Q1 2025 Jumia Technologies AG Earnings Call

Speaker Change: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the first quarter of 2025. At this time, all participants are in a listen only mode. After the management's prepared remarks, there will be a question and answer session.

Speaker Change: Thank you. Good morning, everyone. Thank you for joining us today for our first quarter 2025 earnings call. With us today, our Francis Dufay, C.O. Jumia, and Antoine Maillet Executive Vice President, Finance and Operations.

Speaker Change: We would like to remind you that our discussions today were into reporting within statements.

Speaker Change: Actual results may differ materially from those indicated in the four-looking statements.

Speaker Change: Moreover, these four-looking statements may speak only to our expectations as of today.

Speaker Change: We undertake no obligations to publicly update or revise these statements.

Speaker Change: for a discussion of some of the risk factors that could cause accurate results differ from the four-looking statements expressed today. Please see the risk factors section for our annual report on form 20F as published on March 7, 2025, as well as our other submissions with the SEC.

Speaker Change: In addition, on this call, you will first start financial measures now reported in accordance with IFRS.

Speaker Change: You can find the conciliation of these not 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 it over to Francis.

Francis Dufay: Good morning everyone and thank you for joining Jumia's first quarter 2025 Erning School.

Francis Dufay: We enter 2025 with a claim and date, reduced losses, drive efficiency, and deliver measurable

And we have started executing decisively.

Francis Dufay: While we have materially reduced our losses in recent years, we know our profitability is not yet where it needs to be. The gap is clear and closing it is our top priority.

Francis Dufay: Accelerating usage trends during the quarter, combined with a return to positive end-user GMV growth in March, a strong signal of renewed momentum.

Francis Dufay: However, overall GMV and revenue remained pressured by one currency headwinds, which continued to weigh in profitability, and two by a sharp decrease of corporate sales in Egypt, which generated significant volumes in Q423 and Q124.

Francis Dufay: That's why we're laser focused on margin, expansion and financial discipline.

Francis Dufay: We are executing against our plan to slash cash burn and structurally improve margins.

Francis Dufay: User graph is important, but in Q1 our focus was clear. The cuts out of the system.

Francis Dufay: We have launched targeted, company-wide initiatives across logistics, fulfillment , technology, and GN expense. That impact will scale through the rest of the year.

Francis Dufay: As a result, we are raising our full year 2025 guidance and now expect a loss before in contacts of $50 to $55 million and improvement from our prior range of $65 to $70 million.

Francis Dufay: For 2026, we forecast a loss before income tax of 25 to 30 million dollars and we believe to be on track to reach profitability on a loss before income tax basis in the fourth quarter with full your profitability targeted for 2027.

Francis Dufay: Rejecting Q1 results and solid early Q2 momentum were also increasing our physical goods orders those growth guidance, 20 to 25 percent, up from 15 to 20 percent.

Francis Dufay: Before discussing the quarter's financial results, let me now provide additional contact around your practice steps we are taking to reduce the cost-base.

Francis Dufay: Although we have made significant strides towards becoming a linear and more efficient organization, considerable work remains to achieve our goal of becoming a sustainable cash flow positive organization.

Francis Dufay: To accelerate our progress, we are cutting costs across the business with execution already underway in logistics, full-filment, staffing and tech.

Changes are already visible in our numbers.

Infulfillment

Francis Dufay: We are executing a detailed action plan focused on reducing physical goods costs per order.

Francis Dufay: In Q1, we successfully renegotiated nearly all of our third-party logistics contracts and looking to improve the unique unit economics, especially in markets where volume scale is strong.

Francis Dufay: We also reduce staffing levels in our warehouses and achieve meaningful profitability gains.

Francis Dufay: We are also consistently optimizing line hole rooting and reducing the number of tracks moves.

Francis Dufay: These actions have already delivered a meaningful reduction in procurement expense per order, excluding Jumia B app orders, to $2.1 in Q125, a 14% reduction year over year. We expect further progress as this initiative scales through the remainder of the year.

Francis Dufay: On staffing, we are managing a tuition and relocating resources to high priority areas.

Francis Dufay: And since the beginning of the year through the end of April , we have already reduced our total head count by about 3% demonstrating our commitment to cost control and organizational efficiency.

Francis Dufay: In technology, we are cutting cost-weight matters without touching growth enablers.

Francis Dufay: We have renegotiated all terminated several key software and hosting contracts, targeting meaningful cost savings, starting in the second half of 25th.

Francis Dufay: Based on existing timelines, we expect license-related costs in Q126 to be significantly lower than in Q126. The savings are already secured, reinforcing the complete and measurable nature of all

For example, in technology and more specifically regarding hosting costs.

Francis Dufay: We have yearly contractual commitment of 13.7 million dollars in 24, where as our current 12-month commitment is now reduced to only 10 million dollars without limiting our growth potential.

