Good morning, ladies and gentlemen, thank you for standing by. Welcome to Jumia’s Results Conference Call for the Fourth Quarter of 2021. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Safae Damir, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our fourth quarter 2021 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 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 annual report on Form 20-F as published on March 12, 2021, as well as our other submissions with the SEC. In addition, on this call, we will refer to certain financial measures not reported in accordance with IFRS. You can find reconciliations of these non-IFRS financial measures to the corresponding IFRS financial measures in our earnings press release, which is available on our Investor Relations website. With that, I'll hand over to Sacha.

Thank you, Safae. Welcome everyone. And thank you very much for joining us today. Before going into the results, I would like to remind you of our current strategy and where we stand right now. We are currently focused on scaling our platform with a fundamental and unchanged strategic objective of reaching profitability. To get there, we have very clear priorities, accelerate usage growth, GMV consumers orders, increase monetization and cost efficiencies, continue developing JumiaPay. And this is the natural next step in the journey we've been on since inception. We have a vast and largely untapped market of almost 600 million consumers across 11 countries. To capture this opportunity, we've spent the first years of our journey building the solid foundation for our platform across e-commerce, logistics and payment. And this platform is uniquely tailored to the specifics of our markets. With this foundation in place, we've focused over the past three years on enhancing the fundamentals of our business. We made tremendous progress building everyday product categories, and our platform has never been more diverse and relevant for consumers as part of this daily lives. We have also strengthened our unit economics and crossed a major milestone of positive gross profit after fulfillment expense. And it has now been the case consistently for the past nine quarters. Lastly, we've raised over $517 million in cash over the past two years, giving us a strong balance sheet to finance our strategy. Leveraging these strong fundamentals, we turned our focus in 2021 to accelerating usage growth, to scale our business and take it to profitability. We are pleased to report very good progress on growth acceleration during Q4. And let's please turn to Page 4 for the highlights of the quarter. Best usage ever, GMV reached all-time high, active consumers…

Thank you, Sacha. Hello everyone. And thanks for joining today. And I start with the review of the usage trends during the quarter on Page 9. On Page 9, we have a very clear acceleration in the usage growth in Q4. We have posted during the quarter, the fastest sequential growth rate in almost three years across consumers, orders and GMV. And we have reached all-time high across each one of these metrics in the quarter. We're adding more consumers than ever before and quarterly active consumers reached a new high of 3.8 million, up 29% year-over-year. Our consumers are also purchasing more often with almost three orders placed on average, by an active consumer in the first quarter. Orders reached a record high of 11.3 million at 40%, as a result of both increased consumer adds and increased purchase frequency of existing consumers, driven by the acceleration in both consumers and order growth were reaching what we believe to be a clear inflection in the GMV trajectory, which increased by 20% year-over-year reaching a record of $330 million during the quarter. There is strong gross momentum in the business, and that's partly a result of the success of our strategy to increase the focus on everyday product categories. On Page 10, you can see a fundamental shift in our GMV mix. In Q4 2019, we had half of our GMV coming from phone and electronics. In Q4 2021, only 35% of our GMV is coming from phone and electronics, with 65% coming from categories, which are relevant to consumers as part of their everyday lives such as fashion, home, lifestyle, food delivery, FMCG et cetera. Average order value now stands at $29 as we further penetrate more affordable and smaller ticket size categories. On Page 11, the growth trends…

