Jumia Technologies AG Q4 FY2021 Earnings Call

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 Investor Relations 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. 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, and continue developing JumiaPay. 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. 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. 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. Best usage ever, GMV reached an all-time high, active consumers reached an all-time high, orders reached all-time high. This is very good. We're now back to growth. The acceleration strategy is paying off, monetization, highest revenue ever, highest gross profit before consumer incentives ever. EBITDA loss stood at negative $70 million in Q4, mainly driven by strong investments in sales and advertising and consumer incentives. We invested $27 million more into sales and advertising and consumer incentives in last year; we’re comfortable with this level of investment because of the strengths of our unit economies and because we're seeing the dynamics on usage growth acceleration. So overall, a good quarter in our view, building the acceleration of usage we all wanted to see and some great progress on monetization. Now we still want to see more, of course, and I will give more precise guidance for 2022 at the end of the call. If we review our usage metrics on Page 5, quarterly active consumers reached a record of 3.8 million in Q4, up 29% year-on-year driven by all-time high new consumer ads during the quarter. This is a new KPI that we will now provide every quarter so that we give even more granularity on usage performance. And we will still provide the annual active consumers on a yearly basis. You can see in the presentation later that we reached this year 8 million active consumers, also a record. Orders accelerated by 40%, also reaching an all-time high of 11.3 million. This acceleration in both consumers and orders is driving what we believe to be in selection in GMV, which was up 20% year-over-year reaching again an all-time high of $300 million. We’re very encouraged by this acceleration and view it as strong evidence that our strategy is paying off. We intend to build on this momentum to further scale our platform and continue to accelerate. In parallel, let's turn to Page 6. Underlying monetization is also reaching new highs. If we look at our monetization metrics before consumer incentives, we see a clear trend of acceleration with new records achieved in Q4. Revenue before consumer incentives reached $74 million up 39%, the fastest revenue growth in the past two years. Gross profits before consumer incentives reached $45 million, up 24%. While the margin as a percentage of GMV reached 13.6%. Finally, gross profit after fulfillment expense and still of course, before consumer incentives also reached a new high at $14 million, up 9% year-over-year, while margin as a percent of GMV here remained above 4% and at 4.3%. We're very pleased to drive strong usage growth and strong monetization. This is giving us the flexibility to further invest in the growth of our platform. On Page 7, you can see that we continued leaning into growth investments in Q4. There are two key areas of investments for us. First is consumer adoption; we are increasing our investments in sales and advertising and consumer incentives, and we're doing so in a targeted and disciplined manner. Over 57% of the increase in sales and advertising comes from increased offline marketing costs, which are largely geared towards brand awareness and consideration. The second area of investment is platform development. Technology, and G&A, tech is the backbone of everything we do at Jumia. We are accelerating the development of products and features, creating a more engaging and seamless user experience, as well as more effective operations with a fully dedicated tech stack for payment and FinTech. We are comfortable with the increased level of adjusted EBITDA loss during this quarter and the pace of investments for several reasons. These investments are coming from a place of strength. Our levels of monetization have never been higher, and we have the financial firepower to make those investments. Secondly, it's the right time for us to be making this investment. There is strong momentum in the business in terms of usage, and we are building on this momentum to drive even more growth. Finally, these investments are of course creating even more strength in the platform, offering a compelling experience and value proposition for all participants as well as bigger scale, which ultimately contributes to our path to profitability. Now let's go into more details in the performance and Jeremy will take it from there.

