Good morning, everyone. Thank you for waiting. Welcome to Jumia's Results Conference Call for the Second Quarter of 2020. Currently, all participants are in listen-only mode. After management's prepared comments, there will be a session for questions and answers. Please be aware that this conference is being recorded. I will now hand the call over to Safae Damir, Head of Investor Relations for Jumia. Please proceed.

Thank you. Good morning, everyone. Thank you for joining us today for our second quarter 2020 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 recent 20-F filing. 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. We are pleased to share with you today results that demonstrate meaningful progress on our path to profitability. Before diving into the detail, we would like to acknowledge the hard work and dedication of all our employees, logistics partners, sellers, restaurants, and JForce agents who have been collaborating to support consumers during this unique and turbulent time. Our mission of providing consumers with access to goods and services, helping sellers and SMEs reach consumers and grow, while making a positive impact on the African continent has never been more relevant. We explained during our Q1 results all the actions that we've been taking to adapt our operating model, including social distancing, contactless delivery, work from home, and many others, as well as actions taken to support the community, such as introducing price control mechanisms on essential goods and supporting our delivery associates through the Jumia Heroes Program. We will continue with these initiatives as long as the situation remains, and we're happy to take questions on this at the end of the call. Now, let’s discuss the results. Starting with the bottom line since it's been a big part of our focus lately. I think in Q2, we made great progress on our path to profitability. We had set a strong objective to reduce our loss in absolute terms. In Q1, we achieved a 10% reduction year-over-year of the adjusted EBITDA. In Q2, the adjusted EBITDA was a loss of EUR 33 million; this is the best level in absolute terms of the past six quarters. You may have also noticed in our press release that we have successfully entered into an agreement concerning the settlement of all ongoing class actions, which is also good news. Without the one-off expense related to this, the adjusted EBITDA loss would have been EUR 29 million, meaning a 34% reduction year-over-year. What we are happy about is that this improvement is driven by strong fundamentals: the growth of Jumia orders and consumers, improved unit economics, and strong discipline on costs for both marketing and G&A. One good way to see this is through the evolution of our unit economics, which you can find on Page 4. Our strategy to increase focus on what we call everyday categories, gradually monetize the marketplace while driving cost savings is yielding very good results. We are generating almost EUR 1 per order in gross profit after fulfillment. In fact, we are almost breakeven after sales and advertising. With the business mix rebalancing that we initiated last year, we are shifting more business towards categories like beauty, fashion, or fast-moving consumer goods, which have higher commission rates and are less promotionally intensive than categories like phones and electronics. Our fulfillment efficiency keeps improving, and so do our monetization efforts. We are pleased with the evolution of the unit economics and the adjusted EBITDA trajectory. What gives us confidence for the future is that these improvements are not caused by a sudden surge in volume during the quarter; instead, they are driven by the underlying drivers of the P&L, which is very important to note. Regarding the measures taken by the governments as part of the COVID response, it is worth mentioning that in most countries of our footprint, there were no broad nationwide lockdowns like those seen in most western countries. Instead, only four countries imposed nationwide lockdowns, representing about 24% of our addressable market, while others consisted of localized lockdowns or partial movement restrictions. This is crucial for understanding consumer behavior toward e-commerce. What we've seen so far is that localized lockdowns led to less drastic changes in consumer lifestyles and behavior. In terms of supply disruptions, certain parts of our business, especially Nigeria and South Africa food delivery, were significantly impacted. However, we have gradually returned to a relatively normal course of business over the course of the quarter. So, as you read the Q2 results, keep in mind that our path to profitability, particularly our record gross profit, is driven by strong fundamentals rather than surging volumes, and this is occurring despite significant disruptions in some countries. Where we continue to see a positive impact is with the sellers and major brands as they increasingly recognize the importance of e-commerce. More than 100 brands joined us for our Jumia anniversary, proving that we are the platform of choice for online consumers in Africa. Now, let me turn the call over to Jeremy, who will provide more details on the Q2 performance.

