6-K - JMIA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

November 10, 2020

Commission File Number: 001-38863

Jumia Technologies AG

(Translation of registrant’s name into English)

Skalitzer Straße 104

10997 **** Berlin , Germany

+49 (30) 398 20 34 54

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

On November 10, 2020, Jumia Technologies AG will hold a conference call regarding its unaudited financial results for the quarter and ended September 30, 2020. A copy of the related press release is furnished as Exhibit 99.1 hereto.

In addition, Jumia Technologies AG files its unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020 and the related management’s discussion and analysis of financial condition and results of operation as Exhibits 99.2 and 99.3 hereto.

INCORPORATION BY REFERENCE

Exhibit 99.1 to this Report on Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Exhibits 99.2 and 99.3 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statement on Form F-3 (Registration Number 333-240016) of Jumia Technologies AG and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

Exhibit No.	Description of Exhibit

99.1	Press release of Jumia Technologies AG dated November 10, 2020.
99.2	Unaudited interim condensed consolidated financial statements of Jumia Technologies AG as of and for the three and nine months ended September 30, 2020.
99.3	Management’s discussion and analysis of financial condition and results of operation.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Jumia Technologies AG
By	/s/ Sacha Poignonnec
Name:	Sacha Poignonnec
Title:	Co-Chief Executive Officer and Member of the Management Board

Date: November 10, 2020

Exhibit 99.1

Jumia reports Third Quarter 2020 results

Significant progress on path to profitability

Gross profit increased by 22% year-over-year

Operating loss decreased by 49% year-over-year

JumiaPay Total Payment Volume increased by 50% year-over-year

Lagos, November 10, 2020 – Jumia Technologies AG (NYSE: JMIA) (“Jumia” or the “Company”) announced today its financial results for the quarter ended September 30, 2020.

Results highlights

●	GMV was €187.3 million, down 28% year-over-year, as the effects of the business mix rebalancing initiated late last year continued playing out during the third quarter of 2020.
●	Gross profit reached €23.2 million, a year-over-year increase of 22%.
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●	Gross profit after Fulfillment expense reached €6.6 million, compared to a loss of €1.7 million in the third quarter of 2019.
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●	Sales & Advertising expense was €6.2 million, the lowest quarterly amount since 2017 and a year-over-year decrease of 55%. We continued to increase marketing efficiency as Sales & Advertising expense per Order decreased by 53% from c. €2.0 in the third quarter of 2019 to €0.9 in the third quarter of 2020.
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●	For the first time at group level, Gross profit after Fulfillment and Sales & Advertising expenses turned positive, with the majority of countries breaking even at this level during the third quarter of 2020.
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●	Operating loss reached a three-year low of €28.0 million, decreasing by 49% year-over-year.
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●	JumiaPay TPV was €48.0 million, a year-over-year increase of 50%, more than doubling on-platform TPV penetration from 12.2% of GMV in the third quarter of 2019 to 25.6% of GMV in the third quarter of 2020.
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“We are making significant progress on our path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50% year-over-year”, commented Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.

“Having established Jumia as the leading pan-African e-commerce platform, we have focused over the past 12 months on firmly advancing towards breakeven. The significant progress achieved was mostly attributable to the thorough work we have done on the fundamentals of our business, with limited support from external factors such as COVID-19. The business mix rebalancing initiated late last year has increased our exposure to everyday product categories and, combined with enhanced promotional discipline, supported unit economics. In addition, we made multiple enhancements across our logistics and marketing operations that led to a decrease in fulfillment and marketing expenses for the third quarter of 2020 by 20% and 55% respectively, on a year-over-year basis. The portfolio optimization completed last year, along with overhead rationalization, contributed to a decrease in G&A costs excluding share-based compensation of 24% year-over-year in the third quarter of 2020. Lastly, we continued to drive robust growth of JumiaPay by more than doubling the penetration of JumiaPay TPV to over 25% of GMV in the third quarter of 2020, a clear sign of our ability to drive pre-payment adoption on our platform efficiently. We believe the fundamentals of our business have never been stronger, setting a robust foundation for the long term, profitable growth of Jumia.”

THIRD QUARTER 2020 – SELECTED BUSINESS HIGHLIGHTS

Brand momentum

●	We continue to position Jumia as the destination of choice for brands in Africa and onboarded over 60 brands on the platform during the quarter.
●	We hosted the Jumia Brands Festival over a seven-day period in September. More than 200 participating brands offered consumers special promotions, including free shipping, across product categories. Participating brands, some of whom across multiple geographies, included l’Oreal, Nivea, Johnson & Johnson, Reckitt Benckiser, Nestle, Pernod Ricard, Mondelez, Pepsi, Nike and many more. In Egypt, Orders during the Brand Festival week surged by more than 70% compared to the prior 6-week average. Fashion, Beauty and FMCG categories accounted for more than 80% of items sold with a number of brands in these segments experiencing triple digit volume uplift during the event compared to their prior 6-week averages.
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●

We continue to position Jumia as the destination of choice for brands in Africa and onboarded over 60 brands on the platform during the quarter.

●

We hosted the Jumia Brands Festival over a seven-day period in September. More than 200 participating brands offered consumers special promotions, including free shipping, across product categories. Participating brands, some of whom across multiple geographies, included l’Oreal, Nivea, Johnson & Johnson, Reckitt Benckiser, Nestle, Pernod Ricard, Mondelez, Pepsi, Nike and many more. In Egypt, Orders during the Brand Festival week surged by more than 70% compared to the prior 6-week average. Fashion, Beauty and FMCG categories accounted for more than 80% of items sold with a number of brands in these segments experiencing triple digit volume uplift during the event compared to their prior 6-week averages.

---

Cost efficiencies

●	For physical goods logistics, we completed the migration of our delivery pricing model from a price per successfully delivered package to a price per successful stop. This new pricing model generated freight & shipping costs savings of more than €1 million from its implementation in April to September 2020.
●	To drive marketing costs efficiencies, we focus on developing smart algorithms to enhance user experience and ultimately conversion rates. As we increase the depth of our assortment, we are enhancing our product sorting algorithm to improve user experience and product discovery. We have developed an AI-powered algorithm using Learning-to-Rank (“LTR”) technique that leverages user signals (clicks, add-to-carts, orders etc.) and product information to optimize product ranking on category and search results pages. Pilots of the algorithm are showing improved conversion rate from search/navigation to add-to-cart by more than 5%.
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●

For physical goods logistics, we completed the migration of our delivery pricing model from a price per successfully delivered package to a price per successful stop. This new pricing model generated freight & shipping costs savings of more than €1 million from its implementation in April to September 2020.

