Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the fourth quarter of 2019. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Safae Damir, Head of Investor Relations for Jumia. Please go ahead.

Thank you, Andrew. Good morning everyone. Thank you for joining us today for our fourth quarter and full year 2019 earnings call. With us today, are Sacha Poignonnec and Jeremy Hodara Co-Founders and Co-CEOs of Jumia; as well as Antoine Maillet-Mezeray, CFO. This call is also being webcast on the IR section of our corporate website. We'll 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 final prospectus filed in connection with our initial public offering on April 15, 2019. 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. And with that, I'll hand over to Sacha.

Thank you, Safae and welcome everyone. Thanks for joining the call. We wrapped up 2019 with a very busy fourth quarter. We had our highest volume of orders ever, surpassing 8 million. And we also took important actions to support our path to profitability and long-term growth. Before we go into the results in details, I would like to briefly summarize these actions, so we can all look at the results with this in mind. First, we initiated a rebalancing of our business mix towards higher consumer lifetime value business. In practice, this means reducing promotional intensity on certain product categories and items, while contrastly driving faster growth of the more affordable, higher purchase frequency ones. This led to a softer GMV growth, but it supported consumer acquisition and the usage growth. As a result, our annual active consumers reached a record 6.1 million and orders increased by 49% on a year-over-year basis. We are confident about the relevance of this business mix rebalancing because, it supports not only usage on our platform, but also our path to profitability. Gross profit grew 64%, reaching €25 million in Q4 and gross profit after fulfillment expense was positive at €1 million in Q4 compared to a loss of €2 million at the same period last year. The second series of actions we took, relate to the portfolio optimization that we had flagged in our Q3 earnings release. And here, we exited three countries, Cameroon, Rwanda and Tanzania. And while we believe that those countries have a lot of potential in the long term, we decided to allocate our resources to the countries that best support our long-term growth and path to profitability. Our pan-African footprint and geographical diversifications are key assets for us and we continue to invest across our 11 countries of operations. And two, we entered into a distribution and commercial agreement in relation to our travel portal which is flight and hotel booking. And as part of the agreements, we continue to promote those services on Jumia that we redirect the relevant traffic to our partner who manages the operational aspects of the business. We are very confident that this enhanced focus and those efforts to optimize our capital allocation will help us to build stronger foundations for the long-term success of Jumia. So, again we feel very strong about those actions that we took in Q4 both on the business mix and the portfolio optimization and we think they will meaningfully contribute to our success. And I will now pass it on to Jeremy who is joining us today and he will walk you through our Q4 performance in more detail.

Thank you Sacha. Hello, everyone. If you'd like to join me on page 5 please. Let's take a closer look at our top-line growth dynamics. As mentioned by Sacha, we are focused on driving usage, consumer adoption and engagement on our platform. This led us to rebalance our business mix in favor of the categories that best service these objectives, while supporting our path to profitability. As part of this rebalancing and to address the profitability aspect, we reduced promotional intensity and consumer incentives on selected product categories and items, notably within the phone and the consumer electronics categories. The chart on the left of the slide shows that most product categories experienced GMV growth in the 20% to 50% range in Q4 2019, compared to Q4 2018, while phones and consumer electronics saw GMV declines. In terms of items sold, most of our product categories saw robust growth above 40%. And even the phone and the electronic categories increased in terms of items sold. These are still very relevant categories for us and they drive usage and consumer engagement. We believe the build-out of the everyday product categories is key to meaningfully penetrating our addressable market and driving the e-commerce option. Looking at our top line growth drivers at group level on slide 6. We see a headline 3% contraction in GMV in Q4 2019. Adjusting for perimeter changes as a result of the portfolio optimization undertaken in the quarter as well as previously reported improper sales practice, GMV of Q4 2019 would have been €293 million, up 6% from €275 million in Q4 2018. Annual active consumers for the full year 2019 reached a record 6.1 million. It's up 54% compared to 2018. Our net consumer adds in 2019 were 2.1 million compared to 1.3 million in 2018,…