Francis Dufay: On GNA, we conducted a comprehensive line-by-line review of our expenses earlier this year. We expect that this review will progressively yield tangible savings across several

Francis Dufay: On the growth profit front, we have very moderately increased marketplace take rates across most markets leveraging our growing scale to enhance profitability without materially impacting our price positioning.

Francis Dufay: Let me be clear. We firmly believe that these savings and monetization efforts are not coming at the expense of growth. They are the result of simplification, smarter execution, better technology and a relentless focus on return and investment.

Francis Dufay: For example, in the first quarter of 25, lower fulfillment costs have not impacted custom

Francis Dufay: Technology costs rejections do not constrain our ability to scale traffic or handle higher orders both.

Francis Dufay: And smaller teams are operating more efficiently with sharper focus and improved tools.

Francis Dufay: Tasman for the quarter was 23.2 million dollars, including 8 million dollars in working capital.

Francis Dufay: With this level of execution and continued cost discipline, we expect to significantly reduce cash burn in the coming quarters and remain confident that we can do so without raising additional capital.

Francis Dufay: We delivered solid usage metrics, building on the momentum from the previous quarter. In the first quarter, adjusted for parameter effects.

Francis Dufay: Physical good orders will 21% your overyear, driven by strong demand and continued execution.

Partly active customers ordering physical goods through by 15% your order.

Francis Dufay: These are both our highest growth rates over the past two years showing the impact of our plan.

Francis Dufay: Customer loyalty remains strong as 45% of new customers, adjusted for perimeter effects, who placed an order in Q424 made another purchase within 90 days, up from 40% in Q423.

Francis Dufay: Demand remained robust in key categories such as electronics, phones, home and living, fashion and beauty.

Francis Dufay: GMV declined 11% over year, primarily due to the currency headwind and lower corporate sales, particularly in Egypt.

Francis Dufay: Excluding corporate sales, GMV would have grown 10% year-over-year highlighting underlying trends in our consumer business. The average order value for physical good orders was 35.4 dollars in Q125 compared to 46.2 in Q124.

Francis Dufay: Importantly, as of March, we have fully lapped the significant currency headwinds from Egypt and Nigeria, which provide a cleaner year over your comparison moving forward.

Francis Dufay: As a reminder, the Nigerian Nera experienced a devaluation in February 24, followed by a devaluation of the Egyptian Pounds in March 24.

Francis Dufay: To clearly illustrate our underlying growth trends after lapping currency devaluations, we are providing additional data points for March.

Dispositive trends align with our expectations for the stingwoods.

Francis Dufay: Revenue for the quarter was $36.3 million, down 26% the overyear and down 18% the constant currency.

Francis Dufay: Our GSTDB DLOS was $15.7 million in Q125 compared to a loss of $4.3 million in Q124. LOS before Income Tax was $16.5 million, a signage can't improvement from $39.6 million in the same period last year.

Francis Dufay: Let's now turn to Operational Highlights and Execution at the Council level.

Francis Dufay: First, on supply. We have significantly strengthened our relationships with international sellers, especially from China, expanding our assortment at attractive prices.

Francis Dufay: In Q1, we solved 2.6 million growth items internationally, adjusted for parameter effects representing 61% of your increase.

Francis Dufay: Our Chinese vendor base is scaling rapidly, and the supply pipeline is more robust than ever.

Francis Dufay: Second, on geographic reach. We're expanding beyond major cities into underserved upclamatory regions. Others from these areas grew sharply and now represent 58% of total volumes, up from 50% last year, adjusted for perimeter effects.

Francis Dufay: This expansion is unlocking high growth, low cost, customer acquisition with minimal fixed cost

Francis Dufay: Our asset-light model, built on partnership with third-party logistic providers and pick-up station operators, is delivering results, reducing food treatment costs per order and enhancing customer convenience at scale.

Francis Dufay: This quarter, we're introducing more detailed transfer level disclosures to give greater visibility to how our strategy is performing across our largest markets.

Francis Dufay: Specifically, we'd like to share a breakdown of our largest markets by GMV in Q1 25.

Ivory Coast

Francis Dufay: The same four countries also accounted for 21, 30, 15 and 9% of total physical good orders respectively with other markets making up the remaining 25%.

Francis Dufay: This breakdown highlights our strong execution in key markets and highlights the significant opportunity that exists across our Pan-African footprint.

Francis Dufay: In Ivory Coast, physical good orders increased your order by 25% and GMV by 4% and 8% in constant

Francis Dufay: The pace of growth in orders reflects success in lower value categories such as fashion, while growth in GMV is slower after a very successful Q-124, in high value categories such as T-Gen appliances, driven by the African Cup of Nations that took place in Africa's last year.

Francis Dufay: This market was has served as a blueprint for our current strategy where we began executing our commercial and operational playbook several years ahead of most countries.

Francis Dufay: As a result, Ivory Coast stands as our leading market by GMV.

Francis Dufay: With strong consumer engagement, with well-established brands and strong scale effects, our focus is now on leveraging our scale to drive higher profitability.

in Nigeria.