Thank you, Sacha. Hello everyone. Thanks for joining today. I start with the review of the usage trends during the quarter. On Page 9, we have a clear acceleration in usage growth in Q4. We posted during the quarter, the fastest sequential growth rate in almost three years across consumers, orders, and GMV. We reached all-time highs 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-on-year. Our consumers are 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, which represents a 40% increase driven by both increased consumer ads and increased purchase frequency of existing consumers, 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, 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 phones and electronics. In Q4 2021, only 35% of our GMV is from phones and electronics, with 65% coming from categories relevant to consumers as part of their everyday lives such as fashion, home, lifestyle, food delivery, FMCG, etc. Average order value now stands at $29 as we further penetrate more affordable and smaller ticket size categories. The growth trends by product category convey a similar message about the importance of everyday categories. The fastest-growing categories in both GMV and items sold are categories relevant to consumers as part of their everyday lives. In particular, food-related categories, which are food delivery and FMCG, are growing in excess of 50% year-over-year in both GMV and items sold terms. Phones and electronics are showing some early signs of improvement, growing in excess of 10% in terms of items sold. The global supply chain situation for these categories remains volatile with continued pressure on the chipset supply side. I’d like to give you more color on the FMCG category, which more than doubled in volume terms, demonstrating its strong relevance for consumers in our markets. On Page 12, you've heard us talking in the past about our commercial efforts to build out the assortment on the FMCG side, with a view to cover the full product spectrum of a typical grocery basket in each one of our markets. We also placed particular emphasis on developing our relationships with blue-chip FMCG brands, such as P&G, Unilever, Coca-Cola, Nestlé, Mondelez, and many more. In the full year 2021, we added over 815 new brands on our platform. We're also adapting our operating model to work efficiently with these brands to secure relevant stock at the best price. This led us to do more business on a first-party basis with almost 40% of GMV in the FMCG category generated on this basis. The FMCG category is starting to account for a meaningful share of the business. 14% of items sold versus 9% a year ago, which we see as great news because this is a category where the annual purchase frequency is 25% higher versus the other categories on the platform. The development of FMCG is a case study of our ability to identify relevant categories for our consumers and build them out in an agile manner. We are overall very pleased with the accelerating usage growth on the platform and have clear priorities for 2022 to further build on that momentum. On Page 13, we have outlined selected initiatives to drive the usage growth in 2022. The first one is the continued development of what we call Jumia Everyday, which are the everyday product categories, including FMCG that I have just touched upon. On the supply front, we intend to further expand our assortment, leveraging both our third-party sellers and our first-party sourcing capabilities. On the delivery front, we intend to leverage our e-commerce logistics infrastructure for the delivery of planned purchases as early as the next day while catering to immediate needs with under one-hour delivery via our on-demand platform, Jumia Food. The second lever of usage growth is the rollout of targeted free shipping. At this stage, free shipping is in certain cities for baskets above a minimum size comprised of Jumia Express items. These items are the ones we hold in our warehouse and that are picked and packed by Jumia. The third lever is tech-driven user experience enhancement. We plan to further increase the level of personalization across the platform, improve our sort algorithm and filtering module while increasing our gamification for a more engaging experience. We expect these three levers to drive usage growth acceleration, support conversion rate, consumer acquisition, and loyalty. With respect to the free shipping specifically, we expect the sales uplift generated by sellers via free shipping to help us drive more revenue from Jumia Express, which is barely monetized today. We're confident accelerated usage growth and increased scale will help us further improve marketing efficiency and ultimately contribute to our path to profitability. Let's now move on to JumiaPay. We're also seeing good momentum here and are constantly enhancing our platform and expanding the range of financial and digital services available to consumers. We're highlighted on Page 15, some selected developments related to JumiaPay in Q4 2021. To support the growth of JumiaPay on and off platform, we conducted an upgrade of our risk infrastructure, in addition to our proprietary in-house risk engine, which scans each transaction in real-time against over 300 factors. We rolled out a third-party device fingerprinting technology. This tool aggregates over 1,000 data points providing an even more precise basis for fraud detection and prevention. We further expanded the range of consumer finance products available to consumers as part of the Black Friday campaign. We established a partnership with valU in Egypt, a leading Buy Now Pay Later FinTech platform, allowing consumers to pay in interest-free installments over nine months. We're currently working on expanding the range of tenures for the installment. In addition, we partnered with seven different banks as part of the Black Friday campaign in Egypt to offer installments to consumers. On the JumiaPay app, we continued adding more relevant everyday services. In Nigeria, we set up an integration with Quickteller, the largest bill aggregator in Nigeria. This partnership allows us to offer over 70 additional billers on the JumiaPay app, including government services, internet service providers, airlines, and many more. Moving onto the TPV on Page 16. JumiaPay TPV increased by 29% from $70 million in Q4 2020 to $90 million in Q4 2021, supported by the growth in GMV and JumiaPay app digital services in particular. On-platform penetration of JumiaPay as a percentage of the GMV reached a new high of 27.4% in Q4 this year, up from 25.5% in Q4 2020. Turning to transactions on Page 17, JumiaPay transactions reached 3.9 million in Q4 2021, up 46% year-over-year, the fastest transactions growth rate of the past seven quarters. JumiaPay transactions growth was supported by accelerating volume growth across the business and in particular, the food delivery category, which more than doubled year-over-year. Overall, 34.7% of orders placed on the Jumia platform in Q4 were completed using JumiaPay compared to 33% in Q4 last year. We made good progress on JumiaPay throughout 2021. We intend to build on this momentum to further expand the range of payment and FinTech solutions for both merchants and consumers in 2022. On Page 18, we have outlined selected initiatives that we are driving to push the development of JumiaPay in 2022. The first one is the development of our payment processing activities off-platform. We intend to start offering in 2022, our payment processing solutions off-platform to third-party merchants starting in Egypt, initiating off-platform TPV and payment processing revenue. 2021 marked an important milestone for JumiaPay as we obtained in Egypt under the sponsorship of the National Bank of Egypt, the relevant licenses to process payments on behalf of third-party off-platform. In 2022, we intend to secure relevant licenses in selected other markets for off-platform payment processing. The second initiative is to further develop our consumer finance solutions offering more Buy Now Pay Later options for consumers in order to drive usage growth on our platform. I’ll now hand over to Antoine, who will walk you through our financial performance in more detail.