Thank you, Jeremy. Hello everyone. We are now on page 14. In parallel, we're driving usage and consumer adoption of our platform. We seek to monetize this usage and transactional activity in a gradual manner. Marketplace revenue increased in Q4 2019 by 50% year-over-year, primarily driven by increased usage of our platform and our efforts to build and monetize a suite of relevant services to our platform participants. Gross profit rose 64% year-over-year to €24.8 million, with our gross profit margin rising to 8.2% of GMV, up 336 bps in 12 months. We are very pleased with the material step-up in gross profit, as this is partly a result of the enhanced promotional discipline we enforced, as well as the rebalancing of our business mix towards margin-accretive business. Let's now take a closer look at our various Marketplace revenue streams on Slide 15. Commissions, which are fees charged to our sellers, increased by 62% year-over-year. Commissions growth outpaced GMV growth, as a result of an increase in the share of product categories with higher average commission rates, notably fashion and beauty as well as enhanced promotional discipline and reduced deployment of consumer incentives, some of which are accounted for as deduction from commission revenue. Fulfillment, which comprises delivery fees charged to consumers, increased by 52% year-over-year, in parallel with order growth. Changes in the packages mix, notably an increased proportion of packages shipped from overseas sellers and increased deliveries outside priority cities contributed to the increase in the fulfillment revenue. We saw double-digit gains in value-added services revenue, which include services provided to our sellers around logistics, packaging and content creation. As we move into 2019, we further expanded the fourth leg of our monetization strategy with marketing and advertising services, which represented 9% of our Marketplace revenue in Q4…

Thanks very much. I think, we are making very good progress and, certainly, we made the right decisions to be more focused. If you look at the results in Q4, you can see still very robust growth and efficiency gains. The headline GMV growth is lower, but we are comfortable with that and we are driving that. And as you have seen in almost all categories are still growing strongly. Now before we go into Q&A, let's look ahead. Our goal for 2020 is to continue to deliver on the four pillars of our strategy and to do it while reducing our adjusted EBITDA loss in absolute terms, compared to 2019. We previously said that we want to show a clear trend of EBITDA loss reduction and we remain committed to that. Now if we take each pillar in terms of usage growth. We've seen during 2019 that the growth in consumer adoption and orders outpaced the GMV growth and we will continue to see the same trend across at least the next two quarters. Because, first, the effects of the business mix rebalancing that we initiated will continue to play out over the first half of 2020. We will continue to enforce stronger promotional discipline and we will continue to drive growth of the everyday product categories, which are great consumer acquisition categories and high purchase frequency ones as we mentioned. So as a result, we expect flat to negative GMV growth year-over-year over the next two quarters, with a stronger, of course, growth of orders and active consumers. Secondly, of course, there is the recent virus outbreak in China, which is likely to affect growth over the coming quarters. And here, we are starting to face some challenges to fulfill our cross-border sales. Also, many of the sellers…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Mark Mahaney of RBC Capital Markets. Please go ahead.

Thanks. I think I'll just stick with two questions. One can you talk about market share shifts in those 11 core countries where you operate? Is it clear to you that have maintained market share? Or do you think that you've lost market share? And then any particular markets you could call out would be helpful? And then secondly, in terms of getting to a path to reaching self-funding status so a little bit more detail perhaps on your EBITDA loss goals. It sounds like you expect EBITDA loss be lower in 2020 versus 2019. Should we start seeing a sequential decline in EBITDA losses in absolute levels starting in the March quarter? Is that later in the year? And when do you actually think you'll be able to reach EBITDA breakeven or reach a point where you're self-financing? Is that by the end of 2020? Or is that 2021? Thank you.

Thanks, Mark. On the first question about market share, I mean, it's something we hear we have not seen any very meaningful change in the competitive landscape recently. And so to some extent the categories where we decided to be more disciplined and consciously drive some contraction I think on those we're very comfortable with that and we don't see any significant shift here. So this is very much driven by us rather than anything else. And in terms of EBITDA and timing so we're not going to comment on timing because we really want not to establish this trend. And I think as we have said last time our goal is to really show a clear trend and show some clear milestones of profitability. And yes, we want to have an absolute EBITDA, which is going to be lower in absolute term the lower loss in 2020 versus 2019 and we want that. Of course on a quarterly basis we established this trend, right? So we will have to see how this trend plays out. It's hard to tell exactly how it's going to play out because of course on a quarterly basis there may be some fluctuations. But we certainly want to see that trend be very clearly established over the next four quarters. So here we'll have to see how this plays out. And from there as we reach those milestones we will bring you those milestones when we will see for example certain countries or certain new aggregates reaching profitability. I mean this year we were profitable after fulfillment expense. One day we will be profitable after marketing and so on and so forth. And as those milestones come together we will bring them. So here it's our commitment to do that.

Okay. Thank you.

The next question comes from Aaron Kessler of Raymond James. Please go ahead.