Francis Dufay: Vehicle goods orders grew by 22% and GMV increased 18% year-over-year and 46% in constant currency.

Francis Dufay: The momentum is clear, especially in March where GMV surge 43% and physical with orders growth of accelerated to 32%

Francis Dufay: This performance is a result of discipline execution driven by expanded product assortment, improved quality of service, and deeper penetration into up-counter regions.

Francis Dufay: After a successful turnaround in 2024, Nigeria remains our latest largest and most strategic market, and it is significantly under-penetrated.

Francis Dufay: Despite rising competition, Jumia maintained a clear leadership position with substantial run rate for continued growth.

Inkimia

Francis Dufay: Physical group orders will 36% your warrior and GMV increase 44% and 25% in constant currency.

Francis Dufay: Disperformance reflects a strong execution of our playbook driven by Upcomflix Pension, a more competitive development and increased contributions from international sales sellers.

Francis Dufay: Like Nigeria, Kenya underwent a meaningful turn around in 2024 and is now well positioned for sustained growth.

Francis Dufay: This is significant opportunity in the market to increase open iteration while driving profitability.

in Egypt.

Francis Dufay: Physical good orders were down 15% your overyear and GMV decreased 69% in USD and 54% in constant currency.

Francis Dufay: GMV was mostly impacted by a sharp decline in corporate sales due to shifting market dynamics as well as the lagging impact of March 2020 for devaluation.

Francis Dufay: That said, we are in full execution mode on the business resets, driving forward the competitive, comprehensive restructuring plan launched in early 24.

Francis Dufay: While volumes remain below our expectations, we are seeing tangible operational progress.

Francis Dufay: Despite a highly competitive landscape we believe we can unlock long-term growth by focusing on affordability and delivering a value proposition tailored to the large lower-middle-class

. . .

Francis Dufay: In addition to our core geographies, we continue to see encouraging momentum across our other markets, but for you, which includes countries like Ghana, Uganda and Morocco.

Francis Dufay: Collectively, the markets deliver GMV growth of 17% and 23% in constant trends. We feel physically good orders, up 24% your volume.

Francis Dufay: Our playbook in these countries is essentially the same as in the bigger markets, with increased focus on cost management as we adapt to smaller market size.

Francis Dufay: We notice in this group very successful countries such as Ghana, growing 65% in GMB over here.

Finally, on the platform expansion.

Francis Dufay: We are rolling out Jumia Delivery, our in-house last-mile logistics platform as a service for third-party sellers, including social commerce merchants.

as well as individuals.

Francis Dufay: After successfully piloting this service in Ivory Coast and building the relevant IT tools, we have recently opened in Nigeria where we will make our network of 494 pick-up stations available for individuals and third-party merchants to ship packages nationwide.

Francis Dufay: We are currently securing the relevant licenses to expand to more markets.

Francis Dufay: This is a major strategic step that allows us to monetize our logistics infrastructure beyond the core marketplace.

Francis Dufay: By opening our delivery network to external volume, we are improving root density, enhancing cost efficiency, and creating a scalable logistic business that extends our value proposition across the whole digital economy.

Francis Dufay: Let me also touch briefly on the competitive landscape. We see three types of competitors in our African markets.

First, local social commiss merchants.

Francis Dufay: They will always be around and we are looking at this full of merchants as an opportunity for Jumia

Francis Dufay: We are working to onboard them to our marketplace and help them generate more sales. We are also looking to sell them our junior delivery services and generate profits from them.

Thank you. Thank you. Thank you.

Francis Dufay: Full-fledged e-commerce players, some of them focused on one market, such as Konga in Nigeria, and some international platforms such as Amazon and NuNi in Egypt.

Francis Dufay: We believe that our scale gives us an edge in sourcing and technology against players focusing on only one market.

Looking at international platforms.

Francis Dufay: We believe that we have deeply adapted our model to African markets, making us very relevant for the lower middle classes.

Francis Dufay: And third, Non-Resident Platforms, such as Timur and Shin, have been making moves in taking the African markets over the pastures.

Francis Dufay: We have knowledge the low prices and vast assortment, making them very worthy competitors.

Francis Dufay: Our main assets to compete with them are one, our own very competitive assortment from Chinese vendors.

Francis Dufay: 2. Our broad and highly efficient delivery network, and 3. The tailoring of our value proposition to local preferences.

which has offering payment on delivery or pick-up station deliveries.

Francis Dufay: Before closing, I'd like to touch on recent global developments and their potential impact on African-Ordentrumia.

Francis Dufay: While global trade tensions and geopolitical uncertainty continue to shape the broader macro

Francis Dufay: We do not expect material impact and consumer demand in our coal markets.

Francis Dufay: Exposed to the US remain limited, particularly in manufactured goods, and the confusion of certain international aid programs, such as USA funding, is expected to have only a very marginal effect in a few of the countries where we operate.

Francis Dufay: What we do anticipate, however, is a meaningful improvement in supply availability for African markets.

