOS, NIGERIA / ACCESSWIRE / November 15, 2023 / Jumia Technologies AG (NYSE:JMIA) ("Jumia" or the "Company") announced today its financial results for the third quarter ended September 30, 2023.
Results highlights for the third quarter 2023
- Revenue of $45 million, down 11% year-over-year, and up 19% in constant currency.
- GMV of $181 million, down 25% year-over-year, and down 3% in constant currency. GMV of physical goods increased in five countries year-over-year in reported and constant currency.
- Operating loss of $19 million compared to $43 million in the third quarter of 2022, down 57% year-over-year, and down 59% in constant currency.
- Adjusted EBITDA loss of $15 million compared to $46 million in the third quarter of 2022, down 67% year-over-year, and down 70% in constant currency.
- Liquidity position of $147 million marking a decrease of $19 million in the third quarter of 2023 compared to a decrease of $66.0 million in the third quarter of 2022.
- Net cash flows used in operating activities $24 million compared to $54 million in the third quarter of 2022, down 55% year-over-year.
| For the three months ended | ||||||||||||||||
| As reported | Constant currency | |||||||||||||||
| In USD million, unless otherwise stated | September 30, 2022 | September 30, 2023 | YoY Change | September 30, 2023 | YoY Change | |||||||||||
Revenue | 50.5 | 44.9 | (11.1) | % | 60.0 | 18.8 | % | |||||||||
Gross Profit(*) | 32.4 | 25.1 | (22.6) | % | 32.9 | 1.7 | % | |||||||||
Fulfillment expense(*) | (23.2 | ) | (12.0 | ) | (48.1) | % | (15.1 | ) | (35.0) | % | ||||||
Sales and Advertising expense | (16.4 | ) | (4.3 | ) | (73.6) | % | (5.4 | ) | (67.3) | % | ||||||
Technology and Content expense | (13.6 | ) | (10.1 | ) | (25.8) | % | (10.1 | ) | (25.8) | % | ||||||
G&A expense, excluding SBC(*) | (28.1 | ) | (15.9 | ) | (43.2) | % | (18.9 | ) | (32.7) | % | ||||||
Adjusted EBITDA | (45.5 | ) | (14.9 | ) | (67.2) | % | (13.5 | ) | (70.3) | % | ||||||
Operating Loss | (43.2 | ) | (18.5 | ) | (57.0) | % | (17.7 | ) | (59.0) | % | ||||||
Quarterly Active Consumers (million) | 3.1 | 2.3 | (24.3) | % | n.a | n.a | ||||||||||
Orders (million) | 9.4 | 7.2 | (23.2) | % | n.a | n.a | ||||||||||
Gross Merchandise Value ("GMV") | 240.7 | 181.0 | (24.8) | % | 234.2 | (2.7) | % | |||||||||
Total Payment Value ("TPV") | 66.6 | 48.1 | (27.7) | % | 68.6 | 3.0 | % | |||||||||
TPV as % of GMV | 27.7 | % | 26.6 | % | 29.3 | % | ||||||||||
(*) Restated 2022 figures to reflect the impact of i) the restatement of direct costs of providing logistic services to non-sellers at Jumia from ‘Fulfillment Expense' to ‘Cost of Revenue', ii) the reclassification of payment processing costs from ‘Cost of Revenue' to ‘Fulfillment Expense‘ and iii) the reclassification of payment processing costs from ‘General and Administrative Expense' to ‘Fulfillment Expense'. In the appendix, we have provided restated quarterly 2022 figures for ‘Cost of Revenue', ‘Gross Profit', ‘Fulfillment Expense' and ‘G&A Expense, excluding SBC'. Further information on our accounting policy changes can be found in our Annual Report on Form 20-F for 2022.
Dear Shareholders,
I am pleased to share positive results of the growth and cash efficiency strategy that we announced one year ago.
We have built a leaner and more focused organization centered around clear priorities for our core physical goods business. Costs have been streamlined while maintaining strong execution on priority projects; operations have become more efficient while growing our footprint outside of the main cities; and sales and advertising expenses have decreased while building stronger fundamentals for profitable growth.
We have thus significantly reduced our losses and cash utilization, securing a liquidity position that we believe enables us to work on fundamental, long-term improvements to grow our core business.
To position us for profitable growth, we have continued to shift our focus away from costly marketing channels, and towards enhancing our supply in key physical goods products categories with proven economics. Beyond savings from reduced Sales and Advertising expense, we believe this is the best approach to grow in African markets where we see high demand, but which are often underserved due to supply and distribution challenges.
Driven by improved supply in our core categories, which are Phones, Electronics, Home & Living, Fashion and Beauty, as well as expanding our geographical reach, we have experienced positive year-over-year growth in GMV of physical goods in five of our eleven operating countries. These five countries are most advanced in terms of execution of our growth and cash efficiency strategy and we believe that the positive results in these countries prove that we have the right plan. We continue to implement our strategy across all operating countries, focusing on speed and quality of execution.
We believe that improved fundamentals will gradually enable us to benefit from a stronger platform to drive incremental and profitable revenue streams such as advertising and payment services.
There is still more to be done but I am confident that the strategy is the right one for Jumia and we have the right team in place to execute.
