Jumia Technologies AG (NYSE:JMIA) Q1 2024 Earnings Call Transcript May 7, 2024

Jumia Technologies AG isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's Results Conference Call for the First Quarter of 2024. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. With us today are Francis Dufay, CEO of Jumia; and Antoine Maillet-Mezeray, Executive Vice President, Finance and Operations. We will start by covering the Safe Harbor. We would like to remind you that our discussions today will indicate 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 28, 2024, 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 the call over to Francis.

Francis Dufay: Hello, everyone, and thank you for joining us this morning. I want to begin today's call with a review of our performance and an update on progress against our strategic growth objectives. I will then turn the call over to Antoine for a more in-depth review of our financials and we'll conclude with a Q&A session. Jumia is off to a strong start of the year. After a transformational 2023, we have continued to work diligently to reduce costs and improve cash efficiency, while establishing a leaner and more agile organization primed for growth. In the first quarter, we saw tangible results that our strategy is working. In line with expectations, GMV improved to $181.5 million, up 5% year-over-year or 39% on a constant currency basis.

This was driven by continued efforts to enhance our product assortment, complemented by more efficient marketing spend and a reduction in consumer discounts. AOV also expanded by 3% year-over-year to $39.6 in the quarter, while other growth climbed 1.9%. Combined, these results helped drive top line revenue of $48.9 million, up 19% year-over-year or 57% on a constant currency basis. At the same time, we are delivering greater efficiencies across our cost base. Here, we are targeting more efficient marketing channels, streamlining our logistics network, while reducing G&A and tech expenses. These efforts reduced our quarterly cash burn from $22 million to $19.1 million in Q1 illustrating that we can still grow at scale without spending heavily.

Our loss before income tax increased to $39.6 million from $29.2 million a year ago due in large part to outside finance costs driven by significant FX impact in the quarter mostly without the cash impact. Adjusted EBITDA loss, which excludes this cost, declined to $4.3 million in the first quarter or 94% on a constant currency basis. Our results are more notable when considered against the challenging macro backdrop in some of our markets. In the first quarter, we saw further currency devaluations in Egypt and Nigeria, two of our largest markets. The Nigerian Naira devaluated to NGN1396 from NGN461 to US$1 or roughly 200% year-over-year devaluation. In Egypt, the Egyptian Pounds devaluated from EGP47 to EGP31 to US$1 or an approximately 50% year-over-year devaluation.

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