Thank you, Jeremy. Hello, everyone. As mentioned by Sacha in the intro, monetization performance in Q4 2021 was very strong as we reached record levels in terms of revenue, gross profit, and gross profit margin before incentives. This allows 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. We present revenue in our financials under three main buckets. The first one is first-party revenue, which includes the proceeds generated from our retail activity. The second one is marketplace revenue, which includes the various fields that we receive from our third-party activity. The third bucket includes revenues which, at this stage, mainly includes revenue from our logistics as a service activity launched 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 is overall revenue growth, which was up 26% year-on-year, the fastest growth rate of the past two years. I'd like to point out the particularly strong performance of first-party revenue, which was up over 79% before consumer incentives, also the fastest growth rate of the past two years. This is the result of us undertaking more business on a first-party basis, particularly for the build-out of the grocery 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 consumer incentives, including sales discounts, shipping discounts, and free shipping. Let’s now deep-dive into the value components of marketplace revenue. Marketing and advertising revenue increased by 20%, supported by the robust uptake of ad solutions, particularly during the Black Friday campaign. Value-added services revenue increased by 63% year-over-year, mostly as a result of an increase in international logistics revenue. Commissions and fulfillment revenue are both impacted by consumer incentives. Excluding this impact, commissions’ revenue was up 25%, driven by usage growth, while fulfillment revenue was down 2% as we chose to reduce the shipping back to customers. The diversity of our revenue sources gives us the flexibility to adjust the monetization intensity on certain revenue streams as we execute our usage growth acceleration strategy. While we are driving much faster usage growth, we are also reaching record high levels of monetization. On Page 22, you can see that gross profit before the impact of consumer incentives reached an all-time high at $44.8 million, accelerating by 24% year-on-year, while the margin as a percentage of GMV reached 13.6%. We made the decision to reinvest some of these monetization gains into our price competitiveness and more attractive shipping tariffs, increasing consumer incentives to $11 million in Q4 2021 from $3 million in Q4 2020. The levels were very modest and were down 45% compared to Q4 2019. Despite more than tripling consumer incentive levels, gross profit, which is net of consumer incentives, was still up by 2% year-on-year and up 22% compared to Q4 2019. Similarly, gross profit as a percentage of GMV decreased from 12% in Q4 2020 to 10% in Q4 2021, which is still more than 1.5 percentage points above the margin level of Q4 2019. We are overall very pleased with the strong performance of monetization in Q4 2021. We continue building new monetization streams, such as advertising and logistics as a service to further increase the earning power. Let’s now move on to cost. While we are in a phase of expansion and increasing investments, we are maintaining strong cost discipline. As you can see, we continue generating logistics efficiencies on a volume-unit basis. Fulfillment expense increased by 32% year-on-year while orders accelerated by 40% over the same period. Fulfillment expense on a per order basis is showing a steady decline over the past two years, reaching $2.7 per order in Q4 2021. Moving on to sales and advertising costs. This has been a key area of investment for us in the second half of 2021 after six quarters of significantly reduced marketing spend. In Q4 2021, we continued ramping up marketing investment across channels, albeit at a slower pace compared to Q3 2021. Sales and advertising expense increased by 159% year-on-year in Q4 2021 compared to 228% year-on-year in Q3. On a compounded basis, sales and advertising expense was at 35% compared to Q4 2019. Over 57% of the year-on-year increase in sales and advertising expense is coming from the increase in traditional marketing such as offline, TV, and video advertising that aim at driving brand awareness and consideration. Our spend is disciplined and targeted to optimize our overall marketing spend and location by channel. In addition to our existing marketing optimization tools, we are deploying an enhanced return on marketing investment model. This is a customized tool trained on multiple years of Jumia data to model the differentiated impact of various marketing activities and channels on customer acquisition and loyalty, informing the marketing budget allocation. Informed by this model as well as in-depth customer research, we've rebalanced our marketing investment mix. We increased the share of offline media and video advertising to drive awareness and activation, reshaping the funnel of consumers. In Q4 2021, 50% of our sales and advertising expense was allocated to online marketing campaigns, 41% to offline media and video advertising, and 9% to staff costs. In Q4 2020, offline and video advertising accounted for only 17% of the sales and advertising spend. We are confident this targeted and disciplined approach will allow us to further improve marketing efficiency as we move beyond the initial phase of a ramp-up. Turning to technology and G&A expense. Technology is another area of increased investments, with technology and content expenses reaching $13.1 million, up 51% year-on-year and 53% compared to Q4 2019. Tech is the backbone of our platform, and we are increasing our investments in this area to enhance user experience and engagement on our platform, as well as overall operational efficiency. In Q4 2021, we initiated an event to restructure our own page structure and content for better navigation and product discovery. To support these efforts, we have been expanding our technology headcount. In H2 2021, we opened a new tech hub in Cairo, which housed over 120 technology professionals at the end of 2021, taking the total count of technology staff across the group to over 400. G&A expense excluding share-based compensation reached $32 million in Q4 2021, up 22% year-on-year. This was mostly due to a temporary increase in professional fees and an uptick in staff costs to strengthen the management team in selected areas to support the growth of the business. G&A excluding SBC remained 15% lower in Q4 2021 compared to levels in Q4 2019, as we maintain cost discipline in this area. Before moving on to balance and cash flow items, I’d like to wrap up on monetization and cost with an overview of our priorities in this front for 2022. We have selected initiatives we intend to pursue to increase monetization and cost efficiency. On the monetization front, we want to diversify our revenue streams and drive more revenue from our platform assets. We want to grow advertising by expanding the range and efficiency of our advertising solutions while increasing the pick up of these services by our sellers and third-party advertisers. The development of new revenue streams will also help us reduce reliance on commissions and shipping fees from consumers, ultimately supporting usage growth. On the cost front, we intend to drive more operating leverage and efficiency as we scale the platform. We expect increased volumes to support fulfillment cost efficiency. Turning to the balance and cash flow items, CapEx in Q4 2021 was $4.4 million compared to less than $1 million in Q4 2020, mostly due to purchases of technology and logistics equipment. Net change in working capital resulted in an inflow of $4.1 million in Q4. This was mainly a result of an increase in payables relating to the uptick in first-party activity as well as a shorter receivable cycle. Cash utilization for the quarter, refinanced cash used in operating and investing activities, excluding investments in financial assets was $66.6 million in Q4 2021 supported by the working capital inflow during the quarter. At the end of December 2021, we had a liquidity position of $513 million, with $170.1 million of cash and cash equivalent and $395.7 million of term deposits and other financial assets. With that, I’ll hand over to Sacha for concluding remarks.