●

To drive marketing costs efficiencies, we focus on developing smart algorithms to enhance user experience and ultimately conversion rates. As we increase the depth of our assortment, we are enhancing our product sorting algorithm to improve user experience and product discovery. We have developed an AI-powered algorithm using Learning-to-Rank (“LTR”) technique that leverages user signals (clicks, add-to-carts, orders etc.) and product information to optimize product ranking on category and search results pages. Pilots of the algorithm are showing improved conversion rate from search/navigation to add-to-cart by more than 5%.

---

JumiaPay development

●	As part of offering an increasing range of financial services to consumers, we are currently piloting in Egypt a pre-paid physical and virtual card, in partnership with Mastercard and ADIB, a leading bank in the Middle East & North Africa region.
●	We launched the pilot of Jumia Games on our JumiaPay app across five countries, in partnership with Mondia, a marketing and digital content distribution company. Jumia Games is a subscription-based service offering unlimited access to over 500 games, including in-app purchases. This initiative aims at providing consumers with a varied range of digital services and engaging experiences, while creating more payment use cases for JumiaPay.
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●

As part of offering an increasing range of financial services to consumers, we are currently piloting in Egypt a pre-paid physical and virtual card, in partnership with Mastercard and ADIB, a leading bank in the Middle East & North Africa region.

●

We launched the pilot of Jumia Games on our JumiaPay app across five countries, in partnership with Mondia, a marketing and digital content distribution company. Jumia Games is a subscription-based service offering unlimited access to over 500 games, including in-app purchases. This initiative aims at providing consumers with a varied range of digital services and engaging experiences, while creating more payment use cases for JumiaPay.

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Commitment to community

●

As part of our continued support of businesses affected by COVID-19 disruption, we partnered with the Moroccan Ministry of Handicraft to help Moroccan craftsmen and cooperatives across 16 cities reach consumers online via Jumia. With a rich tradition of craftsmanship, this sector sits at the core of Moroccan culture and heritage. We are proud to support the digital transformation of this industry and make Moroccan craft accessible to millions of consumers online

SELECTED OPERATIONAL KPIs

1.	Marketplace KPIs


	For the three months ended						For the nine months ended			****
	September 30,				YoY		September 30,			****	YoY
	2019	****	2020	****	Change	****	2019	****	2020	****	Change
Annual Active Consumers (mm)	5.5		6.7		22.8	%	5.5		6.7		22.8	%
Orders (mm)	7.0		6.6		(5.0)	%	18.3		19.8		8.6	%
GMV ( mm)	261.1	^(1)^	187.3		(28.3)	%	738.1	^(1)^	605.3		(18.0)	%

All values are in Euros.

^(1)^Adjusted for perimeter changes: exit of Cameroon, Rwanda, Tanzania and the travel activities and improper sales practices.

●	Annual Active Consumers reached 6.7 million in the third quarter of 2020, up 23% year-over-year as we continued focusing on both consumer acquisition and existing consumers re-engagement.
●	Orders reached 6.6 million, down 5% year-over-year on the back of a 20% decrease in digital services transactions on the JumiaPay app, while Orders on the rest of the platform were stable. The trend within the digital services on the JumiaPay app is concentrated in airtime recharge transactions as a result of reduced consumer incentives within this category which has historically been promotionally intensive.
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●	GMV was €187.3 million, down 28% on a year-over-year basis, as the effects of the business mix rebalancing initiated late last year continued playing out during the third quarter of 2020. To support our path to profitability, we decreased promotional intensity and consumer incentives on lower consumer lifetime value business, while increasing our focus on every-day product categories to drive consumer adoption and usage. This business mix rebalancing drove a c. 24% decrease in average order value from €37.3 in the third quarter of 2019 to €28.2 in the third quarter of 2020, affecting overall GMV performance. We have now reached a diversified category mix where phones and electronics went from contributing 56% of GMV in the third quarter of 2019 to 43% in the third quarter of 2020.
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●	We are making meaningful progress in the reduction of the overall rate of Cancellations, Failed Deliveries and Returns (“CFDR”) as we drive further operational efficiencies, including due to an increase in prepayment penetration via JumiaPay. While actual rates of CFDR may vary from one quarter to the other, we observed a significant reduction in this ratio between the third quarter of 2019 and the third quarter of 2020.
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o	The CFDR rate as a percentage of GMV decreased from 31% in the third quarter of 2019 to 23% in the third quarter of 2020. The CFDR rate as a percentage of Orders decreased from 23% in the third quarter of 2019 to 14% in the third quarter of 2020. The CFDR rate is typically lower for Orders than for GMV as higher average item value orders tend to show higher CFDR rates.
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o	Trends of GMV after CFDR by category showed year-over-year growth of food delivery and other on-demand services of 37%, growth of digital services offered on the JumiaPay app of 14% while physical goods other than phones and electronics remained flat and phones and electronics contracted by 41% year-over-year, as a result of the business mix rebalancing initiated in late 2019. Food delivery recovered in the third quarter of 2020, after being affected by COVID-19 related restaurant shutdowns during the second quarter of 2020.
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o	Trends of Orders after CFDR by category showed 48% year-over-year growth of food delivery and other on-demand services, growth of physical goods other than phones and electronics of 15%, contraction of 8% in phones and electronics and contraction of digital services offered on the JumiaPay app of 20%, concentrated in airtime recharge transactions as a result of reduced consumer incentives on these services.
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●	The effects of the COVID-19 pandemic continued playing out during the third quarter of 2020, albeit with less supply and logistics disruption than the first half of 2020.
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o	The COVID-19 pandemic created economic challenges that negatively impacted consumer sentiment in our countries of operation.
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o	As a result of limited recourse to nationwide lockdowns across our footprint, the pandemic did not lead to any drastic changes in consumer behavior on our platform nor meaningful acceleration in consumer adoption of e-commerce at a pan-African level.
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o	The supply and logistics disruption that we encountered in selected geographies and in our food delivery business in the first and second quarters of 2020, largely subsided in the third quarter.
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o	However, the development of the virus remains a fluid situation and we expect it to drive continued macro and operating environment uncertainty.
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●	Beyond external factors that may affect usage development, we drive usage growth as a part of a broader equation where we seek to balance usage growth, platform monetization and cost efficiency. We manage this equation on a dynamic basis and we chose to focus over the past few quarters, and in the third quarter of 2020 in particular, on driving further cost efficiencies and making steady progress towards profitability. We achieved a high level of marketing efficiency with Sales & Advertising expense decreasing by 55% year-over-year in the third quarter of 2020. Our unit economics improved significantly with Adjusted EBITDA loss per Order decreasing by 47% year-over-year, from €6.5 in the third quarter of 2019 to €3.4 in the third quarter of 2020. This development was partly driven by the rebalancing of our business mix and structural improvements across the full cost structure. These changes provide us with a robust foundation to shift further focus into the usage growth aspect of the equation and drive usage growth in a way that takes us forward on our path to profitability.
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2.	JumiaPay KPIs


	For the three months ended						For the nine months ended
	September 30,				YoY		September 30,				YoY
	2019	****	2020	****	Change	****	2019	****	2020	****	Change
TPV ( million)	32.0		48.0		50.3	%	78.7		137.1		74.3	%
JumiaPay Transactions (million)	2.1		2.3		5.9	%	5.2		6.9		34.0	%

All values are in Euros.

