Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia’s Results Conference Call for the Third Quarter of 2020. [Operator Instructions] I’d now like to turn the call over to Safae Damir, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our third quarter 2020 earnings call. With us today are Sacha Poignonnec, Co-Founder and Co-CEO of Jumia; and Antoine Maillet-Mezeray, 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 recent 20-F filings. 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. Welcome everyone and thanks for joining the call. I hope that you are all staying safe and well. About a year ago, we took several decisive actions in order to accelerate our path to profitability and strengthen our foundation for long-term success. Those were not easy decisions to take and implement, but they are now starting to pay off, in this despite a very volatile environment in Africa, where COVID-19 has rather been a headwind for us so far. Today we bring results, which show that we are very well positioned and that our path to profitability is becoming clearer and clearer. I want to thank all our teams, all our partners for their discipline, their dedication and hard work. We are immensely grateful for their continued support. Together, we are on a great mission to make e-commerce successful in Africa as was the case elsewhere in the world and drive positive impact in the process. Let’s turn to Page 3. We have been very consistent in the strategy outline to the markets. Now, I appreciate this may sound a little bit repetitive to some of you, but I think it’s very important to reiterate that the strategy remains unchanged. It’s the balance of four pillars, growing the usage of our platform, driving the penetration and development of JumiaPay, gradual monetization and cost efficiency. Obviously, those four pillars are linked to each other and to some extent, conflicting with each other. And we manage this equation on a dynamic basis, placing more or less emphasis on each pillar as we progress. Everything we do is geared towards building a very strong platform with a very strong foundation to create long-term value. If we take a look at some of the key actions and I’m now on…

Thank you, Sacha. Hello, everyone. In parallel with driving usage, we continue to gradually monetize our platform. In the context of a 28% year-over-your GMV contraction, Q3 2020 marketplace revenue increased by 19% and gross profit by 22% over the same period. As we drove the usage of Jumia, we seek to gradually monetize this usage to diversified revenue streams that absorbed a growing share of our cost base. Taking closer look at all various marketplace revenue streams on Slide 20. You’ll see that, commissions increased by 43% year-over-year due to an increase in the sale of higher commission rate categories, including fashion, beauty or FMCG, as well as lower promotional intensity. Fulfillment revenue increased by 13% of the result of continued shipping fees adjustment as well as pricing changes within our cross-border logistics, part of the international shipping fees that were previously charged to sellers were instead passed on to consumers. This change resulted in some of our international logistics revenue to be recorded as fulfillment revenue, instead of revenue from value-added services. Value-added services increased by 4% as adjustment to our shipping fees led to an increase in shipping contributions from local sellers, which more than offset the effects of the pricing changes in our cross-border logistics. We manage monetization pressure on our sellers in a very disciplined manner and, during the third quarter of 2020, reduced pressure on the advertising front leading to a decrease of 2% of this revenue stream while placing more focus on fulfillment costs pass-through. It is worth noting that we remain in the early stages of our monetization journey. Commissions and fulfillment fees, which are the bread and butter of the marketplace still account for more than 70% of the marketplace revenue. We intend to further diversify our revenue mix, leveraging multiple…

Thanks very much. And to conclude, let’s – I would like to give you some perspective on what – how we see the achievement to date and where do we go from here. We opened the call by saying our strategy is a balance of four key pillars, and that we manage this on a dynamic basis. I think over the past 12 months, we drove the business and those four pillars with a sharp focus on profitability. And we are – in our opinion, delivering very strongly against that objective. If you look on Page 26, comparing our business for the first nine months of 2019 versus 2020, I think it’s very clear that it’s working. We have improved everywhere and pretty significantly. Only GMV is down. And this is largely by choice. And as you have seen, there are lots of buckets of growth in our business, both in volume and in value. We now have a business mix, cost structure and fundamentals to support the long-term profitable growth of Jumia. And once again, this has been achieved without any volume surge or any particular tailwinds. So it speaks to the quality of the underlying business, and it makes us very confident about our path to profitability. Now you may ask the question about why we are so focused on profitability right now, and we wanted to remind you why we are so focused on profitability. We think that our business model is proven, the success of companies like Mercado Libre, Alibaba, Amazon, I think there’s not really any doubt about that. Secondly, the potential of Africa is huge. There are decades of growth ahead of us to drive the adoption of e-commerce and payments. E-commerce is very relevant in a continent where distribution of goods and services…

[Operator Instructions] First question is from Ralph Schackart from William Blair. Please go ahead.

