Jumia Reports First Quarter 2019 Results

GMV grew by 58%, leading to a 102% increase in
Marketplace revenue

Jumia continued to deliver cost efficiency improvements

JumiaPay entered into a strategic partnership with Mastercard who
also made a €50 million investment in Jumia

LAGOS, Nigeria–(BUSINESS WIRE)–Jumia Technologies AG (NYSE:JMIA) (“Jumia” or the Company) announced
today its financial results for the quarter ended March 31, 2019.

“Jumia delivered excellent results during the first quarter of 2019:
strong GMV growth of 58% leading to 102% growth in marketplace revenue,
year-on-year improvement of 356 basis points of Operating loss as a
percentage of GMV and further development of JumiaPay, highlighted by
the investment by and partnership with Mastercard,” said Sacha
Poignonnec and Jeremy Hodara, co-CEOs of Jumia. “We believe that Jumia
is increasingly relevant for consumers and sellers in Africa. Looking
ahead, we remain focused on our core operations, driving consumer
adoption and engagement on our marketplace, increasing the penetration
of JumiaPay, while continuing to improve our financial profile and
making a sustainable impact on the continent.”

Business highlights

• The €50 million investment by Mastercard into Jumia, in a concurrent
  private placement with our Initial Public Offering, marked another
  milestone in the development of JumiaPay and a validation of its
  potential. We are partnering with Mastercard on a number of
  initiatives, including the development and marketing of co-branded
  products (i.e., cards, virtual cards and quick response codes).
• In the first quarter of 2019, our marketplace continued to gain depth
  and diversity as we focused on attracting quality sellers to our
  platform and providing our consumers with an expanding range of
  products and services. An example of this strategy is the partnership
  we announced this quarter with the technology leader Xiaomi. As part
  of this partnership, we are opening the Mi official store on our
  platform with the ability to offer a number of Xiaomi products on an
  exclusive basis. This demonstrates the attractiveness of Jumia as a
  destination of choice for high profile international brands, giving
  them access to millions of potential consumers in Africa with one
  partnership.

Financial highlights

• Gross Merchandise Volume (“GMV”) grew this quarter by 58% on a yearly
  basis, on the back of strong marketplace growth, leading to a 102%
  increase this quarter in Marketplace revenue on a yearly basis. Our
  strong GMV growth combined with the attractive value proposition we
  offer both sellers and consumers are a key engine of monetization,
  which we derive from diversified revenue streams such as Commissions,
  Fulfillment, Value Added Services, Marketing and Advertising services.
• Gross Profit margin as a percentage of GMV increased from 5.6% in the
  first quarter of 2018 to 6.5% this quarter, as a result of the
  increased GMV monetization rate. Our Gross Profit also exceeded
  Fulfillment expense this quarter.
• We continue to have a strong focus on cost efficiency. Leveraging our
  strong brand awareness and highly localized marketing approach, we
  have been able to gain 205bps of marketing efficiency this quarter,
  bringing the Sales & Advertising expense from 7.2% of GMV in the first
  quarter of 2018 to 5.1% in the first quarter of 2019.
• Adjusted EBITDA loss as a percentage of GMV improved from negative
  19.8% in the first quarter of 2018 to negative 16.4% in the first
  quarter of 2019.

Selected Operational KPIs

^{1 GMV corresponds to the total value of orders including shipping
fees, value added tax, and before deductions of any discounts or
vouchers, irrespective of cancellations or returns.
2
Active Consumers means unique consumers who placed an order on our
marketplace within the 12-month period preceding the relevant date,
irrespective of cancellations or returns}

• GMV increased by 57.6% from €152 million in the first quarter of 2018
  to €240 million in the first quarter of 2019, on the back of strong
  growth of both Active Consumers and spend per Active Consumer.
• The number of Active Consumers at March 31st, 2019 was 4.3 million, up
  from 3.0 million a year ago. We believe that a major driver of our
  Active Consumers growth is the continued expansion of our product
  offering and the growing relevance of our platform, which drives
  consumer adoption and engagement.

Selected Financial Information

1. Revenue

The following table shows a breakdown of revenue, for the first quarters
of 2018 and 2019.

