Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's Results Conference Call for the First Quarter of 2025 [Operator Instructions] I would now like to turn the call over to Ignatius Njoku, Head of Investor Relations for Jumia. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today for our first quarter 2025 earnings call. With us today are Francis Dufay, CEO of Jumia; and Antoine Maillet-Mezeray, Executive Vice President, Finance and Operations. 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 7, 2025, 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 it over to Francis.

Good morning, everyone, and thank you for joining Jumia's first quarter 2025 earnings call. We enter 2025 with a clear mandate, reduce losses, drive efficiency, and deliver measurable financial improvements. And we have started executing decisively. 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. Accelerating usage trends during the quarter, combined with the return to positive end-user GMV growth in March, are a strong signal of renewed momentum. However, overall GMV and revenue remain pressured by one, currency headwinds, which continue to affect profitability, and two, by a sharp decrease of corporate sales in Egypt, which generated significant volumes in Q4'23 and Q1'24. That's why we're laser-focused on margin expansion and financial discipline. We are executing against our plan to slash cash burn and structurally improve margins. Usage growth is important, but in Q1 our focus was clear, take costs out of the system. We have launched targeted, company-wide initiatives across logistics, fulfillment, technology, and G&A expense. That impact will scale through the rest of the year. As a result, we are raising our full year 2025 guidance and now expect a loss before income tax of $50 million to $55 million, an improvement from our prior range of $65 million to $70 million. For 2026, we forecast a loss before income tax of $25 million to $30 million, and we believe to be on track to reach profitability on a loss before income tax basis in the fourth quarter, with full year profitability targeted for 2027. Reflecting Q1 results and solid early Q2 momentum, we are also increasing our physical goods orders growth guidance to 20% to 25%, up from 15% to 20%. Before…

Thank you, Francis, and thank you everyone for joining us today. As Francis outlined, we have taken decisive actions to structurally lower our cost base while preserving our ability to grow. From renegotiating logistics and technology contracts to streamlining warehouse operations and tightly managing discounts, every initiative is designed to drive lasting margin expansion and improve cash efficiency. With that context in mind, let me now walk you through our financial results for the first quarter. Let's start with a review of our top line performance. First quarter revenue was $36.3 million, down 26% year-over-year and down 18% on a constant currency basis for the quarter. The year-over-year decline in revenue was driven by lower corporate sales in Egypt and the continued impact of currency devaluation. Please note, Jumia benefited from higher corporate sales in Egypt during the fourth quarter of 2023, which contributed to the year-over-year comparison. As of March, we fully lapped the currency headwind experienced in early 2024 in Egypt and Nigeria. This provides a clearer year-over-year comparison and sets the stage for revenue growth moving forward. Marketplace revenue for the first quarter was $18.1 million, down 30% year-over-year and down 26% on a constant currency basis. Revenue from first party sales was $17.8 million, down 21% and down 9% on a constant currency basis. Turning now to gross profit. First quarter gross profit was $19.9 million, down 36% year-over-year and down 32% on a constant currency basis. Gross profit margin was impacted by continuing macroeconomic headwinds, particularly currency devaluation and reduction in corporate sales. Gross profit margin as a percentage of GMV for the first quarter was 12%, compared to 17% in Q1 2024. Turning to expenses. Our structural cost initiatives launched this year are not yet fully reflected in the first quarter, but are set…

Thanks Antoine. Based on current business trends, we are updating our 2025 financial guidance as follows. We are raising our physical goods orders growth range to 20% to 25% from prior 15% to 20%. GMV is projected to be between $795 million and $830 million in 2025, a year-over-year increase of 10% to 15% respectively, excluding foreign exchange impacts. We are updating our loss before income tax to be in the range of negative $50 million to negative $55 million, a year-over-year decrease of 49% and 44% respectively. For the second quarter, while we are not issuing formal guidance, we expect continued momentum building on the strong exit trend for March. We are anticipating physical goods orders growth in the range of 20% to 25%, along with double-digit top line growth and further reduction in losses. Looking into 2026, we anticipate further significant cost efficiencies, projecting our loss before income tax to be in the negative $25 million to $30 million range, marking continued improvements. This trajectory is aligned with our long-term plan. We believe to be on track to achieve breakeven on the loss before income tax basis in the fourth quarter of 2026 and deliver full year profitability in 2027. Thank you all for your attention. We are now ready to take questions.