Good morning. You made some really good strides in logistics and marketing fulfillment expense decreased during the Q3, I think down by around 20% and 55% or so year-over-year respectively, which is really great progress. Sacha, you talked about doing this in an environment without a surge in volume. Well, maybe just kind of taking a step back, I’m assuming there’s not – I guess near term or outlook for a surge in volume. Where do you think further progress could go on this front? Do you really need that surge in volume to continue to get these really decreased – strong decreases in expenses year-over-year? Just maybe some more color on this, that’d be great. Thank you.

Yes. Thanks, Ralph for the question. And I think one of the – it’s a very good question and we’ve kept repeating over the last two years as we became the process of going public, that we were betting not on any surge, but rather gradual adoption of e-commerce in Africa and that all things considered, we don’t need much to change to take the company to profitability. But we just need to continue doing what we’re doing. And I think if I look about – if I look at, how – where do we go from there? I think from a unit economics improvement, there’s a lot that we can still do to continue to increase them, right. And number one, there’s a lot of monetization avenues that we have just started to explore and some of them that we have not even started to explore. And those monetization avenues, they include our own ecosystem and even going outside the ecosystem, right? So I think there’s a lot we can do to further increase the advertising services that we provide to sellers, and to third parties. We have just started to open up Jumia Logistics with third-parties, and this is going to be a gradually increasing and contributing over the months to come. We have not even started to monetize JumiaPay at all. We are not making any money on payment service provider activities and so on. So I think there’s a lot that we are going to do to increase revenues even with the same size of the business. Secondly, on the cost side, of course the cost, to some extent, we need volume to drive meaningful improvement. But there’s still a lot that we can do to improve on the cost. So the unique economies will continue to improve regardless of the surge. Now without a surge, I think we’re going to continue to grow. And we have brought you some details and opened the box for you to see where the growth is. And we are very confident that there’s a lot of growth in the business and that the growth is where we want it to be. And we are extremely confident of the relevance of the business model and that we’re going to continue to grow especially where we want it, right? So there’s going to be some volatility, but we’re going to keep bringing you the situation. And then if there is a surge then even better, but we are not betting on it, we’re betting on the same trajectory, meaning that we’re going to grow where we want in selective areas, which are relevant to consumer lifetime value and relevant to our margins. And as we do that and work on the monetization and cost efficiency, I think we have a very good a year ahead of us and very good position to drive the business forward.

Thanks for the extra color Sacha.

The next question comes from Mark Mahaney from RBC. Please go ahead.

Thanks. Let me ask two questions, please. First, for the first time, you had a decline in active customers, sequentially, I know it’s a trailing 12-month metric. But could you talk about that? And is there something you can do to stabilize that? Should we expect the customers to come down, is that part of the rationalization, are you trying to shed unprofitable customers? Or is that something that you can reverse? I assume that the goal would be to grow active customers over time. So just talk about what happened in the quarter over the last 12 months and in your confidence and your ability to grow that? And then secondly, with 1P revenue and there’s so much focus that you have on the marketplace business for understandable reasons, better economics. Do you think that there’s – is it reasonable to assume that you’ll just flat out exit the 1P e-commerce market and just focus on the marketplace business? Thank you very much.

Thanks, Mark. And I think very good questions, too. Before answer on the Q2 to Q3 active consumers, I think it’s important to remind that the active consumers are, as you pointed out, but I want to make sure it’s clear for everyone, on an LTM basis, so those are the last 12 months active consumers. So when we compare Q2 2020 and Q3 2020, we are comparing the last four quarters, so Q2 2019 to Q2 2020 to Q3 2019 to Q3 2020, right? So there are lots of dynamics that can happen in this metric. And I think it’s quite important to keep this in mind. Now, of course, I think when we look at Q2 and Q3, we are seeing a trajectory where between Q2 and Q3, we have continued to make a lot of progress on efficiency, right? We have decreased our Sales & Advertising expense by about 14% between Q2 2020 and Q3 2020. We have increased our efficiency if you’re compared to the last 12 months to the active consumers. We have increased efficiency by 16%, right, between those two quarters. So I think you need to keep this in mind, to some extent, it’s also a result of some of the choices we are making. And on the CLV, so typically, there will be some of those consumers who we deemed to stew. We observed that those consumers are only reacting to promotions on airtime and things like that. So probably be some of those consumers has disappeared as part of our choice to only focus on really positive consumer lifetime value consumers. So there’s must be some of that. And then I think, we don’t expect this trend to continue right over time. We expect that the trend will continue to go…

Okay. Thank you, Sacha.

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

Great. Thanks, guys. A couple of questions, maybe just follow-up, kind of, on the last question. I think also noticed the average order value is down about €5 sequentially, and I think it was about a similar level of electronics to last quarter speak to, good to get some insights on the average order value. And then just maybe on the advertising, kind of, how are you thinking about kind of the optimal level of advertising, do you think you’re as of today? Maybe which channels are you more focused on as well, going forward here? And finally, just any Q4 trend, quarter-to-date trend, you would point out as well. Thanks a lot.