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, and new highs in monetization. The combination of accelerating usage growth and increased monetization are essential stepping stones towards profitability. We have brought forward today the 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 Nigeria’s case study. So we are on Page 29. On this slide, we are illustrating how the scale is taking us towards profitability. You can see that we have been accelerating, this is the blue line on the chart. We've 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 represented here as the gross profit after fulfillment and before consumer incentives. For those looking at the presentation here, we’ve been growing steadily over the last two years and by a factor of 2.4 in Q4. You can see on this chart as well our local G&A, which represents our cost structure to run the business locally. For the last five quarters, the monetization has been paying for the local G&A base. This is a new milestone that we wanted to bring forward as another positive development on the path to profitability and the benefit that scale brings to the business. Nigeria, as you are well aware, is our largest market, representing about 20 to 25% of the business depending on the metrics you take. It’s great to see that our largest market has reached this milestone. On Page 30, we have recapped the key initiatives for 2022, and we would like to share some guidance for 2022. We intend 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. In terms of investments, we are going to deliver that growth acceleration with similar levels of investments as in 2021. We expect to invest between $50 million and $55 million in sales and advertising expense in the first half of 2022 compared to $55 million during H2 of 2021. So overall, a very similar level of investments with no further increase in absolute terms during the first half of 2022 for sales and advertising. For EBITDA, we expect the overall adjusted EBITDA loss for the full year to be in a range of $200 million to $220 million, comparing with $197 million in 2021. Finally, we expect to invest between $15 million and $25 million of CapEx this year, which is an increase versus 2021 during which we invested $7 million. This investment focuses on our logistics platform and will allow us to increase our reach, improve delivery speed, and deliver cost efficiencies going forward. Once again, we have three priorities for 2022: usage growth, JumiaPay development, increased monetization, and cost efficiency. We have very clear initiatives already ongoing to support each. We’re excited about the prospects of the business in 2022 and beyond and believe we have all the building blocks to take Jumia to profitability. Thank you for your attention. We’re now ready to take your questions.