[Operator Instructions] The first question today is coming from Brad Erickson from RBC Capital Markets.

Thank you. Good morning, guys. 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 were up 11% versus GMV down 2% constant currency, recognize GMV would have grown, I think you said 10% in the prepared remarks, but can you kind of just remind us the relationship between the corporate sales and the disconnect there between orders and GMV? And then secondarily, maybe just on corporate sales in general, 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'll follow up.

Hi, Brad. Thanks for your question. So let me take the first question about the disconnect that corporate sales create between orders and GMV. It's quite straightforward. Corporate sales are typically high value orders to generate a lot of GMV with a very small number of orders. So as corporate sales decrease significantly, we typically lose a lot of GMV, but very few 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. Then if you remove the impact of corporate sales, as we explained, you see that GMV is up 10%, which is consistent with our increase in orders of 21%, with a slight reduction of the average value, mostly due to mixed effects and a very successful -- very good progress in the lower value categories. So that explains the disconnect, and that's also why we want to control the numbers without corporate sales for GMV. And then the volatility of B2B to your second question. So definitely corporate sales are a more volatile type of activity, especially in a market like Egypt where the macroeconomics play a very important part. I mean, we had a devaluation last year, for example, and still a lot happening. 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 on fundamental trends. And we're not forecasting massive, I mean, we're not forecasting massive volumes of corporate sales going forward.

Got it. That's super helpful. And then I guess when you think about maintaining this order volume and obviously taking the guidance up there, how should we think about the kind of use of cash from an inventory level perspective necessary to fulfill 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.

Yes, absolutely. So as you've seen this quarter, a significant part of our cash burn is due to increased working capital that was mostly used to build up inventories ahead of significant commercial events, especially the junior anniversary campaign that we're starting today. I mean, 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 much lower impact of working capital in the coming quarters.

Got it. And then that was interesting. You mentioned you're seeing some of the, or you expect to see some of these tailwinds from the supply front from Asia associated with the U.S. tariffs and all that. Is it fair to say you're already seeing an uptick in this? And does that have anything to do with the raised physical order guidance?

We're already seeing an uptick from international vendors, mostly Chinese, right? I mean, we've had very, very strong trends in item sales over 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. Going forward, what we're saying is that while 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 easier. I mean, and Jumia will be a real partner of choice to distribute to the large 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 this business is, part of the business is already faring extremely well thanks to fundamental work that's been done over the past two years. And we anticipate that the macro events will be in our favor when it comes to getting more supply from China.

Got it. And then the setup here through the year, given kind of the shape of the order volumes and some of the supply tailwinds and everything, it would suggest you're kind of set up and long and you're, I think pointing to at least stable growth if not maybe a slight acceleration, but it feels like you're set up to maybe lean into marketing at some point. And I recognize you're being really prudent with expenses and you mentioned some of the headcount stuff and I appreciate the line item detail. But 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?

So, that's a very good question. So, as you know, we spent the last two years fixing the basics, significantly 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. 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've disclosed for Ivory Coast, Nigeria, Kenya, for example. You really see the impact 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 see it in the numbers at country level even in those big markets. So, now we're at the stage where in many markets our fundamentals are strong enough, our value proposition has massively improved and we're able to reopen the box on marketing. So, while in many instances we choose to save and we choose to be very conservative due to some specific context, value proposition or external events in the country, we may also choose to be a bit more aggressive in some instances. I can give you an example. In Nigeria, we recently started a TV and radio campaign which we had not done for many years, which is an additional investment. So, we're being more tactical and we're being more open to pushing marketing in the markets where we know that the fundamentals are in place, the value proposition is much stronger and we're already seeing traction.

Got it. Okay. And then, shifting to the logistics expansion, I guess I'd 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 any kind of a drag on margins here maybe near or medium term.