Thank you, Sacha. Hello, everyone. We’re now on Page 7. Our focus during the second quarter of 2020 was very much on financial discipline and making progress on our path to profitability. The usage on the platform was resilient with annual active consumers reaching 6.8 million, and orders up 8% year-over-year. At the same time, we significantly reduced our sales and advertising expense by more than 50%. The JumiaPay TPV more than doubled, growing by 106% year-over-year, while JumiaPay transactions increased by 36%. We also made meaningful progress on the monetization front with our gross profits increasing by 38% year-over-year and the gross profit after fulfillment expenses reaching a record EUR 6 million. We reduced our adjusted EBITDA loss by 26% year-over-year. Excluding the net settlement expense, we would have reduced our adjusted EBITDA loss by 34%. Our operating loss was reduced by 44% over the same period, reflecting our meaningful progress on our path to profitability. In terms of GMV, we encountered the effects of the business mix rebalancing initiated at the end of 2019, which affected the GMV trajectory. Our strategy to focus on everyday product categories has proven to be effective: we’ve seen triple-digit growth in beauty and personal care categories. We are delighted to see that Jumia has become a household name with strong relevance in the everyday life of consumers in Africa. Thank you, and now I will hand over to Antoine for the financial performance update starting on Page 15.

Thank you, Jeremy. Hello, everyone. We are pleased with the progress on monetization in Q2, 2020, which is an essential component of our financial strategy and path to profitability. With an 8% year-over-year growth in orders, both marketplace revenue and gross profit posted a 38% growth over the same period. As we grow the usage of Jumia, we aim to gradually monetize that usage through diversified revenue streams. Looking at our marketplace revenue streams, commissions increased by 68% year-over-year despite a decrease in GMV due to an increased proportion of higher commission rate categories such as beauty and FMCG. Marketing and advertising showed robust momentum and experienced 50% growth as advertisers shifted their spending from offline to online. Fulfillment, which includes delivery fees charged to consumers, increased by 34% year-over-year, outpacing the growth in orders. This was due to the continuous improvement in our shipping metrics, allowing for more efficient pass-through of our fulfillment expenses. The gross profit after fulfillment reached a record level of EUR 6 million, compared to a loss of EUR 0.7 million in Q2, 2019, indicating our progress on the way to profitability. I will now pass the call back to Sacha as we conclude the prepared remarks.

Thank you very much. To conclude the call, I would like to make three remarks. First, looking at Q2 results, as well as H1 2020, we made several important choices last year, and these choices are beginning to pay off. The focus on everyday categories is making us very relevant and efficient in marketing, as well as more profitable. We launched Jumia Mall last year, which is proving to be highly relevant for sellers and brands in existing countries and categories, especially in the travel sector. Despite not seeing any surge overall in demand due to COVID, we achieved good results across the board, giving us confidence for H2 and beyond. Secondly, I want to clarify our priorities for the upcoming quarters. Our main goal for Jumia is to continue growing while driving efficiency improvements. We're well positioned in terms of categories and will continue to focus on those everyday categories to drive the adoption of Jumia by new users and retain existing ones. We also aim to gradually increase penetration of JumiaPay, which accounted for 36% of orders in H1, almost 10 points more than last year. While cash on delivery is still a key part of our value proposition, we will work to gradually increase on-platform penetration. Lastly, our third focus area is the gradual increase in monetization while maintaining cost efficiency. We must remain attractive while trying to monetize without compromising strong attractiveness. As we face an economic downturn globally, it’s crucial to offer the best prices and value to consumers and sellers. Finally, I want to reiterate that we are still at the very beginning of e-commerce in Africa. With less than 1% penetration, there's a significant opportunity ahead. We've built a scalable platform that is very efficient and relevant, and we are well positioned for what lies ahead. Thank you for attending the call; we're now ready to open it up for Q&A.

The first question comes from Mark Mahaney of RBC Capital Markets. Please go ahead.