Great. Thank you. Just circling back on the GMV growth. I think last quarter we talked about kind of 20% to 30% GMV growth. Can you maybe provide a little more clarity? Was the updated kind of view was -- or I guess was the previous guidance not contemplating declines in the electronics and film categories? And if we looked at the GMV growth kind of ex-electronics and phone kind of what type of GMV growth do you see in quarter? And how has that trended? Thank you.

Yes. Thanks for the question, Aaron. Yes, I'll start with the second one. I think you -- we've published on the page the growth by category in terms of GMV and you can see most of the categories are between 20% and 50% indeed. And of course in volume this is even higher. I think last time when we spoke that's what we were forcing. And here we're not necessarily trying to solve for a particular number on that. And I think, we're also going with where the consumers are going. And I think we have many discussions with many of you. Would we rather have six million consumers and ex of GMV? Or would we rather have less consumers more GMV and all those considerations. I think here our intention is very much to drive the usage of Jumia. And we look at the usage of Jumia by how many consumers use it, how many times do they use it, how much they spend and all those metrics. And so I think we are really solving for that equation of driving the right usage and driving the best usage, which puts us in a position to really meaningfully capture the long-term market share with those consumers as well as monetizing the platform the most effectively, right? And the usage – the more consumers, the more orders this helps us a lot to drive, of course, the adoption of JumiaPay because the more transactions that the consumers do the more chances we have to convert them. Also, the marketing and advertising is really good and also the volumes in terms of fulfillment. So I think we were seeing this 20% to 50%. And I think we had more reduction on those categories than we anticipated because that's where we saw the results going. So I think that's it. And that's why also, for this year, we want to rather give you the trend qualitatively in terms of where the usage is going to go. And I said that, the GMV would likely be flat or declining in the first two quarters and the other ones growing flatter than giving you actual numbers, because I think throughout the quarters we can see sometimes some evolutions and we want to here give you rather a qualitative trend than quantitative on this one.

Great. Thank you.

Sure.

The next question comes from Sarah Simon of Berenberg. Please go ahead.

Yes. Hi. I've got three questions, if I may. The first one was on active users. You talked about the growth rate versus the four million at the end of 2018, but I'm guessing that the four million includes people who are in markets, which you've subsequently exited. So do you know what the like-for-like number would be in terms of customer numbers? I'm guessing the growth rates were even higher. Second question was on China. Is it right to assume that the shift away from electronics and phones probably makes you less dependent on China in terms of orders coming from there than before? Any color you can give on that would be helpful. And then the third one was on the rate of cancellations cell deliveries and returns. I'm kind of surprised you didn't highlight the good improvement in that. But can you talk about what drove that? Is that just JumiaPay? Or is there also any benefit from the new pickup infrastructure that you put in place in terms of the deals with Total and stuff? So anything you can give us there would be helpful. Thanks.

Sure. Thanks, Sarah. I think on the active users you are right, there's definitely some impact here. At the same time, because we report the active users on a 12-month basis and we close those countries and geographies towards the end of the year, it's rather limited right? So that's why we didn't want to call this out, because by design there is a little bit of that. So the growth will be even higher, but it's not very meaningful. In terms of the phones and China, yes of course, I mean, almost every consumer electronic product in Africa, but also I think in the world is manufactured in China. So it's – we will be less dependent for sure. At the same time, all the other categories in some way or another they depends some – in some way or another on a broader supply chain which included a lot parts and a lot of semi-finished products et cetera, which can be manufactured in China. So I wouldn't be too – it's good in some way. But the rest to some extent depends on China as well for packaging and for accessories and for a lot of things even in many different industries. But certainly, phones and electronics are probably even more dependent. You are right. The rate of sales deliveries and cancellation returns I think we're – we've been saying that this rate has been going down with time. And here, we will need to highlight it as an update, right? Every now and then we give some updates on some topics. And certainly we're very pleased with that. And this is something that we have seen over the years to continue to play out. And there's really no silver bullet behind that, but rather multiple trends and…

Thanks. Can I just ask one follow-up? The ban on scooters in Nigeria, that's just taxis, right? So, it shouldn't -- is it right to think that it shouldn't affect you?

Correct. This is really--

The Lagos scooter taxi ban?

Exactly. So, this is specifically to the transportation of people and we are not impacted at all. Also because our deliveries take place with a mix of motorcycles, cars, and trucks, as well as pickup stations as we just talked about, right? So, the ban is specifically on the transportation of persons, people, and on motorcycles and in the tricycles.