• First Party/ Marketplace mix. Our primary
  sources of revenue are commissions and fees generated from third-party
  sales (“Marketplace revenue” or “Revenue related to third-party
  sales”) and revenue from sales of goods we undertake ourselves (“First
  Party revenue” or ““Revenue related to first-party sales”). Shifts in
  the mix between first party and marketplace activities trigger
  substantial variations in our Revenue as we record the full sales
  price net of returns as First Party revenue and only commissions and
  fees in the case of Marketplace revenue. Accordingly, we steer our
  operations not on the basis of our total revenue, but rather on the
  basis of Gross profit, as changes between third-party and first-party
  sales mix are largely eliminated at the Gross profit level. Over time,
  it is our goal to reduce the proportion of first party activity in
  favor of third-party activity at group level. This strategy may
  however vary from quarter to quarter and from country to country.
• Marketplace revenue increased by 102.3%
  in the first quarter of 2019 compared to the first quarter of 2018, on
  the back of strong revenue growth across all components of Marketplace
  revenue, demonstrating our ability to monetize the platform as we
  continue to grow overall GMV.
  • Commissions, which are charged to our sellers, grew by 95.5%
  • Fulfillment, which are delivery fees charged to consumers, grew by
    116.1%
  • Value Added Services, which include revenue from services charged
    to our sellers such as logistics services, packaging, or content
    creation, grew by 85.8%
  • Marketing and advertising, which include performance marketing
    campaigns, or the placement of banners on our platform, grew by
    200.7%
• First Party revenue decreased by 21.2% as
  we conducted fewer sales of goods on a first party basis. We undertake
  our first party activity in an opportunistic manner to complement the
  breadth of product assortment on our platform, usually in areas where
  we see unmet consumer demand.

2. Gross Profit

Gross profit increased by 82.3% from €8.6 million in the first quarter
of 2018 to €15.7 million in the first quarter of 2019, primarily due to
an increase in Marketplace revenue.

Gross profit margin as a percentage of GMVincreased from 5.6% in the
first quarter of 2018 to 6.5% in the first quarter of 2019 as a result
of increased platform monetization.

3. Fulfillment Expense

Fulfillment expense includes expenses related to services of third-party
logistics providers, expenses related to our network of warehouses and
pick-up stations, including employee benefit expenses. Fulfillment
expense is influenced by a number of factors including:

• The origin of the goods, for example the cost of shipping a product
  from a cross-border seller based overseas is higher than shipping from
  a local seller
• The destination of the package and type of delivery, for example main
  city vs. secondary city vs. rural area, and home delivery vs. pick-up
  station
• The type of goods, for example the cost of delivery is higher for a
  large home appliance than a fashion accessory

Despite an increase this quarter in the freight and shipping expense
portion of Fulfillment expense, as a result of higher proportion of
cross-border sales, our Gross Profit exceeded Fulfillment expense this
quarter.

4. Sales & Advertising Expense

Our Sales and Advertising expense increased by 12.5% to €12.3 million in
the first quarter of 2019 from €10.9 million in the first quarter of
2018, while we were able to increase our GMV by 57.6% over the same
period. As a result, Sales and Advertising expense as a percentage of
GMV, decreased from 7.2% in the first quarter of 2018 to 5.1% in the
first quarter of 2019, demonstrating the relevance of our marketing
strategy as well as the continuous user adoption of our platform.

5. General and Administrative Expense, Technology
and Content Expense

General and Administrative expense contains wages and benefits,
including share-based payment expense of management, as well as seller
management, commercial development, accounting and legal staff,
consulting expense, audit expense, office rent and related utilities,
insurance and other overhead expense.

General and Administrative expense excluding SBC increased by 71.0% from
€13.7 million in the first quarter of 2018 to €23.5 million in the first
quarter of 2019. As a percentage of GMV, General & Administrative
expense excluding SBC, increased from 9.0% in the first quarter of 2018
to 9.8% in the first quarter of 2019, as the improvements due to
operating leverage were more than offset by non-recurring expenses
concomitant with the IPO.

Technology and Content expense increased by 15.3% from €5.1 million in
the first quarter of 2018 to €5.9 million in the first quarter of 2019.
As a percentage of GMV, Technology and content expense, decreased from
3.3% in the first quarter of 2018 to 2.4% in the first quarter of 2019,
as a result of operating leverage.

6. Operating Loss and Adjusted EBITDA

Adjusted EBITDA loss, as a percentage of GMV improved from negative
19.8% in the first quarter of 2018 to negative 16.4% in the first
quarter of 2019 as a result of a higher gross profit margin as a
percentage of GMV, marketing efficiencies and operating leverage
improving Technology & Content expense as a percentage of GMV.

On January 1, 2019, we adopted IFRS 16 accounting guidance amending the
accounting for leases. This led to a reduction of G&A by approximately
€1.1 million in the first quarter of 2019 and an increase in
Depreciation and amortization by approximately €1.3 million, resulting
in a positive impact on Adjusted EBITDA of €1.1 million in the first
quarter of 2019 and a negative impact on Operating loss of €0.2 million.
Prior period amounts were not retrospectively adjusted.