Thank you. 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 of 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 I’m always kind of concerned with incentives that you were tracking some non-repeat buyers as well? If you can maybe talk through that. Then 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 incentives. It’s something that we have also observed in the past. The type of incentives that are being used can drive better cohorts or worse cohorts in some cases. For us, increasing customer lifetime value and optimizing customer acquisition cost at the same time is very critical. It’s a key objective, and we use of course, the sales advertising and consumer incentives to drive just that. We’re confident that the type of consumer incentives we deploy incrementally drives customer lifetime value and overall long-term increase of it. To measure that, we look at several KPIs; the number of orders per consumer has been trending in the right direction. The number of quarterly active consumers, along with that, shows the number of orders per consumer is increasing. We believe initiatives around what we call the Jumia Everyday, FMCG, the drive of free shipping, and greater personalization, convenience, are all targeted to increase frequency and loyalty of consumers, and we expect to see increased KPIs with this. Regarding FMCG, you're very right. We have joint business plans with many of those big brands and work hand in hand with them to grow their online business through Jumia. Advertising campaigns are part of that collaboration, driving promising prospects for advertising revenue. This evolution towards this mix of categories is also expected to support 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 that entails? Secondly, you mentioned in the release the study from Boston Consulting Group; it appears that some customers are looking for more free shipping. Is there anything else that that study revealed about what your consumers are asking from the platform?

Thanks, Lamont. On the first question, we have discussions with local regulators about JumiaPay. We are making adjustments to the operating model and the type of integrations, processes, and flows. It's important to maintain the dialogue with relevant regulators, ensuring compliance with existing or anticipated regulations as fintech and payments are evolving. We expect any disruption to be transitory. Regarding the study, it provides a comprehensive market overview about consumer expectations and perceptions of our value proposition. Free shipping is one conclusion we’ve drawn. We’ve reviewed the ROI of implementing free shipping, especially on Jumia Express. We don’t do free shipping on everything but rather on Jumia Express, as it drives more usage in general and addresses expectations around delivery speed and quality. There are adaptations to the customer experience which can have higher ROI than others, such as accelerating the speed of delivery in certain categories.

Okay, great. Thank you.

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

Great. Thanks. I had a question just on your sales and advertising spend that has ramped up significantly over the last few quarters. Is this more of a push into Nigeria, or is it into Egypt? Any color there would be useful, and just anything you can provide on your long-term plans here. Should we expect more sustained level of sales and advertising heading into the back part of this year and also kind of 2023 as well?

Yes, of course. Very good question. The spend is well spread across the portfolio of countries, and there isn't a specific geographic push that is extraordinary. We accelerated spending across all countries in H2 of 2021. There may be some nuances, but in general, it's a balanced increase. We want to invest about $50 million, similar to H2. We're not looking to increase spend in absolute terms during H1, but rather maintain the same level. We'll then evaluate performance after that. We aim to see further accelerations in usage metrics with this level of spend in absolute terms for H1.

That's very clear. Just one quick follow-up on Slide 29; do you have any plans to disclose more financials on a geographic basis so we can see the spread of your operations?

We are committed to bringing any relevant path to profitability milestone. We’ve illustrated changes in Nigeria, our largest market, which is 20% to 25% of our business depending on the metrics. We’ve always volunteered the sizes of countries relative to operations. If there were to be significant changes, we would bring them forward, but currently, we have no plans for detailed geographical KPIs.

That’s it. Thanks very much.

Thank you. Our next question today is coming from Sarah Simon at Berenberg. Your line is live. You may begin.

Yes. Good afternoon. I apologize if there’s background noise; I'm in transit but just had a question about the growth acceleration 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? A bit more clarity on how you’re thinking about that acceleration would be helpful. Thanks.

Yes. Well, Sarah, thank you for the question. At this stage, we want to see more acceleration versus where we are now. The benchmark for us is about the H2 growth we have observed. We want to ensure that we are accelerating from that baseline and are focused on GMV, orders, and consumers, particularly targeting improvements in metrics from here.

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.

Thank you very much. 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.