●	TPV increased by 50% from €32.0 million in the third quarter of 2019 to €48.0 million in the third quarter of 2020. On-platform penetration of JumiaPay as a percentage of GMV increased to 25.6% in the third quarter of 2020, more than twice the level of penetration of 12.2% in the third quarter of 2019.
●	JumiaPay Transactions increased by 6% from 2.1 million in the third quarter of 2019 to 2.3 million in the third quarter of 2020, with Transactions above €10, which include prepaid purchases on the Jumia physical goods marketplace and Jumia Food platforms, growing by almost 90% over the same period. Overall, 34.1% of Orders placed on the Jumia platform in the third quarter of 2020 were paid for using JumiaPay, compared to 30.6% in the third quarter of 2019.
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●	As of September 30, 2020, JumiaPay was live in 8 markets: Nigeria, Egypt, Morocco, Ivory Coast, Ghana, Kenya, Tunisia and Uganda.
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SELECTED FINANCIAL INFORMATION


	For the three months ended					****	For the nine months ended
	September 30,				YoY		September 30,				YoY
( million)	2019	****	2020	****	Change	****	2019	****	2020	****	Change
Revenue	40.9		33.7		(17.7)	%	111.1		97.9		(11.9)	%
Marketplace revenue	19.7		23.4		18.9	%	52.4		66.1		26.1	%
Commissions	6.1		8.7		43.2	%	16.6		24.7		48.6	%
Fulfillment	7.3		8.3		13.0	%	18.0		22.3		24.1	%
Marketing & Advertising	1.6		1.5		(2.2)	%	3.8		4.7		24.6	%
Value Added Services	4.7		4.9		3.6	%	14.0		14.4		2.3	%
First Party revenue	21.0		9.8		(53.3)	%	58.1		30.7		(47.2)	%
Platform revenue	40.7		33.2		(18.4)	%	110.6		96.8		(12.5)	%
Non-Platform revenue	0.3		0.5		88.3	%	0.6		1.1		86.1	%

Gross Profit	19.0		23.2		22.5	%	51.1		64.9		27.1	%

Fulfillment expense	(20.7)		(16.6)		(19.7)	%	(53.5)		(49.8)		(6.9)	%
Sales & Advertising expense	(13.8)		(6.2)		(55.1)	%	(40.5)		(22.3)		(45.0)	%
Technology and Content expense	(7.0)		(6.3)		(9.6)	%	(19.5)		(20.5)		5.1	%
General and Administrative expense ("G&A")	(32.7)		(22.7)		(30.4)	%	(105.3)		(84.2)		(20.1)	%
of which Share Based Compensation ("SBC")	(7.1)		(3.4)		(51.9)	%	(31.9)		(12.0)		(62.4)	%
G&A expense, excluding SBC	(25.6)		(19.3)		(24.5)	%	(73.4)		(72.2)		(1.6)	%

Adjusted EBITDA	(45.4)		(22.7)		(50.1)	%	(129.3)		(91.2)		(29.5)	%

Operating loss	(54.6)		(28.0)		(48.8)	%	(166.8)		(109.3)		(34.5)	%

All values are in Euros.

Revenue

●	First Party revenue decreased by 53% in the third quarter of 2020 compared to the third quarter of 2019. This was in line with our strategy to undertake fewer sales on a first party basis as we focus on running an asset light marketplace model where third-party sellers offer consumers an expanding range of products and services. 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 are largely eliminated at the Gross profit level.
●	Marketplace revenue reached €23.4 million in the third quarter of 2020, up 19% compared to the third quarter of 2019. This was mostly driven by an increase in Commissions and Fulfillment revenue, which increased by 43% and 13% year-over-year respectively.
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o	Commissions grew due to an increase in the share of higher commission rate categories including fashion, beauty or FMCG as well as lower promotional intensity.
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o	Fulfillment revenue increased by 13% as a result of continued shipping fees adjustments as well as pricing changes within our cross-border logistics, whereby part of the international shipping fees that were previously charged to sellers were instead passed on to consumers. This change resulted
---	---
in some of our international logistics revenue being recorded as Fulfillment revenue instead of revenue from Value Added Services.
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o	Value Added Services increased by 4% as adjustments to our shipping fees led to an increase in shipping contributions from local sellers, which more than offset the effects of the aforementioned pricing changes in our cross-border logistics.
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o	We manage monetization pressure on our sellers in a very disciplined manner and, during the third quarter of 2020, reduced pressure on the advertising front leading to a decrease of 2% of this revenue stream while placing more focus on fulfillment costs pass-through.
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Gross Profit

Gross profit increased by 22% to €23.2 million in the third quarter of 2020 from €19.0 million in the third quarter of 2019 as a result of the increase in Marketplace revenue.

Fulfillment Expense

●	Fulfillment expense decreased by 20% in the third quarter of 2020 on a year-over-year basis as a result of operational enhancements across our logistics operations. These included the optimization of our cross-border shipping matrix, staff costs savings in our fulfillment centers and a change in our volume pricing model from cost per package to cost per stop.
●	During the third quarter of 2020, Gross profit after Fulfillment expense reached €6.6 million compared to a loss of €1.7 million in the third quarter of 2019, demonstrating continued unit economics improvement as we drive usage on our platform.
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●	Lastly, we are able to pass-on an increasing proportion of our Fulfillment expense to the combination of consumers and sellers via our Fulfillment and Value Added Services revenue streams respectively. The pass-through of our Fulfillment expense, measured as the ratio of the sum of Fulfillment and Value Added Services revenue over Fulfillment expense, increased from 58% in the third quarter of 2019 to 79% in the third quarter of 2020.
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Sales & Advertising Expense