Thank you, Jeremy. Hello, everyone. As mentioned by Sacha in the intro monetization performance in Q4 2021 was very strong as we reached recognized in terms of revenue, gross profit and gross profit margin before incentives. And this is allowing us to increase investments in the long-term growth of Jumia. I would like to start with the recap of the building blocks of our revenue on Page 20. We present revenue in our financials under three main buckets. The first one is, first-party revenue, which are the proceeds generated from our retail activity. The second one is marketplace revenue, which are the various fields that we proceed from our third-party activity. The third bucket is, are the revenue which at this stage mainly includes revenue from our logistics as a service activity launch in 2020. This bucket will include in the future revenue from off platform payment processing, once this activity is up and running. Let’s now look at the overall revenue trajectory in Q4 2021. Here, we observed three main things. The first one is the overall revenue growth, which was up 26% year-on-year, the fastest growth rate of the past two years. I would like to point out that the particularly strong performance of the first-party revenue, which was up over 79% before consumer incentives, which is also the fastest growth rate of the past two years. And this is the result of us undertaking more business on 1P basis, particularly for the built out of the gross reset category. The second observation is the development of new monetization streams, such as advertising or logistics as a service, the major part of the other revenue. The third observation is that this revenue growth momentum is giving us the flexibility to invest more into growth in the form of…

Thank you, Antoine. We closed 2021 with strong momentum executing successfully on our growth acceleration strategy. And we posted all time high levels of consumers, orders, GMV new highs in terms of monetization. And the combination of accelerating usage growths and increased monetization are essential stepping stones towards profitability. We have brought forward today administration of [Technical Difficulty]

Ladies and gentlemen, please hold a moment while we reconnect the speaker.

Hello everyone. I’ll take over from Sacha. I think he’s reconnecting.

I’m back if you want Jeremy.

Okay. No, no, Sacha if you’re back. No, no, go on. Yeah, go on Sacha.

Okay. Great. Sorry guys, I got dropped off from the call and we were about to show the Nigeria’s case study. So we are on Page 29. And here on this slide, we are illustrating how the scale is taking us towards profitability. You can see that we have been accelerating [indiscernible] this is the blue line on the chart in case you’re looking at the presentation and we have grown GMV over the last two years. And during Q4, by a factor of 1.7, at the same time, we have been accelerating monetization that is represented here as the gross profit after fulfillment and before consumer incentives. For those, again, looking at the presentation here, we are looking at the orange bar and you can see that we’ve been growing steadily over the last two years and by a factor of 2.4 in Q4. And finally, you can see on this chart as well, our local G&A, which represent our cost structure to run the business locally. Now for the last five quarters, the monetization has been paying for the local G&A base. This is one new milestone that we wanted to bring forward as another positive development on the path to profitability. And on the benefit that scale brings to the business. Nigeria, as you are well aware is our largest market represents about 20%, 25% of the business, depending on the metrics you take. So it’s great to see that our largest market has reached this milestone. On Page 30, we have recap here, the key initiatives for 2022, and we would like to share some guidance for 2022. We intent to further accelerate GMV growth. As a reminder, we grew GMV by 15% in H2 2021 and we intend to continue to build on that momentum.…

Thank you. [Operator Instructions] And our first question today is coming from Aaron Kessler at Raymond James. Your line is live. You may begin.

Great. Thank you and congrats on the acceleration. A couple questions. First, just maybe on some of the new buyer cohorts. Can you just talk about some of the quality of the new buyers in terms of repeat activity engagement as always kind of concerned with incentives that you were tracking some non-repeat buyers as well? So if you can maybe talk through that. And then maybe in terms of the brand advertising opportunity as well, we see obviously in the U.S. some nice opportunities with FMCG advertisers on platforms like Amazon. If you can just talk about what you’re seeing there today and maybe the opportunity going forward on the brand advertising side. Thank you.