And thanks, Aaron. On the advertising, you mean on the expense right not on the revenue, right?

Correct.

Yes. Yes. So the AOV, first is bringing that something that we sold for, right? The AOV for us, we see it as an output of the usage of the consumers in our platform. And it’s not something that we are necessarily focused on trying to drive a higher or lower AOV, right? We are focused on driving relevance, and certainly, we have been driving a lot of the everyday categories, which lower items value. So we were very much expecting this drop of AOV and something that we have been planning, but in a way, we observed the AOV more as an output of what people decide to buy and what also items people decide to buy. And the AOV is also a function of the number of items that people put in their basket and the price of this item. So there’s just so many factors which go into the AOV. But first, we observe AOV, we post rationalize it, because of course, this is something that we look at, but it’s not something that we sold for. And we don’t have a particular goal. Our goal is that our consumers are CLV, consumer lifetime value, their value is positive. And but when they do orders, those orders take us to profitability, right? So I think, AOV is what it is and it’s moving in – in the right direction, according to us. And it makes a lot of sense, but we don’t sold for a particular number and nor do we aim at a particular number for the business. And on the advertising, we are primarily driving spend for the online and performance channel. It’s the majority of our spend, and here is, of course, the mix of all the existing channels. And it’s very diversified, I would say, and it’s very granular. But it’s a mix of performance channels like app installs and then retargeting and an affiliate et cetera. So it’s a lot of the – I would say performance marketing channels, very granular and very programmatic and performance-driven. And then we have the next most significant is the offline commissions that we offer to our JForce program people, right? So remember from previous discussions, we have a very attractive JForce program, where individual people can sign that and can earn commissions and fees when they recruit new Jumia users. And so we have this program pretty much live in our geography then it’s very successful. So it’s also a meaningful part of the advertising expense. And we think that it’s going to continue being very granular, being very diversified, we are constantly looking for ways to optimize and also looking for ways to create new advertising channels for the users to recruit new users.

Got it. And last question is, any Q4 trends and the financial in official guidance, any Q4 trends you would speak of to date?

Yes. I’d say early to talk about that. And we just launched Black Friday. Black Friday for us is actually almost a full month of a shopping festival. And so we started last Friday in most of the countries and it’s an event which is based on, of course there are four Fridays, which have bigger offers and bigger commercial events, I would say. But it’s something that really builds that. So it’s a little bit too early to tell, unfortunately.

Okay. That’s helpful. Thank you.

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

Yes. I’ve got three questions please. First one on SG&A, what do you think is, the right or let’s say sort of stable quarterly SG&A costs, because obviously, the numbers come down very significantly. Should we expect that keeps coming down or do you think we’ve kind of had the right level? Second question is, if you look at GMV and you’ve given a helpful spread of mobile phones coming down. But actually what that implies is that everything that’s not mobile phones and electronics is flat to slightly down to. And I’m wondering if there are categories within that that have been particularly weak versus others that have been strong because obviously you’ve talked about very strong growth in food delivery, and you’ve talked about FMCG category is growing strongly in the past. And then the final question. I appreciate you don’t want to give any guidance yet on Q4, but obviously, you started – well, let’s say, we started to see in the numbers this significant shift towards selling profitable goods in Q4 last year. So is it reasonable to think that the rate of decline in the raw GMV should moderate in Q4? Or do you think there’s just still more of this shift away from high priced goods still to go? Thanks.

Yes. Thanks Sarah. And I wish we had a crystal ball in a way or that we could. But I think on this one, the last question on the guidance, it’s very hard to tell. I agree with you that the comps should become more favorable with time. And we initiated the business mix rebalancing really about a year ago. And of course, not everything happened overnight, right. As you can imagine, and it’s more like a phase of the business and there’s so much volatility in the market right now in terms of supply disruptions. And also to some extent, we start to see the first impact of probably the economy crisis and the consumer behavior. And so it’s very hard to predict. What we can say is that I think there’s a lot of growth in the business and you may not always come from the same pockets, but that there’s a lot of momentum on many aspects of the business. So, it’s hard to tell if we’re going to see more of the same or if it’s going to start being more favorable on a consolidated basis. It’s really hard to tell unfortunately. But I think we’re going to have to see where this goes, but we will continue to bring you also the breakdown of the business so that you can see where it’s going, where it’s not and that we are able to explain it. And that is also speaking to your question. Number two, the granularity of the growth of the businesses, of course, when you deaverage the GMV outside phone and electronics, you have a lot of different categories and you have a lot of different dynamics which are taking place by price points, by subcategories. And certainly, there you have some subcategories…

Okay. Perfect. Thanks.