Francis Dufay
Chief Executive Officer and
Member of the Management Board
1. Marketplace KPIs
| For the three months ended | For the nine months ended | ||||||||||||||||||||||||
| As Reported | Constant currency | As Reported | |||||||||||||||||||||||
| September 30, 2022 | September 30, 2023 | YoY Change | September 30, 2023 | YoY Change | September 30, 2022 | September 30, 2023 | YoY Change | ||||||||||||||||||
Quarterly Active Consumers (million) | 3.1 | 2.3 | (24.3) | % | n.a | n.a | n.a | n.a | n.a | ||||||||||||||||
Orders (million) | 9.4 | 7.2 | (23.2) | % | n.a | n.a | 29.0 | 20.7 | (28.7) | % | |||||||||||||||
GMV (USD million) | 240.7 | 181.0 | (24.8) | % | 234.2 | (2.7) | % | 764.4 | 581.4 | (23.9) | % | ||||||||||||||
- Quarterly Active Consumers and Orders decreased by 24% and 23% year-over-year, respectively, largely driven by deliberate decisions to focus on core categories and reduce consumer incentives.
- Quarterly Active Consumers and Orders decreased by 3% and increased by 11% quarter-over-quarter, respectively, reflecting an approximately flat level of orders for physical goods as well as an increase in orders for digital services on the JumiaPay app. We view this as a significant step forward, as we have consciously scaled back some of our marketing initiatives. Our strategic focus is now on cultivating a customer base with greater long-term value.
- GMV in the third quarter of 2023 declined by 25% year-over-year, and 3% year-over-year on a constant currency basis.
- Foreign exchange was a significant headwind to GMV performance with 8 out of 10 local currencies in our countries of operation depreciating against the US Dollar for the nine months ended September 30, 2023, compared to the same period in 2022. Notably, the Naira experienced a 78% depreciation against the US Dollar, falling from a rate of USD/NGN 432 as of September 30, 2022 to a rate of USD/NGN 771 as of September 30, 2023, accounting for 61% of the reported GMV decline year-over-year.
- Inflation impacts persisted affecting both consumers' spending power and sellers' ability to source goods from abroad. The average inflation level across our footprint reached 13.5% in September 2023 with highs of 38.1%, 38.0% and 26.7% in Ghana, Egypt and Nigeria, respectively.
2. JumiaPay KPIs
| For the three months ended | For the nine months ended | ||||||||||||||||||||||||
| As Reported | Constant currency | As Reported | |||||||||||||||||||||||
| September 30, 2022 | September 30, 2023 | YoY Change | September 30, 2023 | YoY Change | September 30, 2022 | September 30, 2023 | YoY Change | ||||||||||||||||||
TPV (USD million) | 66.6 | 48.1 | (27.7) | % | 68.6 | 3.0 | % | 211.4 | 153.7 | (27.3) | % | ||||||||||||||
JumiaPay Transactions (million) | 3.0 | 3.2 | 7.5 | % | n.a | n.a | 9.6 | 7.3 | (23.6) | % | |||||||||||||||
- TPV was $48.1 million in the third quarter of 2023, down 28% year-over-year and up 3% on a constant currency basis. In the third quarter of 2023, TPV as a percentage of GMV remained stable at approximately 27% compared to the same period in 2022.
- JumiaPay Transactions reached 3.2 million in the third quarter of 2023, up 8% year-over-year. 44.7% of Orders placed on the Jumia platform in the third quarter of 2023 were completed using JumiaPay, compared to 31.9% in the third quarter of 2022. This increase was mostly attributable to an increase in the percentage of orders on our physical goods and food delivery platforms completed using JumiaPay.
SELECTED FINANCIAL INFORMATION
| For the three months ended | For the nine months ended | ||||||||||||||||||||||||
| As Reported | Constant currency | As Reported | |||||||||||||||||||||||
| (USD million) | September 30, 2022 | September 30, 2023 | YoY Change | September 30, 2023 | YoY Change | September 30, 2022 | September 30, 2023 | YoY Change | |||||||||||||||||
Revenue | 50.5 | 44.9 | (11.1) | % | 60.0 | 18.8 | % | 155.4 | 139.7 | (10.1) | % | ||||||||||||||
Marketplace | 32.2 | 22.4 | (30.5) | % | 28.7 | (10.9) | % | 89.3 | 75.9 | (15.0) | % | ||||||||||||||
Commissions | 12.6 | 10.2 | (18.9) | % | 13.0 | 3.5 | % | 31.8 | 33.6 | 5.8 | % | ||||||||||||||
Fulfillment | 7.9 | 5.3 | (33.3) | % | 6.7 | (15.5) | % | 23.5 | 17.5 | (25.7) | % | ||||||||||||||
Marketing & Advertising | 3.3 | 2.5 | (26.3) | % | 3.2 | (5.3) | % | 10.6 | 8.9 | (16.0) | % | ||||||||||||||
Value Added Services | 8.4 | 4.4 | (46.9) | % | 5.8 | (30.5) | % | 23.4 | 15.8 | (32.3) | % | ||||||||||||||
First Party revenue | 16.5 | 21.9 | 32.8 | % | 30.5 | 85.2 | % | 61.1 | 62.1 | 1.6 | % | ||||||||||||||
Other revenue | 1.8 | 0.6 | (65.4) | % | 0.8 | (57.8) | % | 5.0 | 1.7 | (65.7) | % | ||||||||||||||
Gross Profit(*) | 32.4 | 25.1 | (22.6) | % | 32.9 | 1.7 | % | 89.6 | 79.7 | (11.0) | % | ||||||||||||||