Okay, thanks. If I could throw in three questions, please. Is it a reasonable expectation that gross profit after fulfillment can continue to rise? Do you have enough structural improvements, and as the mix shifts, do you have enough visibility into the revenue mix shift to believe that gross profit after fulfillment can continue to rise? Secondly, you listed a number of large brands on slide 6. Are there brands that are missing? Are there specific key brands that you think could significantly move the needle for Jumia? Finally, could you talk about any changes in your customer acquisition channel strategy? Has there been any part of your advertising efficiency driven by the discovery of more efficient advertising channels?

Thanks, Mark, very good questions as always. Regarding the gross profit after fulfillment, the answer is yes. The gross profit after fulfillment is a sum of our revenues minus fulfillment expenses. If you look at our monetization streams and their level of maturity, there’s a lot of potential ahead of us, both for existing monetization streams and new ones. For instance, there’s much opportunity in marketing and advertising, which we’ve only just begun to explore. Changes to our monetization model with the introduction of Jumia Express are also in early stages. There are additional revenue streams we could incur from JumiaPay and Jumia Logistics, which are not in our P&L yet. Therefore, we see much room for growth. Regarding fulfillment expenses, we're witnessing consistent improvements quarter over quarter, driven by volume growth and operational improvements. The cost model change we implemented allows us to be more efficient in our logistics. As we gain scale, we see the fulfillment expenses decreasing for each order, so we feel confident about it. Regarding brands, there are many brands looking at Africa, and our goal is to provide them an efficient route to market without them needing to establish a physical presence or conduct large-scale marketing. There isn't a single brand that comes to mind as a game changer, but the addition of more brands will improve our offering. Regarding customer acquisition channels, the improved marketing efficiency comes from broad discipline and enhancements across various channels rather than a single channel seeing a surge in efficiency. The Jumia team's hard work, enhanced data analytics, and technology have helped optimize our online channels and leverage offline channels like JForce and telesales. This general improvement gives us confidence moving forward.

Great. Thanks a lot. I have a couple of questions; first, could you provide more details on GMV growth by category? Specifically how are electronics trending against other categories? Also, regarding commission rates, it looks like a change in mix has driven higher commission dollars. Was there also an absolute change in commission rates, and how much room exists to increase commission rates longer-term?

Yes, very good questions. For specifics, refer to Page 10 where we provided the breakdown by category for Q2 in 2019 and 2020. You can see the percentage of fashion, beauty, and FMCG has grown to 57% from 41%. These categories have experienced the fastest growth in both volume and value. Regarding commission, this is a critical subject we discuss often internally. We believe it’s crucial to maintain attractiveness for sellers. In the past, when we've increased commissions, sellers have occasionally adjusted their prices accordingly. Our goal is to ensure strong competitiveness for sellers, allowing them to offer low prices. Part of our strategy involves developing alternative revenue streams that aren't tied solely to commissions, reducing our reliance on commission-based income. As we successfully monetize JumiaPay and Jumia Logistics, we may even consider reducing commissions to maintain marketplace competitiveness. Thus, while it’s possible to increase commissions occasionally for specific categories, we avoid doing so broadly.

Hi, guys. Good morning. Thanks for taking the questions. Two questions, if I could please. Could you please share how the business has trended post-quarter, in relation to pandemic dynamics? Any insights on fulfillment expense initiatives, customer additions, or other related progress would be beneficial. Additionally, how do you see the business emerging from the pandemic to strengthen going forward?

Thanks, Ralph. The situation has been stable from a business perspective in relation to the pandemic over the past two months. We initially experienced some strong disruptions in certain markets back in April, but since then, we have gradually returned to normal levels of business across all segments. We have witnessed a consistent level of business similar to what we had prior to the onset of the crisis. However, there remain questions concerning future lockdowns and back-to-school efforts moving forward. There’s uncertainty regarding consumer behavior, but I am confident in our current P&L improvements as they derive from fundamental enhancements to our key drivers. We began implementing crucial operational and experience improvements ahead of the crisis, which put us in a strong position. Overall, we have maintained agility and nimbleness through all these changes. Any further questions?

No, this concludes both our question-and-answer session and Jumia’s second quarter 2020 conference call. Thank you for attending today’s presentation. You may now disconnect.