Francis Dufay: As Asian manufacturers look for alternative distribution channels and new consumer markets, Africa is becoming increasingly attractive.

Francis Dufay: Jumia is well positioned to serve as a strategic partner of choice, offering manufacturers direct access to millions of consumers for established logistics and commercial infrastructure.

Francis Dufay: This creates a potential tailwind for business as improving supply has been a central pillar of our recent information.

Francis Dufay: In closing, we remain fully focused on our key objectives of becoming a profitable company.

Francis Dufay: Our disciplined approach to cost management is delivering what we believe to be real, sustainable results validating our business model across multiple markets.

Francis Dufay: We remain confident in our strategy direction and our clear past was profitability.

Francis Dufay: I would like to sincerely thank all stakeholders, our investors, partners and particularly your dedicated Jumia team for your ongoing support.

Francis Dufay: I will now turn the call over to Antoine for review of our financials.

Antoine Maillet-Mesuré: Thank you, Francis, and thank you everyone for joining us today.

Antoine Maillet-Mesuré: As Francis outlined, we've taken decisive action to structurally lower our code base while preserving

Antoine Maillet-Mesuré: From vinegar-shading logistics and technology contracts to streamlining warehouse abrasions and tightly managing the accounts, every initiative is designed to drive lasting modern expansion and improve cash efficiency.

Antoine Maillet-Mesuré: With that compact in mind, let me know work you through our financial results for the first quarter.

Let's start with the review of our job line performance.

Antoine Maillet-Mesuré: First quarter revenue was 36.3 million USD, down 26% of the year and down 18% under constant

Antoine Maillet-Mesuré: The year of your decline in revenue was driven by lower copyright sales in Egypt and the continued impact of current city valuation.

Antoine Maillet-Mesuré: Please note, Jumia benefited from a hydro-corporate sale in Egypt during the fourth quarter of 2023, which contributed to the year of a Euro Comparison.

Antoine Maillet-Mesuré: As of March, we fully left the current heroin experience in early 2024 Egypt and Nigeria.

Antoine Maillet-Mesuré: Please provide the cure here over your comparison and set the stage for revenue growth moving

Antoine Maillet-Mesuré: Market page revenue for the first quarter was 18.1 million USD, down 30% year of a year, and down 26% on the constant currency ratio.

Antoine Maillet-Mesuré: Revenue from first-party sales was 17.8 million L.D., they're on 21% and on 9% of the

Turning now to Gross Profit

Antoine Maillet-Mesuré: Twitch Quadrobroth Profit was 19.9 million USD. The 36% of the year are 32% on a constant

Antoine Maillet-Mesuré: Gross profit margin was impacted by continuing macroeconomic adwinds, particularly currency

Antoine Maillet-Mesuré: Gross profit margin of a percentage of the envy for the first quarter was 12% compared to 17% in Q124.

Turning to Expenses

Antoine Maillet-Mesuré: All structural cut initiatives launched this year are not yet fully reflected in the first quarter, but are set to deliver savings or other coming quarters.

Antoine Maillet-Mesuré: That said, we continue to benefit from prior cut actions, particularly in full film and efficiency and more targeted marketing spend.

Let me walk you through the key extent line.

Antoine Maillet-Mesuré: Concelement expense for the first quarter was 9.4 million USD, flat year over year, and up 8% in

Antoine Maillet-Mesuré: However, full film and extensive order excluding Jumia Pay App orders decreased to 2.07 USD down 14% year-over-year or down 7% year-over-year on a constant currency basis, driven by operating Navurate and continue the improvement in efficiency.

Transcription by ESO. Translation by —

Antoine Maillet-Mesuré: Sales and advertising expense were 3.1 million USD for the first quarter, down 17% all year, and down 8% in

Antoine Maillet-Mesuré: The decline reflects continued discipline and the effectiveness of our more targeted marketing strategy. At the percentage of DNA, sales and advertising expense was 2% of 14 basis points retrieved from Q1 2024.

Antoine Maillet-Mesuré: Technology and content expense was 9.6 million USD for the first quarter, representing an increase of 6% year over year and at 9% in constant currency.

Antoine Maillet-Mesuré: We expect this line to decline in the coming quarters as we begin to capture settings from most clothes and ongoing contract negotiations.

Antoine Maillet-Mesuré: First quarter, GN Extence, excluding share-based payment extents, was 16.1 million USD at 5% year over a year and 11% on a constant currency basis.

Antoine Maillet-Mesuré: Straska's components of GNXPAN, excluding share-bed, compensation expense, it was to 7.8 million and the other result of ongoing account optimization.

Antoine Maillet-Mesuré: Turning to profitability. Adjusted to the give of the quarter or the negative 15.7 million energy or a negative 15.4 million energy on a constant grantee basis.

Antoine Maillet-Mesuré: Last before income tax, was 16.5 million USD, a 58% decrease year over year, or 25% decline

Antoine Maillet-Mesuré: The last in the quarter was primarily driven by 11.3 million units of decline in gross profits, largely reflecting lower corporate shares in Egypt alongside a 1 million units of lower operating expenses and a 33.5 million units of improvement in net financial results.