Okay. Thank you.

The next question comes from Brian Nowak of Morgan Stanley. Please go ahead.

Thanks for taking my questions. I wanted to talk about 2020 GMV a little bit. I think it's come down quite a bit versus certainly a year ago. Curious to sort of think about as you sort of step back, what are sort of one or two of the biggest surprises that you think sort of caught you off-guard in your ability to grow GMV this year? And just so we can sort of have the one, two bullets what are the key steps you're taking to sort of fix those challenges that you've had over the course of the last year on the GMV front? And then on the -- going back to sort of the breakeven starting to get to EBITDA breakeven. Given the cost reductions you've taken the efficiency improvements, are you in a situation where you could get to breakeven even if GMV doesn't grow in 2020 or is getting to breakeven prior to the GMV growth? Thanks.

Sure. Thanks Brian. So, really -- yes, I think in terms of how we saw 2019 play out, I think we saw throughout the year and I think we have seen it together as we were looking at the numbers really and we have brought those analysis and the growth of the categories and the growth of the items sold per categories, we have seen a clear faster uptake of those lower item value items the lower-value items and the categories which are more affordable, right? And I think this has been possible because we have put over the last two three years, this is something that has started a while ago, a lot of efforts in driving those categories, for example, the grocery category, the FMCG, the food deliveries, also consciously driving more affordable assortment in the fashion categories, and also in the mobile phones and mobile accessories etcetera categories. And I think as we saw the year playing out, we saw that there was this amazing engine to drive consumer acquisition. And I know you and I we talked a lot about back then the number of users that we would get for the year, right and this equation between the number of users and the GMV. And I think here we have seen that the success of those categories and the strategy to drive the usage of Jumia in terms of the number of consumers and the frequency and the number of purchases and made us really reallocate our focus towards those categories. And as we did that, we decided to be also selective with some of the incentives we were -- and the promotional intensity that we were putting behind mobile phones and laptops and certain categories like that which are very price sensitive. And if…

Great. And then just the question on breakeven, if you are in a situation where GMV may not grow this year, could you still approach breakeven? Or are you still predicated on leverage to get to breakeven?

Yes. No we could still very much right? And again as I said, if we are gross profit after fulfillment positive on an order basis and we're growing the orders very fast, we will be closer to breakeven "regardless of the GMV", right? So I think we still want to see some GMV growth because it's one of the indicators for us of the relevance. But certainly being on an order basis, positive after fulfillment is a very good situation to be in right now because as we see more orders we get closer to profitability.

The next question comes from Ralph Schackart of William Blair. Please go ahead.

Hi, good morning, two questions. First how much opportunity do you still have to rebalance the products and portfolio mix and potentially further reduce any incentives in the platform? Are the major changes done? Or maybe talk about the opportunity to rebalance further impacts the business? And maybe the follow-up just on JumiaPay for business maybe talk about that opportunity a little bit more please? Thank you.

Sure. Thanks Ralph. I think we've done quite a bit on the rebalancing already. And so the way we are driving the business already now in January February is quite close to how we were driving it already in November. We're still always optimizing, right? So we look at every consumer, marketing channel for example. And we look at the consumer lifetime value and so on and so forth and we review our category mix, but also our local footprint right, so certain regions, certain cities. It's constant optimization. But I would say, maybe 80% of what we did in Q4, we still do in Q1. And then we added even more in Q1. So I think, the heavy lifting is done. But the rest is more like constant optimization of the business mix and the category, on a consumer, on a marketing channel, and on a geographical basis. JumiaPay for business is of course a very big opportunity for us, both, in terms of, I would say operational efficiency, in terms of future monetization potential. And the way we are approaching this is very much around -- we want our sellers, to see some value in using JumiaPay. To give you a simple example, today we have as you have seen dozens of thousands of sellers. And almost on a weekly basis on average, we send them a bank transfer, which is the payout of the business that they have conducted on Jumia. And right now we are piloting that, instead of sending them a transfer. We actually credit their JumiaPay wallet. As we do that of course, they can go into their JumiaPay wallet. And they can withdraw that money on their bank accounts. Because of course they still need a bank account to operate their business. But…

Yeah. That's great. Thanks, Sacha.

This concludes both the Q&A session, and the Jumia Technologies Fourth Quarter 2019 Conference call. Thank you for attending today's presentation. You may now disconnect.