●	Sales & Advertising expense decreased by 55% from €13.8 million in the third quarter of 2019 to €6.2 million in the third quarter of 2020, its lowest level in more than 3 years. This is driving strong marketing efficiency with Sales & Advertising expense per Order decreasing by 53%, from €2.0 per Order in the third quarter of 2019 to €0.9 in the third quarter of 2020. This development was partly attributable to continued enhancements to our performance marketing strategy across search and social media channels, notably through more granular segmentation of our target market with differentiated campaigns and content for each segment.
●	While quarterly fluctuations in this metric may occur, we reached during the third quarter of 2020 the milestone of breakeven at Gross profit after Fulfillment and Sales & Advertising expenses, with the majority of countries reaching breakeven at this level.
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●

Sales & Advertising expense decreased by 55% from €13.8 million in the third quarter of 2019 to €6.2 million in the third quarter of 2020, its lowest level in more than 3 years. This is driving strong marketing efficiency with Sales & Advertising expense per Order decreasing by 53%, from €2.0 per Order in the third quarter of 2019 to €0.9 in the third quarter of 2020. This development was partly attributable to continued enhancements to our performance marketing strategy across search and social media channels, notably through more granular segmentation of our target market with differentiated campaigns and content for each segment.

●

While quarterly fluctuations in this metric may occur, we reached during the third quarter of 2020 the milestone of breakeven at Gross profit after Fulfillment and Sales & Advertising expenses, with the majority of countries reaching breakeven at this level.

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General and Administrative Expense

General & Administrative expense, excluding SBC, reached €19.3 million, down 24% on a year-over-year basis. This was partly a result of staff costs reductions and professional fees savings, largely attributable to the portfolio optimization and cost rationalization initiatives undertaken in late 2019.

Operating loss

Operating loss was €28.0 million in the third quarter of 2020 while Adjusted EBITDA loss was €22.7 million, decreasing by 49% and 50% on a year-over-year basis respectively, demonstrating meaningful progress on our path to profitability.

Cash Position

At the end of September 30, 2020, we had €147.1 million of cash on our balance sheet. During the third quarter of 2020, cash utilization was €27.2 million due to a net decrease in Cash & Cash equivalents of €22.1 million, down 52% year-over-year, and effects of exchange rate changes on Cash & Cash equivalents of €5.1 million largely attributable to translation effects on cash held in USD.

GUIDANCE

Our focus continues to be on making further progress towards breakeven and we remain committed to reducing our Adjusted EBITDA loss in absolute terms in the fourth quarter of 2020 compared to the fourth quarter of 2019.

The ongoing COVID-19 pandemic as well as the ensuing economic challenges result in substantial uncertainty concerning our operating environment and financial outlook. This may be further exacerbated by instances of social protests, as experienced in Nigeria over the course of October as part of the End SARS campaign.

These external factors, combined with continued focus on cost efficiency and, to a lesser extent, the continued effects of the business mix rebalancing, are likely to drive continued volatility across some of our key performance indicators.

CONFERENCE CALL AND WEBCAST INFORMATION

Jumia will host a conference call today, November 10, 2020 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): 1-844-750-4870

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

Canada Toll Free: 1-855-669-9657

UK Toll Free: 0800-279-9489

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)

Interim condensed consolidated statement of comprehensive income as of September 30, 2019 and 2020


		For the three months ended				For the nine months ended
	****	September 30,	****	September 30,	****	September 30,	****	September 30,
In thousands of EUR		2019		2020		2019		2020
Revenue		40,916		33,672		111,132		97,863
Cost of revenue		21,937		10,425		60,066		32,952
Gross profit		18,979		23,247		51,066		64,911

Fulfillment expense		20,707		16,623		53,512		49,818
Sale and advertising expense		13,775		6,190		40,529		22,284
Technology and content expense		6,984		6,312		19,544		20,540
General and administrative expense		32,660		22,724		105,325		84,186
Other operating income		713		648		1,392		2,801
Other operating expense		177		1		308		154
Operating loss		(54,611)		(27,955)		(166,760)		(109,270)

Finance income		4,390		1,036		4,912		2,969
Finance costs, net		(103)		4,674		1,573		6,339
Loss before Income tax		(50,118)		(31,593)		(163,421)		(112,640)

Income tax expense		(208)		793		53		1,387
Loss for the period		(49,910)		(32,386)		(163,474)		(114,027)

Attributable to:
Equity holders of the Company		(49,817)		(32,323)		(163,228)		(113,845)
Non-controlling interests		(93)		(63)		(246)		(182)
Loss for the period		(49,910)		(32,386)		(163,474)		(114,027)

Other comprehensive income/loss to be classified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations - net of tax		(19,772)		18,197		(30,279)		48,049
Other comprehensive income / (loss) on net investment in foreign operations - net of tax		20,525		(18,665)		31,310		(49,154)
Other comprehensive income / (loss)		753		(468)		1,031		(1,105)
Total comprehensive loss for the period		(49,157)		(32,854)		(162,443)		(115,132)

Attributable to:
Equity holders of the Company		(49,064)		(32,794)		(162,197)		(114,950)
Non-controlling interests		(93)		(60)		(246)		(182)
Total comprehensive loss for the period		(49,157)		(32,854)		(162,443)		(115,132)

(UNAUDITED)

Interim condensed consolidated statement of financial position as of December 31, 2019 and September 30, 2020


		As of
	****	December 31,	****	September 30,
In thousands of EUR		2019		2020
Assets	****

Non-current assets	****
Property and equipment		17,434		15,509
Intangible assets		47		507
Deferred tax assets		109		102
Other non-current assets		1,508		1,352
Total Non-current assets	****	19,098	****	17,470

Current assets	****
Inventories		9,996		7,688
Trade and other receivables		16,936		10,070
Income tax receivables		725		938
Other taxes receivables		5,395		5,255
Prepaid expenses		12,593		5,995
Term deposits and other current assets		62,418		1,039
Cash and cash equivalents		170,021		147,149
Total Current assets	****	278,084	****	178,134
Total Assets	****	297,182	****	195,604

Equity and Liabilities	****

Equity	****
Share capital		156,816		162,162
Share premium		1,018,276		1,018,276
Other reserves		104,114		108,776
Accumulated losses		(1,096,134)		(1,210,421)
Equity attributable to the equity holders of the Company	****	183,072	****	78,793
Non-controlling interests	****	(498)	****	(675)
Total Equity	****	182,574	****	78,118

Liabilities	****
Non-current liabilities	****
Non-current borrowings		6,127		6,786
Provisions for liabilities and other charges – non-current		226		308
Deferred income – non-current		1,201		923
Total Non-current liabilities	****	7,554	****	8,017