Sure. So, why now? That's a very good question because in the past two 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. Still, we believe that we, I mean, 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. We've been piloting this in the Ivory Coast for many years already. And we recently developed the right IT tools to scale it very efficiently across more markets. And we've come to a point where our logistics network has been turned around in many markets that is stable enough, strong enough and we are now able to open this box and start monetizing outside of the marketplace. This is something we could not have done two years ago. We had too much to fix internally. But now we're ready for that. So timing is important. The tools that we've developed to do it very seamlessly are very important. So that's why we're expanding now in Nigeria and we're in the process of getting the licenses to do so in many more markets. So with that, there's of course a lag between the moment we launch and the moment we see meaningful revenues. There's time to build up the business, to create some awareness, 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 or a few quarters to scale significantly. 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 zero CapEx and very, very limited additional expenses. So no negative impact on the focus of the organization and no negative impact on short-term profitability.

Got it. That's great. And then you mentioned significantly reducing cash burns in 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 you could just bridge that gap or remind us on what that gap comes from. Thanks.

Yes, 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. We had over, but plus 13.7 last quarter, plus eight this quarter, we've reached a point where we don't need to increase working capital in any significant way going forward. So that's one. Second, a lot of the cost management measures that we have taken over the past three, four months will have impact throughout the year. Not everything is impacting Q1 as you can imagine. We have lots of, for example, tech 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 through 2025. And lastly, we also have some level of seasonality. 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 do, 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 improvements purely due to seasonality as well.

Got it. And then -- go ahead.

Sorry, Antoine.

All right. Maybe to give a bit color on that issue, if you think of technology, for instance, and more precisely about hosting, in 2024, we had a yearly commitment of $13.7 million. And our current 12-month commitment is around $10 million. So we're going to see in the coming quarters some significant savings in this line. And the same will apply, as Francis said, on software licenses that were either renegotiated or terminated in Q1. And this will play out in the coming quarter.

Great. And then final question for me. You gave the 2026 guidance. Talk about the visibility there and maybe any updates to kind of your profitability algorithm in terms of volume levels relative to reaching breakeven. 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 what gets you there.

Yes, so as we've said, our ballpark volumes that we would need to reach profitability is more or less times two. And we're working hard to lower this bar by working on the cost base so we can get there faster. We believe it can be achieved by Q4 of ‘26, partly thanks to the growth that we'll get by then, and also due to the seasonality of Q4, which is usually a very strong quarter for consumption in our markets. So, yes, Q4 ‘26, we will reach that bar. And then we believe we are in good position to reach profitability over the full year of 2027 on a loss before income tax basis. And that will be a mix of cost management and volumes increase with growth levels in ‘25, ‘26, ‘27. That gets us more or less to that times two impact.

The next question will be from Tracy Kivunyu from SPG Securities.

Thank you. Congratulations, gentlemen, on the good results and in spite of the environment and the upgraded guidance. So just a couple of follow-up questions from the topics already discussed. To start with Asia, with the entry with the anticipated higher supply, have you seen any sort of guidelines in terms of competition increasing from Asian players as well, seeing that demand or rather supply might be shifting more towards Africa? So have you seen any increase in competition? And in line with that question as well, what's the scope of your international orders as a percentage of GMV currently and how does that compare to the last quarter?

Hi, Tracy. Thanks for your questions. So on the first part of your question, looking at 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 middleman between supply and demand for Africa. There's also definitely the risk that it creates more competition from, for example, non-resident platforms or new entrants looking to push into Africa. We believe, I mean, as we touched upon this topic during the presentation today, we believe we are in a strong position to fight that kind of competition, specifically if we speak of competition from Chinese non-resident platforms like Temu. We believe we're in a very strong position because, one, we have a very strong and respected brand. We have built the right assortment to fight them on all categories, including some categories that we cannot sell, such as appliances, smartphones, and so on. We believe that we have built the delivery network, the logistics platform that is enabling us to deliver nationwide cash on delivery with great economics, which they do not have at this stage. And another thing that we're starting to see across markets in Africa is that the regulation is tightening when it comes to non-resident platforms and international dropshipping. So we've seen that. We've seen some African countries regulating more tightly against non-resident vendors and platforms, such as Ivory Coast recently. And we've seen some countries regulating more tightly around the de minimis thresholds, such as Uganda recently. So they're addressing the topic in different ways, but we believe that regulation will become more and more challenging for non-resident platforms over the coming months and quarters for sure. Does that answer your first question?

It does. Thanks, Francis.

Sorry, can you remind me of the second one?

It was, how much international orders are as a percentage of GMV this quarter?