Turning to the balance sheet and cash flow.

Antoine Maillet-Mesuré: We ended through squatter with a liquidity position of 110.7 million USD, including 61.6 million billion USD cash and cash equivalent, and 49.1 million USD dam deposits and other financial assets.

Antoine Maillet-Mesuré: All Jumia's liquidity position decreased by 23.2 million in Q1 2025, compared to a decrease of 19.1 million in Q1 2024.

Antoine Maillet-Mesuré: Net cash low yield in operating activity was 21.2 million ruby in the quarter, including a working chapter impact of 8 million ruby, largely reflecting higher inventory levels of the bet to ensure product availability and assortment of the Jumia anniversary campaign, which is set to launch in early May.

Antoine Maillet-Mesuré: Capex in Q1 2025 was 0.9 million USV compared to 0.2 million USV in the first quarter of 2024, primarily reflecting investments in infrastructure and facility and maintenance to support the

Antoine Maillet-Mesuré: In addition, I would like to remind you that Jumia remains their tree.

Antoine Maillet-Mesuré: The borrowing you see in our findings relates fully to lease liabilities, recognized under I offer a 16 accounting turned out and do not represent financial debt.

Antoine Maillet-Mesuré: In conclusion, despite ongoing macroeconomic eduines, we did a strong usage growth and made progress on construction a clear evidence that our strategy is taking hold.

Antoine Maillet-Mesuré: We remain intensely focused on operational discipline with structural cost savings and margin expansion at the core of our 2025 priority.

Antoine Maillet-Mesuré: These efforts are positioning as not just for improved profitability this year, but for long-term, sustainable growth.

Francis Dufay: I now tell the cool back over to Francis for discussion of our updated guidance.

Francis Dufay: Thanks, Antoine. Based on current business trends, we are updating our 2025 financial guidance

Francis Dufay: We are raising our physical group's order's growth range to 20 to 25% from prior 15 to 20%.

Francis Dufay: GMV is projected to be between $795 million and $830 million in 25 euro over your increase of 10 to 15% respectively, excluding foreign exchange impacts.

Francis Dufay: We are updating our loss before income tax to be in the range of negative $15 million, a negative $55 million, a year over your decrease of 49 and 44% respectively.

Francis Dufay: For the second quarter, while we are not issuing formal guidance, we expect continued momentum building on the strong exchange for March.

Francis Dufay: We're anticipating physical goods orders growth in the range of 20-25% along with double-digit stop-line growth and further reduction in losses.

Francis Dufay: Looking into 2026, we anticipate further significant cost efficiencies projecting our loss before income tax to be in the negative $25 to $30 million range, marking continued improvement.

Francis Dufay: Thank you all for your attention. We are now ready to take questions.

Speaker Change: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker Change: You may press star 2 if you would like to remove your question from the queue. For participants using speak or equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please press star 1 on your phone if you wish to ask your question. And one moment please, while we pull for questions.

Speaker Change: And the first question today is coming from Brad Erickson from RBC Capital Markets, Brad

Thank you. Good morning, guys.

Speaker Change: So, maybe to start out, recognize the corporate sales weakness in the quarter, but can you remind us on the relationship where between orders, which I guess we're up 11% versus GMV, down 2% constant currency, recognize GMV would have grown, I think he said 10% in the

Speaker Change: Prepared remarks, but can you kind of just remind us the relationship between?

Speaker Change: You know, the corporate sales and the disconnect there between orders and GMB and then secondarily, maybe just on

Speaker Change: Corporate Sales in general, you know, clearly you've got some nice visibility and improving growth on the orders and physical orders in particular. How should we think about the volatility on corporate sales coming up here? And then I follow-ups.

Speaker Change: Hi, Brad. Thanks for the question. So let me take the first question, but the disconnect between I mean, the disconnect that corporate sales would create between orders and GMV is quite straightforward. Corporate sales are typically high value orders.

Speaker Change: To generate a lot of GMV with very small number of orders.

Speaker Change: So, as corporate sales decrease significantly, we typically lose a lot of GMV, but very two orders. So, that's why you see very healthy trends on orders, while GMV total GMV is down because of the impact of corporate sales.

Speaker Change: Then, if you remove the impact of corporate services we explain, you see that GMV is up 10%, which is consistent with our increasing orders of 21%, with a slight reduction of the average value mostly due to mixed effects and a very successful progress in lower value categories.

to that.

Speaker Change: That explains the disconnect, and that's also why I wanted to throw the numbers without corporate self for GMV.

Speaker Change: And then the volatility of B2B to your second question, so definitely corporate cells are a more volatile type of activity.

Speaker Change: especially in a market like Egypt where macroeconomics play a very important part. I mean, we had the collaboration master, for example.

and Stiller is still a lot happening.

Speaker Change: So we definitely see it as a more volatile business than the B2C business that's by definition a lot more stable, a lot more robust and fundamental trends.