Current liabilities	****
Current borrowings		3,056		2,573
Trade and other payables		56,438		52,405
Income tax payables		10,056		10,245
Other taxes payable		4,473		9,058
Provisions for liabilities and other charges		27,040		30,630
Deferred income		5,991		4,558
Total Current liabilities	****	107,054	****	109,469
Total Liabilities	****	114,608	****	117,486
Total Equity and Liabilities	****	297,182	****	195,604

(UNAUDITED)

Interim condensed consolidated statement of cash flows as of September 30, 2019 and 2020


	For the three months ended				For the nine months ended
	September 30,		September 30,		September 30,	****	September 30,
In thousands of	2019	****	2020	****	2019	****	2020
Loss before Income tax	(50,118)		(31,593)		(163,421)		(112,640)
Depreciation and amortization of tangible and intangible assets	2,054		1,893		5,528		6,106
Impairment losses on loans, receivables and other assets	559		288		2,607		3,538
Impairment losses on obsolete inventories	374		208		727		600
Share-based payment expense	7,100		3,418		31,934		11,998
Net (gain)/loss from disposal of tangible and intangible assets	(5)		1		(170)		11
Net (gain)/loss from disposal of financial assets at amortized cost	—		—		6		—
Impairment losses on investment in subsidiaries	28		—		28		—
Change in provision for other liabilities and charges	1,493		(2,957)		3,039		4,027
Lease modification (income)/expense	—		(57)		—		(57)
Interest (income)/expenses	(498)		222		(302)		374
Net unrealized foreign exchange (gain)/loss	(3,910)		4,292		(3,022)		4,361
(Increase)/Decrease in trade and other receivables, prepayments and VAT receivables	6,248		2,801		(6,188)		9,460
(Increase)/Decrease in inventories	3,275		1,120		(1,516)		327
Increase/(Decrease) in trade and other payables, deferred income and VAT payables	(9,136)		179		390		1,396
Income taxes paid	(145)		(449)		(1,271)		(1,396)
Net cash flows used in operating activities	(42,681)		(20,634)		(131,631)		(71,895)
Cash flows from investing activities
Purchase of property and equipment	(1,481)		(436)		(3,608)		(1,348)
Proceeds from disposal of property and equipment	3		—		12		3
Purchase of intangible assets	(30)		(487)		(31)		(496)
Proceeds from sale of intangible assets	3		—		222		—
Payment for acquisition of subsidiary, net of cash acquired	9		—		7		—
Interest received	45		524		533		651
Movement in other non-current assets	(6)		—		(184)		78
Movement in term deposits and other current assets	—		(392)		(62,715)		61,675
Net cash flows (used in) / from investing activities	(1,457)		(791)		(65,764)		60,563
Cash flows from financing activities
Repayment of borrowings	(5)		—		(5)		—
Interest settled - financing	(78)		20		(78)		(27)
Repayment of lease interest	67		(323)		(700)		(985)
Repayment of lease liabilities	(1,210)		(518)		(2,547)		(3,046)
Equity transaction costs	(1,109)		(118)		(4,856)		(426)
Capital contributions	5		—		329,178		—
Proceeds from exercise of share options	—		260		—		571
Net cash flows (used in) / from financing activities	(2,330)		(679)		320,992		(3,913)
Net decrease/increase in cash and cash equivalents	(46,468)		(22,104)		123,597		(15,245)
Effect of exchange rate changes on cash and cash equivalents	2,145		(5,073)		2,841		(7,627)
Cash and cash equivalents at the beginning of the period	271,396		174,326		100,635		170,021
Cash and cash equivalents at the end of the period	227,073		147,149		227,073		147,149

All values are in Euros.

Forward Looking Statements

This release includes forward-looking statements. All statements other than statements of historical facts contained in this release, including statements regarding our future results of operations and financial position, industry dynamics, business strategy and plans and our objectives for future operations, are forward-looking statements. These statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “believes,” “estimates”, “potential” or “continue” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statement, including, without limitation, the risks described under Item 3. “Key Information—D. Risk Factors,” in our Annual Report on Form 20-F as filed with the US Securities and Exchange Commission. Moreover, new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We caution you therefore against relying on these forward-looking statements, and we qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements included in this release are made only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor our advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Neither we nor our advisors undertake any obligation to update any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations, except as may be required by law. You should read this release with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Non-IFRS and Other Financial and Operating Metrics

Changes, percentages, ratios and aggregate amounts presented have been calculated on the basis of unrounded figures.

This release includes certain financial measures and metrics not based on IFRS, including Adjusted EBITDA, as well as operating metrics, including Annual Active Consumers, Orders and GMV. We define Annual Active Consumers, Orders, GMV, Total Payment Volume, JumiaPay Transactions and Adjusted EBITDA as follows:

Annual Active Consumers means unique consumers who placed an order for a product or a service on our platform, within the 12-month period preceding the relevant date, irrespective of cancellations or returns.

We believe that Annual Active Consumers is a useful indicator for adoption of our offering by consumers in our markets.

Orders corresponds to the total number of orders for products and services on our platform, irrespective of cancellations or returns, for the relevant period.

We believe that the number of orders is a useful indicator to measure the total usage of our platform, irrespective of the monetary value of the individual transactions.

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

We believe that GMV is a useful indicator for the value transacted on our platform that is not influenced by shifts in our sales between first-party and third-party sales or the method of payment.

We use Annual Active Consumers, Orders and GMV as some of many indicators to monitor usage of our platform.

Total Payment Volume (“TPV”) corresponds to the total value of orders for products and services completed using JumiaPay including shipping fees, value-added tax, and before deductions of any discounts or vouchers, irrespective of cancellations or returns, for the relevant period.

We believe that TPV provides a useful indicator of the development, and adoption by consumers, of our payment services offerings.

JumiaPay Transactions corresponds to the total number of orders for products and service completed using JumiaPay, irrespective of cancellations or returns, for the relevant period.

We believe that JumiaPay Transactions provides a useful indicator of the development, and adoption by consumers, of our payment services offerings for orders on our platform irrespective of the monetary value of the individual transactions.

We use TPV and the number of JumiaPay Transactions to measure the development of our payment services.

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

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 period. 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 period.

The following table provides a reconciliation of loss for the period to Adjusted EBITDA for the periods indicated:


	For the three months ended			****	For the nine months ended
	September 30,				September 30,
( million)	2019	****	2020	****	2019	****	2020
Loss for the period	(49.9)	****	(32.4)	****	(163.5)	****	(114.0)
Income tax expense	(0.2)		0.8		0.1		1.4
Net Finance costs / (income)	(4.5)		3.6		(3.3)		3.4
Depreciation and amortization	2.1		1.9		5.6		6.1
Share-based payment expense	7.1		3.4		31.9		12.0
Adjusted EBITDA	(45.4)	****	(22.7)	****	(129.3)	****	(91.2)

All values are in Euros.