Great. Thank you, Aaron. Yes, very good question on cohorts and incentive. It’s something that we have observed also as well in the past the type of incentives that are being used can drive better cohorts or worse cohorts in some cases. And very clearly for us, increasing the customer lifetime value and optimizing the customer acquisition cost at the same time is very critical. It’s a key objective and we use of course, the sales advertising and the consumer incentives to drive just that. And we’re very confident that the type of consumer incentives that are deployed are incrementally driving the customer lifetime value, and that are driving overall long-term increase of the consumer lifetime value, certainly. And in order to measure that, of course, we look at number of KPIs, you can see that the number of orders per consumers have been trending in the right direction. If you look at the quarterly active consumers that we are providing now the KPI, you can see that the number of orders per consumer is increasing. And certainly we think that all the initiatives around what we call the Jumia every day, the FMCG, the drive also of free shipping and more personalization, convenience, FMGC, all that is there to increase the frequency and the loyalty of the consumers and that we will continue to see increased KPIs with this, so very much confident here. In terms of FMCG, you are very right. Certainly we have with many of those big brands that we have displayed on the slide and that Jeremy talked about, we have what you call joint business plan, and we work hands in hands with them in order to grow the business in order to grow the online business that they are generating through Jumia. And as part of that, we have joint business plan and we have joint advertising plans. Certainly this is driving for us very promising prospects for the advertising revenue. And as we have mentioned in the presentation, we also have a significant part of the FMCG that we do on 1P basis, which is on the retail and the brands there, they’re also willing to participate into advertising campaigns and they’re supporting our retail with advertising campaigns. So certainly we think that the evolution of Jumia towards this mix of category is going to also support the advertising revenues going forward.

Great. Thank you, Sacha.

Thank you. Our next question today is coming from Lamont Williams at Stifel. Your line is live. You may begin.

Hi guys. Thanks for taking the question. Sacha, could you just talk a little bit about the change in the operating model for JumiaPay in Nigeria? Could you just give us a little more color on what’s – on what that entails? And then secondly, you mentioned in the release the study from Boston Consulting Group, I think it appears – looks like some of the customers are looking for more free shipping. Is there anything that study else – anything else that that study would have revealed about what your consumers are asking from the platform?

Thanks, Lamont. On the first question, we have discussions with local regulators with JumiaPay, of course, on an ongoing basis. And sometimes we are making adjustments to the operating model and to the type of integrations and processes and flows that are happening. And here this one that is taking place in Nigeria and for us, it’s very important to maintain this dialogue with the relevant regulators, obviously. And ensure compliance with existing or anticipated regulations because regulations in fintech and payments in general are evolving on a regular basis. And so here, it’s an update to the model and we’ll have to see, it’s hard to estimate ahead, what are the impacts of those type of changes. But we expect this arrangement to be any way if there’s any disruption, we expect any disruption to be transitory right? Then – I’m sorry, your second question Lamont is to make sure is on the...

Yes. Any kind of finding from the study with...

The study, of course, sorry. Yes. So I think the study is really in-depth market study about a range of topics around the consumer and the expectations and the perception of the value proposition and how can we maximize the – any change that we’re making to the value proposition, right? So it’s very 360 and help us to do more targeted offering and have a value proposition towards segments, which are more likely to use e-commerce and so and so forth. I think free shipping is one of the conclusions that we have made, right? And we’ve taken a hard look at the ROI of the implementation of free shipping, especially on Jumia Express, right? Of course, we don’t do free shipping on everything, we’re going to do free shipping on Jumia Express, which is going to enable us to drive more usage in general, but it’s going to also enable us to address some of the concerns that or the expectations around speed of delivery. Because for example, Jumia Express is delivered faster than the marketplace. And also the consistency of the quality of the products, which are filled on Jumia Express, because of course we have more control on those. And so I think there’s a number of I would say adaptations of the customer experience, which can have higher return on investment than others, improving the return experience for example, accelerating the speed of delivery in certain categories. And so I think there’s a lot of – there’s lot of let’s say, “small findings” which are going to help us drive the value proposition forward, right? And those are some of the examples.

Okay, great. Thank you.

Thank you. [Operator Instructions] Our next question today is coming from Luke Holbrook at Morgan Stanley. Your line is live. You may begin.