Speaker Change: and we were not focusing massive volumes of corporate self-going forward.

Got it. That's super hopeful. And then...

Speaker Change: I guess when you think about, you know, maintaining its order volume and I was just taking the guidance up there, how should we think about the kind of use of cash from inventory level perspective necessary to?

Speaker Change: We'll fill those levels of growth. And you mentioned, I think you gave some color on this, but maybe just any other details you're able to share in terms of the shape of use of cash and inventory levels through the year.

Speaker Change: Yes, absolutely. So as you see in this quarter, a significant part of our cash burn is due to increase working capital that was mostly used to build up inventories ahead of significant commercial events.

Speaker Change: especially the Jumia University campaign that we're starting today. I mean...

Speaker Change: this week in some countries. We believe that we have sufficiently increased our inventory levels and that we have sufficiently invested in working capital going forward and we anticipate to much lower impact of working capital in the coming quarters.

Speaker Change: Got it. And then those interesting you mentioned, you're seeing some of the, are you expect to see some of these tailwinds from the supply front from Asia associated with the US tariffs and all that. Is it fair to say you're already seeing an uptick in this and did that have anything to do with with the raised physical order guidance?

Speaker Change: We're already seeing an uptick from international vendors, mostly Chinese, right? I mean, we've had very, very strong trends in items sales of the past quarters from our Chinese vendors. This quarter we're up 61% on gross items sold by international vendors, so the trend has already been very, very strong for the past couple of quarters.

Speaker Change: Going forward, what we're saying is that the fact that the American market becomes maybe a bit more difficult to access maybe also other markets will be a tailwind for us because it will make our access to supply from Asia.

Speaker Change: is here. I mean, and Jumia will be a real partner of choice to distribute to the large and African consumer pools. I cannot say that we saw an impact overnight, right? It's something that will be a bit more medium term, but these businesses...

Speaker Change: It's part of the business is already fairing extremely well thanks to fundamental work that's been done for the past two years and you anticipate that the macro events will be in our favour when it comes to capturing more supply from China.

Got it.

Speaker Change: And then, you know, the setup here through the year, given kind of the shape of the other volumes and some of the supply tail and everything, it would suggest you're kind of set up and long and you're, you know, I think, pointing to at least stable growth, it's not maybe a slight acceleration, but it feels like you're set up to maybe... [inaudible]

Speaker Change: Lean into marketing at some point and I recognize you're being really prudent with expenses and you mentioned some of the head count stuff and appreciate the line item.

Speaker Change: detail. But, you know, as we get towards the holiday and everything, how do you think about maybe leaning into marketing where you might have product availability to do so?

Speaker Change: So that's a very good question. So as you know, we spent the last two years fixing the basics.

Speaker Change: Significant in improving the product offering and price competitiveness which is definitely step one when you're dealing with very cost-conscious customers like we do in Africa. We've been massively improving logistics, quality of service and customer satisfaction.

Speaker Change: And now, in many markets, we're in a situation where the fundamentals are fairly strong, which you can see in the numbers that we disclosed for Ivory Coast, Nigeria, Kenya, for example, you really see the impact.

Speaker Change: of the deep transformation we've delivered on, well, basically on the value proposition, without investing much in marketing and much less than in the past, and you're sitting in the numbers that country level, even in those big markets.

Speaker Change: So now we are at the stage where in many markets of fundamentals of strong enough our value proposition is massively improved and we are able to reopen the box on marketing.

Speaker Change: So while in many instances we choose to save and we choose to be very conservative due to some specific context, very proposition or external events in the country, we may also choose to be a bit more aggressive in some instances.

Speaker Change: I can give you an example in Nigeria, we recently started the TV and radio campaign which we had not done for many years.

which is an additional investment.

Speaker Change: So, we're being more tactical and we're being more open to pushing marketing in the market, where we know that the Fundamentals are in place, the value proposition is stronger and we already think traction

Got it. Okay. And then shifting to the logistic expansion.

Speaker Change: I guess, you know, be curious to understand why now is the right time to roll that out. What did you see in the test that sort of led you to roll this out? And then talk about any sort of lag between investment to roll that out versus revenue coming in and is any kind of a drag on margins here, maybe near or medium term?

Speaker Change: So why now? That's a very good question, because in the past three years we've been very clear about the fact that we were refocusing the business. We're not opening new boxes, we're closing many boxes actually.

Speaker Change: Still, we believe that we are one of our most important assets we've built over the past 10 years in Africa is definitely our logistics network. And it's also the most relevant and the easiest for us to monetize with external customers outside of our existing marketplace.

Speaker Change: We've been piloting this in the Ivory Coast for many years already.

Speaker Change: and we recently developed the right IT tools to scale it very efficiently across more markets.

Speaker Change: And we've come to a point where our logistics network has been turned around in many markets. It's stable enough, strong enough and we are now able to open this box and start monetizing outside of the marketplace.