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

Hi. This is Matt on for Brian. Thanks for taking the question. Is there any material divergence in your largest countries where you’re performing better than others? And if so, what differentiates those countries? Thanks.

Yes. The answer is no. So we are seeing some differences here and there, when you put side by side, of course, the unit economics, the category mix and et cetera, et cetera. But overall it’s very consistent, I would say and generally very consistent. And I think that’s something that we are happy about also because the good results that we see are not driven by one country. They’re really driven by all of them. So in the portfolio, you have some countries which are going a bit more than others or being a more profitable than others, et cetera. But I think it’s pretty consistent.

The next question comes from Catherine O’Neill from Citi. Please go ahead. Catherine O’Neill: Hi. I just had a question on the logistics as a service plan. I just want to understand how, as you think about the capacity you have for that without impacting the core business. How actively you’re marketing service? And how should we think about the sort of size of the opportunity?

Yes. I think the size of the opportunity is, I think enormous, right? And I say that because we know when we started that business eight years ago, we were dreaming of finding a Jumia logistics, right. And we built Jumia logistics of course, because in a way we had to, we had no choice, right. And if they have been a very extremely efficient fulfillment ecosystem where we could have told our sellers just to drop your package and they’ll take care of everything, then we would have leveraged that, right. So we had to create this, and it’s been a very, very big investment from us in terms of resources, in terms of technology, in terms of time. And I think now we have it. And now this asset, I think it’s a very, very sizable opportunity because we have – we think we have a very unique system. We have a very unique system which provides end to end visibility, reliant or reliability and cost attractiveness to every single SME we need to move goods from A2B. So I don’t know exactly the size, but I think it’s extremely sizable. And with that in mind, we are really in the phase where we have successfully piloted the service in multiple countries. When I say piloted, it means that we’ve had a few hundred consumers who are consistently and regularly shipped packages with us. And we think that we are now ready to scale and that we are going to gradually go out and start pitching the service to consumers, to sellers, to SME. And just scale it at the rhythm at which they come to us. So certainly, we will never compromise the Jumia business in case there is a trade off to be made and we will limit the capacity if we have to. And we will see how it’s coming in the next few months and as we start to market the service, right? So it’s something which for us is a very good addition to the business. And we’re not going to market it very aggressively. We’re going to go out and we’re going to – as we always do, we prefer to have 200 consumers who are regular consumers consistent. And then we continue to scale as we see that business is creating value for them. And certainly we don’t see any issue of capacity for – in the near-future. I mean, we would have to believe that there’s a huge surge in demand to do that. And as I said, we don’t believe in surge, we believe in gradual changes. Catherine O’Neill: Okay. Thanks. Can I also just ask in terms of kind of warehouse capacity? I think you’ve got about 110,000 square meters. How do you expect that to evolve over the next sort of two to three years? And what kind of investment is required in warehouse capacity as you think for the next couple of years.

Yes. It’s generally going to increase pretty gradually, right. And the warehouse space is – does not require much CapEx because our warehouse base is dedicated to the storage and pick and pack and to consolidation of packages. And they basically come in and out of packages, right. So in a way it’s pretty simple to scale if we need. So I expect that we’re going to increase gradually here and there, but no meaningful change in CapEx or investment to do it because it’s really storage space and shelves. So it’s nothing that requires big investment and we always rent those spaces. So there’s no big change here that we expect in the next two years, I would say. Catherine O’Neill: Okay. Thank you.

The next question comes from Lamont Williams from Stifel. Please go ahead.

Hi. As you bring down your advertising costs, what are you seeing in the customer acquisition cost? Is that coming down as you leverage more of the brand? And then is there anything you can give us in terms of how you’re thinking about the timeline to JumiaPay monetization?

Yes. Very good question. So we see pretty much the same trends on the customer acquisition costs and then on all the marketing efficiency metrics or this one is following the same direction. And so we’re also happy with that and confident with that. On the JumiaPay monetization, we are almost there to start probably piloting JumiaPay as a payment service provider. So this is something that should take place in the near future. And we expect that we can pilot it in the next few quarters, right. So definitely we want to pilot it next year. And then I don’t think it’s going to become meaningful in our revenues in the next two or three quarters, but we certainly want to at least pilot it in the next few quarters.

Okay, great. Thank you.

There are no more questions in the queue. This concludes our question-and-answer session. I’d like to turn the conference back over to Sacha for any closing remarks.

Great. Thank you so much, everyone. I think we’re over the hour, so really appreciate you joining. Thanks for the support. And as always, we are available if you have any questions. And we wish you the very best. Take care, everyone. Bye-bye.

The question, excuse me, the conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.