JUMIA TECHNOLOGIES AG

INDEX TO FINANCIAL STATEMENTS


		Page

Unaudited Interim Condensed Consolidated Statement of Financial Position of JUMIA TECHNOLOGIES AG at September 30, 2020 and December 31, 2019		2

Unaudited Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) of JUMIA TECHNOLOGIES AG for the periods ended September 30, 2020 and 2019		3

Unaudited Interim Condensed Consolidated Statement of Changes in Equity of JUMIA TECHNOLOGIES AG for the nine months ended September 30, 2020 and 2019		4

Unaudited Interim Condensed Consolidated Statement of Cash Flows of JUMIA TECHNOLOGIES AG for the periods ended September 30, 2020 and 2019		5

Notes to the Unaudited Interim Condensed Consolidated Financial Statements for the period ended September 30, 2020		6

JUMIA TECHNOLOGIES AG

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF SEPTEMBER 30, 2020 AND DECEMBER 31, 2019


			As of
			September 30,		December 31,
In thousands of	Note		2020	****	2019
Assets
Non-current assets
Property and equipment	5		15,509		17,434
Intangible assets			507		47
Deferred tax assets			102		109
Other non-current assets			1,352		1,508
Total Non-current assets		****	17,470	****	19,098
Current assets
Inventories	6		7,688		9,996
Trade and other receivables	9		10,070		16,936
Income tax receivables			938		725
Other taxes receivable			5,255		5,395
Prepaid expenses	10		5,995		12,593
Term deposits	8		1,039		62,418
Cash and cash equivalents	7		147,149		170,021
Total Current assets		****	178,134	****	278,084
Total Assets		****	195,604	****	297,182
Equity and Liabilities
Equity
Share capital	11		162,162		156,816
Share premium	11		1,018,276		1,018,276
Other reserves	12		108,776		104,114
Accumulated losses			(1,210,421)		(1,096,134)
Equity attributable to the equity holders of the Company		****	78,793	****	183,072
Non-controlling interests		****	(675)	****	(498)
Total Equity		****	78,118	****	182,574
Liabilities
Non-current liabilities
Non-current borrowings	15		6,786		6,127
Provisions for liabilities and other charges	16		308		226
Deferred income			923		1,201
Total Non-current liabilities			8,017		7,554
Current liabilities
Current borrowings	15		2,573		3,056
Trade and other payables	14		52,405		56,438
Income tax payables	22		10,245		10,056
Other taxes payable			9,058		4,473
Provisions for liabilities and other charges	16		30,630		27,040
Deferred income			4,558		5,991
Total Current liabilities		****	109,469	****	107,054
Total Liabilities		****	117,486	****	114,608
Total Equity and Liabilities		****	195,604	****	297,182

All values are in Euros.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

JUMIA TECHNOLOGIES AG

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE PERIODS ENDED SEPTEMBER 30, 2020 AND 2019


		For the three months ended				For the nine months ended
		September 30				September 30
In thousands of	Note	2020	****	2019	****	2020	****	2019
Revenue	17	33,672		40,916		97,863		111,132
Cost of revenue		10,425		21,937		32,952		60,066
Gross profit		23,247		18,979		64,911		51,066
Fulfillment expense	18	16,623		20,707		49,818		53,512
Sales and advertising expense	19	6,190		13,775		22,284		40,529
Technology and content expense	20	6,312		6,984		20,540		19,544
General and administrative expense	21	22,724		32,660		84,186		105,325
Other operating income		648		713		2,801		1,392
Other operating expense		1		177		154		308
Operating loss		(27,955)		(54,611)		(109,270)		(166,760)
Finance income		1,036		4,390		2,969		4,912
Finance costs, net		4,674		(103)		6,339		1,573
Loss before Income tax		(31,593)		(50,118)		(112,640)		(163,421)
Income tax (benefit)/expense	22	793		(208)		1,387		53
Loss for the period		(32,386)		(49,910)		(114,027)		(163,474)
Attributable to:
Equity holders of the Company		(32,323)		(49,817)		(113,845)		(163,228)
Non-controlling interests		(63)		(93)		(182)		(246)
Loss for the period		(32,386)		(49,910)		(114,027)		(163,474)
Other comprehensive income/(loss) to be classified to profit or loss in subsequent periods
Exchange differences (gain/loss) on translation of foreign operations - net of tax		18,197		(19,772)		48,049		(30,279)
Other comprehensive income / (loss) on net investment in foreign operations - net of tax		(18,665)		20,525		(49,154)		31,310
Other comprehensive income/(loss)		(468)		753		(1,105)		1,031
Total comprehensive loss for the period		(32,854)		(49,157)		(115,132)		(162,443)
Attributable to:
Equity holders of the Company		(32,794)		(49,064)		(114,950)		(162,197)
Non-controlling interests		(60)		(93)		(182)		(246)
Total comprehensive loss for the period		(32,854)		(49,157)		(115,132)		(162,443)

Earnings per share (EPS) in :
Basic and Diluted Loss for the period attributable to ordinary equity holders of the parent	23	(0.20)		(0.32)		(0.72)		(1.21)

All values are in Euros.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

JUMIA TECHNOLOGIES AG

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019


			Attributable to equity holders of the Company
											Non-
	Share		Share		Accumulated		Other				controlling		Total
In thousands of	Capital	****	premium	****	losses	****	reserves	****	Total	****	interests	****	Equity
As of January 1, 2019	133		845,787		(862,048)		66,093		49,965		(117)		49,848
Loss for the period	—		—		(163,228)		—		(163,228)		(246)		(163,474)
Other comprehensive income/(loss)	—		—		(1)		1,032		1,031		—		1,031
Total comprehensive loss for the period	—	****	—	****	(163,229)		1,032		(162,197)		(246)	****	(162,443)
Capital contribution (Note 11)	156,683		172,489		—		—		329,172		—		329,172
Share-based payments (Note 13)	—		—		—		31,934		31,934		—		31,934
Equity transaction costs	—		—		(7,356)		—		(7,356)		—		(7,356)
Change in Non-controlling interests	—		—		(49)		24		(25)		(4)		(29)
As of September 30, 2019	156,816	****	1,018,276	****	(1,032,682)		99,083		241,493		(367)		241,126