Speaker Change: This is something we could not have done two years ago, we had too much to fix internally.

Speaker Change: But now we're ready for that. So timing is important. The tools that we've developed to do it very generically are very important. And so that's why we're expanding now in Nigeria and we're in the process of getting the licensees to do so in many more markets.

Speaker Change: So with that, there's of course a lag between the moment we launch and the moment we see meaningful news, there's time to build up the business to create some awareness.

Speaker Change: to communicate to vendors and customers that we have starting from our database of vendors and customers but also to the broader market. So it will take time, it will take a few months of quarters to scale significantly.

Speaker Change: However, we do not forecast any negative impact on margins. I mean, there will be no drag on our economics. It's an additional business that will be profitable from day one. That comes with pretty much the ocapex and very, very limited additional expenses.

Speaker Change: So, uh, no negative impact on the focus of the organization and no negative impact on

Speaker Change: That's great. And then you mentioned significantly reducing cash burns and upcoming quarters. I think there's still a little bit of a gap there to kind of the loss before tax and the guidance and everything. So maybe maybe you could just bridge that gap or remind us on what that gap comes from. Thanks.

Speaker Change: Yeah, of course, so there are three elements here to understand the gap. One is working capital, right? We do not intend to keep on adding more working capital and we had over. But plus 13.7 last quarter plus 8 this quarter, we've reached a point where we don't need to increase working capital in any significant way going forward for that one. [inaudible]

Speaker Change: Second, a lot of the cost management measures that we have taken over the past three four months.

Speaker Change: We'll have impact throughout the year. Not everything is impacting Q1, as you can imagine. We have lots of, for example, take licenses that have been renegotiated and the anniversary date of the contract is later in 25. So these savings will become more and more significant throughout through 2025.

and lastly, we also have some level of seasonalities.

Speaker Change: And to give you the most obvious example, Q4 is usually our biggest quarter with very significant volumes. It's a high, it's a peak consumption season, even if we spend limited amounts in marketing or we maintain fairly good margins. So typically Q4 will deliver better economics than the rest of the year. So we expect further improvement, surely due to season editing as well.

Got it.

Speaker Change: Oh, go ahead. For a long time. Maybe to give a little color on that issue, if you think of technology, for instance, and more precisely about the whole thing.

Speaker Change: In 2024, we are the New York Commitment of 13.7 million U.S.I.

and all current 12-month commitment to the wrong company every day.

Speaker Change: Great and then final question for me you gave the 2026 guidance talk about the visibility there and and maybe any updates to kind of your profitability algorithm to in terms of volumes relative.

Speaker Change: And I guess, you're pointing to that hitting those levels at the end of 26, maybe just help kind of give us a sense for for what gets you there.

Speaker Change: So as we said our ballpark volumes that we would need to reach profitabilities more or less times, two and we're working hard to lower this bar by working on the cost base. So it becomes so we can get there faster we believe it can be achieved by two.

Speaker Change: Partly thanks to the growth that we'll get by then and also to due to the seasonality of Q4, which is usually a very strong quarter for consumption in our markets. So so yeah Q4, Q4 26, we will reach that bar and then we believe we are in good position to reach profitability over the full year of 2020.

Speaker Change: Very helpful. Thank you guys.

Speaker Change: Thanks, Brett. Thank you. The next question will be from Tracy Covenyu from S. P. G Securities Tracy Your line is live thank you congratulations.

Speaker Change: The gut results and.

Speaker Change: Guidelines in terms of competition, increasing from Asian, clears as well seeing that demand or other supply might be shifting one two towards Africa. So have you seen any increase in competition and in that question as well, what's the school international.

Speaker Change: What does a percentage of of of G. M V. Currently and how does that compare to the last quarter.

Speaker Change: [noise] Hi, Tracy Thanks for your questions. So the first part of your question looking at the the pivot of manufacturers and supply from Asia looking for new markets and heading towards Africa. So we believe it will help us as the as the middle.

Speaker Change: And Africa, there's also definitely the risk that it creates more competition from a new from well for example, non resident platforms on new new insurance looking to to push into to into Africa.

Speaker Change: Believe I mean, as we we touched upon this topic in the in during the presentation. Today. We believe we have in strong position to to fight that kind of competition. If specifically if we speak of competition from Chinese non resident platforms like Temu. We believe we're in a very strong position.

Speaker Change: So we we've seen that we've seen some afghan countries regulating multi against non resident vendors and platforms, which has the irony cost recently and we've seen some countries regulating multi around the deminist thresholds such as Yuganda recently so.

Speaker Change: So speaking different ways, but we believe that regulation will become more and more challenging for non reason platforms over the coming months and quarters for sure does that answer your first question. It does.

Speaker Change: Sorry can you remind me of the second one it was how how much international orders are as a percentage of GMV.

Speaker Change: Alright.

Speaker Change: Yeah, sorry, so we have not disclosed international orders items as a percentage of GMV. What you can fairly assume though is that the average items value from international vendors is lower than from the local marketplace because the typically focused.