Yes, sorry. So we have not disclosed international orders items as a percentage of GMV. What you can fairly assume though is that the average item value from international vendors is lower than from the local marketplace because they're typically focused on categories like fashion, accessories, home accessories, electronic accessories, and so on. So the kind of the Temu product range. And these are lower value on average than the local categories, such as TV, appliances, and smartphones. So it's about one third of the items we sell, but it's understandably a lower percentage of the GMV.

Understood. Thank you. I have some follow-up questions as well on the Jumia delivery business. 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 online. I just wanted to understand the monetization behind it. I know you've already said that it's leveraging already a lot of the existing infrastructure. So it's mostly stood for stability, but how does the monetization look compared to marketplace revenue, for example? Would you say it's more of a high volume, thin margin, or would you say that the sort of tick rates, so to speak, would be similar? And maybe in line with that as well, just to understand, how long did the pilot process take in Ivory Coast before you saw it to become a viable business? So maybe what I'm trying to understand is, what would be your sort of scale for you to say, okay, this business is viable in this country? Thanks.

Yes. So let me explain how it works. That's very straightforward. So in practice, any individual or small social commerce vendor can go to a Jumia pickup station, drop five packages to ship to other cities in the countryside, and Jumia will deliver. As simple as that. And they pay when they drop, so 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 margins on our viable costs in logistics. 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 the viable costs for shipping are very well known for us. It's typically the fee that we pay to a 3PL plus a bit of line haul cost. And we've priced accordingly with fairly high margin to make sure that it's profitable from the first package. So that's why we know that it's something that's viable in any country. The pilot in Ivory Coast lasted many years, actually, but we kept it going for many years. One, because we didn't really have the right IT tool at the time to scale across more countries, and we didn't want to create a mess. And the logistics network in the other countries were not ready yet to open this new box. So it was not about proving the viability of the project. We already knew that it was profitable. It was mostly about being sure that we could scale seamlessly across more countries in a well-integrated, well-managed way. Yes, so you can expect something that's profitable from day one. There's no drag on the margins. That will not be anywhere close to the scale of the marketplace, of course, in the coming months, but that will definitely help on the margin ratios.

Maybe just an additional follow-up on that. How significant is the delivery business to revenue for Ivory Coast at the moment?

I cannot comment because we have not disclosed. So it's definitely lower than the marketplace revenues, of course. It's something we still believe we can scale further in the Ivory Coast, but it's a very profitable business by design.

Thanks. My last two questions are regarding the customer growth and profitability in your subsidiaries. I really appreciate the additional color on contributions from your top countries. I just wanted to understand the dynamics of customer growth, which was the regions, especially in the top four, that you started to see strong acceleration in Nigeria, for example, than Ivory Coast, which has been much stronger for longer. And maybe a reminder of where we are sitting in terms of profitability for the businesses. Are there any of those top four businesses that have broken even? And in terms of your profitability, which of those countries do you think are releasing the drag on performance to drive the upgraded guidance you've given for FY26 and FY27 as well?

Sure. So let me take active customer growth to start with. So you see this quarter, we're 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 pace in active customers growth. When you look at country level, so since we've disclosed orders growth 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 in the numbers is that the number of orders per active customers is increasing, but the trends are very similar between orders growth and active customers growth, which gives you a proxy for the four markets that we have disclosed. Of course, a market like Ivory Coast, is much more penetrated than a market like Nigeria. So going forward, we have a much greater runway for active consumer growth in a country like Nigeria, and in some ways in a country like Kenya. Now when it comes to breakeven at country level, so we have not disclosed financials at country level, and 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 we're talking of Ivory Coast, Kenya, and Nigeria. So one thing that we're seeing across the board is that scale really drives profitability and really drives strong economics and strong bottom line in our markets. So that's why we're really insisting on continuing on those accelerating growth trends.

Thanks, Francis. My very last question would be back on customer growth. I mean, it is indeed quite a strong performance. What would you say is the overarching contributor to that? Is it an improving operating environment? Is it higher diversity? What would be the strongest contributor to that customer growth performance?

So at this stage, customer 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. These have been the same for a few quarters already, but that's really what's driving customer growth. Going forward, as we discussed before, we have not really tapped yet potential accelerations in marketing that could help us go faster in the countries where we have the right fundamentals in place.

Thank you. This does conclude today's Q&A session. And also this does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.