As of January 1, 2020	156,816	****	1,018,276	****	(1,096,134)		104,114	****	183,072	****	(498)	****	182,574
Loss for the period	—		—		(113,845)		—		(113,845)		(182)	****	(114,027)
Other comprehensive income/(loss)	—		—		—		(1,105)		(1,105)		0	****	(1,105)
Total comprehensive loss for the period	—	****	—	****	(113,845)		(1,105)	****	(114,950)	****	(182)	****	(115,132)
Exercise of options (Note 11)	5,346		—		—		(4,775)		571		—	****	571
Share-based payments (Note 13)	—		—		—		10,542		10,542		—	****	10,542
Equity transaction costs	—		—		(440)		—		(440)		—	****	(440)
Change in Non-controlling interests	—		—		(2)		—		(2)		5	****	3
As of September 30, 2020	162,162	****	1,018,276	****	(1,210,421)		108,776	****	78,793	****	(675)	****	78,118

All values are in Euros.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

JUMIA TECHNOLOGIES AG

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED SEPTEMBER 30, 2020 AND 2019


			For the three months ended				For the nine months ended
			September 30,				September 30,
In thousands of	Note	****	2020	****	2019	****	2020	****	2019
Loss before Income tax			(31,593)		(50,118)		(112,640)		(163,421)
Depreciation and amortization of tangible and intangible assets	21		1,893		2,054		6,106		5,528
Impairment losses on loans, receivables and other assets	9, 21		288		559		3,538		2,607
Impairment losses on obsolete inventories	6		208		374		600		727
Share-based payment expense	13		3,418		7,100		11,998		31,934
Net (gain)/loss from disposal of tangible and intangible assets			1		(5)		11		(170)
Net (gain)/loss from disposal of financial assets at amortized cost			—		—		—		6
Impairment losses on investment in subsidiaries			—		28		—		28
Change in provision for other liabilities and charges			(2,957)		1,493		4,027		3,039
Lease modification(income)/expenses			(57)		—		(57)		—
Interest (income)/expenses			222		(498)		374		(302)
Net unrealized foreign exchange (gain)/loss			4,292		(3,910)		4,361		(3,022)
(Increase)/Decrease in trade and other receivables, prepaid expenses and other tax receivables			2,801		6,248		9,460		(6,188)
(Increase)/Decrease in inventories			1,120		3,275		327		(1,516)
Increase/(Decrease) in trade and other payables, deferred income and other tax payables			179		(9,136)		1,396		390
Income taxes paid			(449)		(145)		(1,396)		(1,271)
Net cash flows used in operating activities			(20,634)		(42,681)	****	(71,895)	****	(131,631)
Cash flows from investing activities
Purchase of property and equipment			(436)		(1,481)		(1,348)		(3,608)
Proceeds from sale of property and equipment			—		3		3		12
Purchase of intangible assets			(487)		(30)		(496)		(31)
Proceeds from sale of intangible assets			—		3		—		222
Payment for acquisition of subsidiary, net of cash acquired			—		9		—		7
Interest received			524		45		651		533
Movement in other non-current assets			—		(6)		78		(184)
Movement in term deposits and other current assets			(392)		—		61,675		(62,715)
Net cash flows (used in) / from investing activities			(791)		(1,457)	****	60,563	****	(65,764)
Cash flows from financing activities
Repayment of borrowings			—		(5)		—		(5)
Interest settled - financing			20		(78)		(27)		(78)
Repayment of lease interest	15		(323)		67		(985)		(700)
Repayment of lease liabilities	15		(518)		(1,210)		(3,046)		(2,547)
Equity transaction costs	11		(118)		(1,109)		(426)		(4,856)
Capital Contributions	11		—		5		—		329,178
Proceeds from exercise of share options	11		260		—		571		—
Net cash flows (used in) / from financing activities			(679)		(2,330)	****	(3,913)	****	320,992
Net increase/(decrease) in cash and cash equivalents			(22,104)		(46,468)	****	(15,245)	****	123,597
Effect of exchange rate changes on cash and cash equivalents			(5,073)		2,145		(7,627)		2,841
Cash and cash equivalents at the beginning of the period	7		174,326		271,396	****	170,021	****	100,635
Cash and cash equivalents at the end of the period	7		147,149		227,073	****	147,149	****	227,073

All values are in Euros.

The accompanying notes are an integral part of these interim condensed consolidated financial statements. 5

JUMIA TECHNOLOGIES AG

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED SEPTEMBER 30, 2020

1 Corporate information

The accompanying consolidated financial statements and notes present the operations of Jumia Technologies AG (the “Company” or “Jumia Tech”) and its subsidiaries (the “Group” or “Jumia”).

The Company was incorporated as Africa Internet Holding GmbH on June 26, 2012, and was transformed into Jumia Technologies AG, a German stock corporation on January 31, 2019. The Company is domiciled in Germany and has its registered office located at Charlottenstraße 4, 10969 Berlin.

In April 2019 Jumia Tech became a listed company on New York Stock Exchange (NYSE), under the symbol JMIA, where 19.80% of total shares were listed, with initial value per share of 14.50 USD.

Jumia is the leading pan-African e-commerce platform. Jumia’s platform consists of a marketplace, which connects sellers with consumers, a logistics service, which enables the shipping and delivery of packages from sellers to consumers, and a payment service, which facilitates transactions among participants active on Jumia’s platform.

The Group has incurred significant losses since its incorporation. The Group expects to continue generating losses as it makes the necessary investments to grow and/or rebalance its business. The Group will therefore continue to require additional funding either from existing or new shareholders.

The interim condensed consolidated financial statements have been prepared on a basis which assumes that the Group will continue as a going concern, and which contemplates the recoverability of assets and the satisfaction of the liabilities and commitments in the normal course of business. The Group has sufficient resources to operate as a going concern for the next 12 months.

On November 8, 2020 the Supervisory Board authorized these interim condensed consolidated financial statements for issuance.

2 Basis of preparation

This interim financial report for the quarterly reporting period ended September 30, 2020 has been prepared in accordance with IAS 34 Interim Financial Reporting.

Our business is seasonal and, consequently, our results tend to fluctuate from quarter to quarter. However, the comparability of the Group's results and financial position of the interim period, is not significantly affected by the level of seasonality.

The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the consolidated financial statements for the year ended December 31, 2019.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of the new standards effective as of January 1, 2020 (Note 4 a)).

The interim condensed consolidated financial statements are presented in euros and all values are rounded to the nearest thousand (€000), except when otherwise indicated.