Great. Thanks. Thanks for letting me on the call. I had a question just on your sales and advertising spend, that's ramped up quite significantly over the last few quarters, it looks up to do so in the next couple of quarters as well. Can you give us any more detail on where that's being spent on a geographic basis? Is this more seen as a push into Nigeria, as you kind of alluded to on Slide 29 or is this into Egypt more? So any color there would be useful and just anything you can provide on your long-term plans here, is this something that we should expect more sustained level of sales and advertising heading into the back part of this year and also kind of 2023 as well. Any color there would be useful? Thanks.

Yes, of course. Very good questions, spend is really I would say, well spread across the portfolio of countries and there's not like one very specific geographic will push in one country or the other. And we have accelerated the level of spend pretty much across all countries in H2 of 2021, right. So there would be some nuances to that, but in general, this is an increase that is really well spread and certainly not focused on Nigeria or focused more on Egypt and quite well balanced, right. And respecting, I would say the size of our existing operations relative to the size, right. So no particular country focused there that is out of ordinary. And then I think for each one, we really want to invest about $50 million and this is really the same level that we have invested in H2. So here, we don't intend to further increase the levels of investments that we have done in Q3, Q4, but rather maintain them. And so we want to see further accelerations of usage metrics with a similar level of spend in absolute terms, at least for H1, right. And that's the guidance we have for the first half. And then we'll take it from there and see the acceleration and continue to observe the customer lifetime value and the level of acceleration that we see. But at least for H1, we have similar level in absolute terms as H2. And after that, we'll have to see.

That's very clear. And just one quick follow up, just on Slide 29 gave us some illustrative details on Nigeria. Do you have any plans to disclose more financials on a geographic basis that we kind of see more for spread of your operations?

Well, we certainly are committed to bringing any relevant path to profitability milestone, right. So we have done that in the past several times when [Technical Difficulty] certain milestones in the country, it's a very good illustration and to show deep dive of how the business is playing out especially in Nigeria in the largest country. So certainly we plan to continue to bring those milestones. And then we have also always volunteered the sort of relative size of the countries, Nigeria being 20% to 25%, Egypt being around 20% and then having the other countries, all of them being the plus or minus between 5% and 10%, right. So if that were to change, I think we would also bring it forward. I think the weight of the countries, although we have never published it per se, has not really changed. And we have always volunteered those ratios to give you a sense of the presence. And also the geographical diversity of Jumia is one of the amazing assets I think of the company, because we are not overexposed to a given market. And we are not overexposed to a macro situation in one geography, right. And it's that nice balance. I think that is very attractive for us to have the presence in all those countries and to have some strong foothold in countries like Nigeria and Egypt, but also strong presence elsewhere. So again like this, we volunteer and for now we have no plans to disclose on a regular basis, specific geographical KPIs that we always would volunteer this and highlight if there were any big changes.

That’s it. Thanks very much.

Thank you. [Operator Instructions] And our next question today is coming from Sarah Simon at Berenberg. Your line is live. You may begin.

Yes. Good afternoon. I apologies if there’s background noise, I'm in transit but just had a question about the growth acceleration that you talk about. You referenced growth acceleration relative to the second half of fiscal 2021, which I think was about 15%. So is that the benchmark against which you are expecting to accelerate, or should we really be thinking Q3 was less growth than Q4, Q1 should be more growth than Q4 and so on. So just a bit more color on how you are thinking about that acceleration would be helpful. Thanks.

Yes. Well, look, Sarah, thank you for the question. At this stage, really, I think we want to see more acceleration versus where we are now, right. So the benchmark for us, because there can be some quarterly variations and so on and so forth. We want to make sure that we are accelerating versus where we come from at least on an H2 basis, right. So of course then there's GMV orders, consumers we are expecting to accelerate and the benchmark for us right now in H2. Then of course, as we see it coming, we'll publish more data, but for now, this is the benchmark that we use.

Okay. That's helpful. Thanks.

Thank you. We have no further questions in the queue at this time. I will now turn it back to management for any closing remarks.

Well, thank you very much and looking forward to a great 2022. Thank you everyone. Take care. Bye.

Thank you. Ladies and gentlemen, this does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.