Speaker Change: Accessories home accessories, electronic accessories, and so on so the kind of the team product range and these are lower value on average than the local categories such as T. V. You appliance and smartphones. So it's about one third of the items, we sell but it lower.

Speaker Change: Understood. Thank you I have some follow up questions as well I'm on the Jumier delivery's.

Speaker Change: I think in some conversations with clients. This has come up as a very attractive proposition and it's good to hear that it's coming on online I just wanted to understand the monetization behind it I know you've already said that it.

Speaker Change: Ready a lot on the existing infrastructure. So it's mostly straight postability, but how does the mortization look compared to marketplace revenues. For example would you say, it's more of a high volume or would you see that sort of.

Speaker Change: Speak would be would be similar and maybe in line with that as well just wonders.

Speaker Change: Long deeper pilots process taken in Ivory coast before Missouri to become available business. So maybe what I'm trying to understand is what what would be your sort of scale for you to say okay. This this business is.

Speaker Change: Yeah. So let me let me explain how it works that's very straightforward. So in practice any individual or small social commercial can go to a jumia pickup station drop five packages to ship to other cities in the countryside and July.

Speaker Change: As simple as that's in the pay when the drops that they will pay a fee per package, depending on the size and weight of the package. This is definitely a business, that's higher margin and lower volume than the marketplace because the price points. The pricing has been designed to generate very significant.

Speaker Change: Six, but we know that we're not going to match the marketplace volumes anytime soon so higher margin lower volume definitely it's designed to be profitable from day, one because a viable costs for shipping are very well known for US is typically the fee that we pay to.

Speaker Change: A bit of of line hole cost and we've priced accordingly with fairly high margin to make sure that it's profitable from from the first package.

Speaker Change: So that's why we know that it's something that's valuable in any country. The pilot in Agricols lasted many years actually but we kept it going for many years one because we didn't really have the right I title at the time to scale across more countries and we didn't want to create a miss and.

Speaker Change: Logistics network in the other countries were not ready yet to to open this new box. So it was not about proving the viability of the project. We we already knew that it was profitable. It was just it was mostly about being sure that we could scale seamlessly across more countries in.

Speaker Change: And yeah. So you can expect something that's profitable from day, one there's no drag on the margins that will not be at anywhere close to a scale of the marketplace of course in the coming in the coming months, but that will definitely help on the margin.

Speaker Change: Maybe just an additional follow up on that how significant is the delivery is business to to revenue five every cost at the moment.

Speaker Change: I cannot commend because we have not disclosed so it's definitely lower than the marketplace revenues of course.

Speaker Change: That's something we still believe we can scale further in the every cost, but it's a very profitable business by designer.

Speaker Change: Okay. Thanks, then my last two questions is regarding the.

Speaker Change: A customer growth and profitability in your subsidiaries I really appreciate the additional color on contributions from the top up countries and it's I just wanted to understand that dynamics of customer growth, which was the regions.

Speaker Change: For that drove drove that I started to see strong acceleration in Nigeria. For example than every cost which has been much stronger for longer and maybe a reminder of where we're sitting in terms of.

Speaker Change: Ability for for the businesses are there any of those top four businesses that are have broken even and in terms of your part profitability, which which which of those countries do you think.

Speaker Change: Sure. So let me take active customers grow to start with so you see this quarter with growing active customers by 15% year over year, excluding discontinued operations, which is our highest growth rate in about two years. So we're very happy with the acceleration of base in.

Speaker Change: You'll get cancer level, so since we've disclosed orders growth in the in the top four markets you can fairly assume that active customers growth is closely linked to the growth of orders right. What we've seen the numbers is that the number of orders per active customers is.

Speaker Change: Great or run away for I give consumer growth in a country like najaya and in some ways in the country like Kenya.

Speaker Change: Now when it comes to breakeven at country live at country level. So we have not disclosed financials at country level and we do not we're not looking to do so what you may remember is that a few quarters back we mentioned that several countries had been repatriating cash and were.

Speaker Change: I request, Kenya, and Nigeria. So one one thing that we're seeing across the board is that scale really drive profitability and Redrive strong economics strong bottom line in our markets. So that's why we're reading.

Mm. Thanks for all this my very last question would be back on on customer groups.

Speaker Change: And then it is indeed quite quite a strong performance what what would you say is the overarching contributor to to that is it.

Speaker Change: Improving operating environment is it higher diversity, what what would be the strongest contributor to to that customer good performance.

Speaker Change: At this stage customer's growth is driven by improved product offering better price points and better supply both from the local marketplace and international vendors and up country expansion. That's really the two pillars of our customer growth as simple as that this have been the same for.

Speaker Change: Customer growth going forward as we discussed before we have not really tapped yet potential accelerations on marketing that could help us go faster in the countries, where we have the right from them.

Speaker Change: Thanks for address and that's all for me. Thanks racy. Thank you.

Speaker Change: This does conclude today's Q and a session and also this does conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.