7. Net IPO Proceeds

As of March 31st, 2019, we had €132.2 million of Cash and cash
equivalent on the balance sheet.

After the balance sheet date, we completed our Initial Public Offering.
The net proceeds from our Initial Public Offering, the investment by
Mastercard, the issuance of anti-dilution shares to certain of our
existing shareholders and the exercise by the underwriters of their
option to purchase additional ADRs added $280.2 million to our cash and
cash equivalents in April 2019.

Conference Call and Webcast information

Jumia will host a conference call today, May 13, 2019 at 8:30 a.m. U.S.
Eastern Time to discuss Jumia’s results. Details of the conference call
are as follows:

Participant Dial in (Toll Free): 1-888-317-6016

Participant International Dial in: 1-412-317-6016

Canada Toll Free: 1-855-669-9657

A live webcast of the earnings conference call can be accessed on the
Jumia Investor Relations website: https://investor.jumia.com/

An archived webcast will be available following the call.

(UNAUDITED)

Consolidated statement of comprehensive income
for the quarters ended March 31, 2019 and 2018

(UNAUDITED)

Consolidated Statement of financial position as
of March 31, 2019 and 2018

(UNAUDITED)

Consolidated statement of cash flows for the
quarters ended March 31, 2019 and 2018

Non-IFRS and Other Financial and Operating
Metrics

This release includes certain financial measures and metrics not based
on IFRS, including Adjusted EBITDA, as well as operating metrics,
including GMV and Active Consumers. We define GMV, Active Consumers and
Adjusted EBITDA as follows:

GMV corresponds to the total value of
orders including shipping fees, value added tax, and before deductions
of any discounts or vouchers, irrespective of cancellations or returns.

Active Consumers means unique consumers who
placed an order on our marketplace within the 12-month period preceding
the relevant date, irrespective of cancellations or returns.

Adjusted EBITDA corresponds to loss for the
year, adjusted for income tax expense, finance income, finance costs,
depreciation and amortization and share-based payment expense.

Adjusted EBITDA is a supplemental non-IFRS measure of our operating
performance that is not required by, or presented in accordance with,
IFRS. Adjusted EBITDA is not a measurement of our financial performance
under IFRS and should not be considered as an alternative to loss for
the year, loss before income tax or any other performance measure
derived in accordance with IFRS. We caution investors that amounts
presented in accordance with our definition of Adjusted EBITDA may not
be comparable to similar measures disclosed by other companies, because
not all companies and analysts calculate Adjusted EBITDA in the same
manner. We present Adjusted EBITDA because we consider it to be an
important supplemental measure of our operating performance. Management
believes that investors’ understanding of our performance is enhanced by
including non-IFRS financial measures as a reasonable basis for
comparing our ongoing results of operations. By providing this non-IFRS
financial measure, together with a reconciliation to the nearest IFRS
financial measure, we believe we are enhancing investors’ understanding
of our business and our results of operations, as well as assisting
investors in evaluating how well we are executing our strategic
initiatives.

Management uses Adjusted EBITDA:

• as a measurement of operating performance because it assists us in
  comparing our operating performance on a consistent basis, as it
  removes the impact of items not directly resulting from our core
  operations;
• for planning purposes, including the preparation of our internal
  annual operating budget and financial projections;
• to evaluate the performance and effectiveness of our strategic
  initiatives; and
• to evaluate our capacity to expand our business.

Items excluded from this non-IFRS measure are significant components in
understanding and assessing financial performance. Adjusted EBITDA has
limitations as an analytical tool and should not be considered in
isolation, or as an alternative to, or a substitute for analysis of our
results reported in accordance with IFRS, including loss for the year.
Some of the limitations are:

• Adjusted EBITDA does not reflect our share-based payments, income tax
  expense or the amounts necessary to pay our taxes;
• although depreciation and amortization are eliminated in the
  calculation of Adjusted EBITDA, the assets being depreciated and
  amortized will often have to be replaced in the future and such
  measures do not reflect any costs for such replacements; and
• other companies may calculate Adjusted EBITDA differently than we do,
  limiting its usefulness as a comparative measure.

Due to these limitations, Adjusted EBITDA should not be considered as a
measure of discretionary cash available to us to invest in the growth of
our business. We compensate for these and other limitations by providing
a reconciliation of Adjusted EBITDA to the most directly comparable IFRS
financial measure, loss for the year.

The following tables provide a reconciliation of loss for the year to
Adjusted EBITDA for the periods indicated:

Contacts

Safae Damir
Head of Investor Relations
[email protected]

Abdesslam
Benzitouni
Head of PR and Communications
[email protected]