3 Significant changes in the current reporting period

The financial position and performance of the Group was particularly affected by the following events and transactions during the nine months ended September 30, 2020:

●	The Group agreed to pay a settlement for several class action lawsuits, in the amount of $5 million, $1 million of which will be funded by insurance coverage. In result, the Group recorded in the current period an expense in the amount of €4.5 million. (see Notes 14 and 21).
●	The World Health Organization declared coronavirus and COVID-19 a global health emergency on 30 January 2020. As an e-commerce company operating in Africa, we experienced effects that varied in nature and intensity by country and evolved over time.
---	---
o	In the early part of the first quarter of 2020, factory shutdowns in China affected our cross-border business where we facilitate orders from international sellers in general and Chinese ones in particular. It also impacted some of our local sellers who rely on product imports from China. As work resumed in Chinese factories these disruptions eased gradually and their impact on the first quarter 2020 performance was not significant.
---	---
o	With the virus reaching Africa starting in March 2020, we started seeing local effects of the pandemic. In terms of business impact, the main effect was localized logistic and supply disruption that persisted throughout the second quarter of 2020 with limited tailwinds from a demand standpoint at group level.
---	---
◾	Across the majority of our addressable market, we experienced no meaningful change in consumer behavior, aside from increased demand for essential and every-day products and reduced appetite for higher ticket size, discretionary purchases. We experienced a temporary surge in volumes in some markets, such as Morocco and Tunisia, while in Nigeria and South Africa, we faced significant disruption as a result of movement restriction that only started easing towards the end of the second quarter 2020.
---	---
◾	We have seen increased demand from brands and sellers, across all geographies, to join and expand their business on our platform as the COVID-19 crisis further established e-commerce as an important route to market.
---	---
o	While we encountered less supply and logistics disruption in the third quarter vs the first half of 2020, the effects of the COVID-19 pandemic continued playing out, negatively impacting consumer sentiment in our countries of operation.
---	---
o	Due to the complexity of the overall factors, which cannot be reliably separated from unrelated drivers of changes in the Group’s financial performance, the several impacts could not be quantified.
---	---

Changes in accounting policies, estimates and assumptions

There have been no material revisions to the nature and amount of estimates reported in prior periods, except for the effect of the settlement of the lawsuit. However, as presented above, the effects of COVID-19 have required assessment of significant judgments and estimates to be made, including but not limited to:

●	Determining the net realizable value of inventory that has become slow moving due to the effects of COVID-19; and,

●	Estimates of expected credit losses attributable to accounts receivable arising from sales to customers on credit terms, including the incorporation of forward-looking information to supplement historical credit loss rates.

4 New accounting pronouncements

a)	New standards, interpretations and amendments adopted by the Group

During the current period the Group has adopted the following amendments, which have no material impacts on the Group’s interim consolidated financial statements.

●	Amendments to IFRS 3: Definition of a business
●	Amendments to IAS 1 and IAS 8: Definition of Material.
---	---
●	Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (Phase 1)
---	---
●	Amendments to References to the Conceptual Framework in IFRS Standards
---	---
b)	Standards issued during the interim period but not yet effective in the interim condensed consolidated financial statements
---	---

Amendment to IFRS 16: Covid 19-related rent concessions.

In May 2020, the IASB issued an amendment to IFRS 16 Leases which exempts lessees from assessing whether the rent concessions granted by lessors under COVID-19 are a modification to the lease contract, when three criteria are cumulatively met: i) the change in lease payments results in a revised fee for the lease that is substantially equal to, or less than, the fee immediately prior to the change; ii) any reduction in lease payments only affects payments due on or before June 30, 2021; and iii) there are no substantive changes to other lease terms and conditions. This amendment is applicable for annual reporting periods beginning on or after June 1, 2020, with early application permitted. The Group chose not to perform early application and does not expect to apply this practical expedient.

5 Property and Equipment

Movements in the carrying amount of property and equipment were as follows:


		****		****	Transportation		****
					equipment,
					office
			Technical		equipment	Right of use
			equipment and		and other	assets - Office
In thousands of	Buildings	****	machinery	****	equipment	and Warehouse	****	Total
Cost
Balance as of December 31, 2019	2,626	****	2,412	****	11,949	14,060	****	31,047
Additions	241		195		912	4,081		5,429
Disposals	(15)		(17)		(74)	—		(106)
Reclassification	72		(95)		23	—		—
Effect of translation	(204)		(136)		(788)	(1,132)		(2,260)
Balance as of September 30, 2020	2,720	****	2,359	****	12,022	17,009	****	34,110
Accumulated depreciation
Balance as of December 31, 2019	(1,329)	****	(1,108)	****	(6,887)	(4,289)	****	(13,613)
Depreciation charge	(482)		(376)		(1,849)	(3,399)		(6,106)
Accumulated depreciation on disposals	15		17		74	—		106
Effect of translation	105		85		507	315		1,012
Balance as of September 30, 2020	(1,691)	****	(1,382)	****	(8,155)	(7,373)	****	(18,601)
Carrying amount as of December 31, 2019	1,297		1,304		5,062	9,771	****	17,434
Carrying amount as of September 30, 2020	1,029		977		3,867	9,636	****	15,509

All values are in Euros.

During the nine months ended on September 30, 2020, the Group’s main additions on Right of use assets include new lease contracts for an office in Egypt, Nigeria and Portugal and a warehouse facility in Egypt.

6 Inventories

Inventories are comprised of the following:


	As of
In thousands of	September 30, 2020	****	December 31, 2019
Merchandise available for sale	9,103		11,176
Less: Provision for slow moving and obsolete inventories	(1,415)		(1,180)
Total Inventories	7,688	****	9,996

All values are in Euros.

The total cost of inventory recognized as an expense, under the caption cost of revenue, in the interim consolidated profit or loss for the three months ended September 30, 2020 was EUR 10,425 thousand (September 30, 2019: 21,937).

The total cost of inventory recognized as an expense in the interim consolidated profit or loss for the nine months ended September 30, 2020 was EUR 32,952 thousand (September 30, 2019: 60,066).

Provision for slow moving and obsolete inventories

The total net provision for slow moving and obsolete inventories recognized as an expense in the interim consolidated profit or loss for the three months ended September 30, 2020 was EUR 208 thousand (September 30, 2019: 374).

The total net provision for slow moving and obsolete inventories recognized as an expense, under the caption cost of revenue, in the interim consolidated profit or loss for the nine months ended September 30, 2020 was EUR 600 thousand (September 30, 2019: 727). 9

7 Cash and cash equivalents

Cash and cash equivalents comprised the following:


	As of
In thousands of EUR	September 30, 2020	****	December 31, 2019
Cash at bank and in hand	147,149		52,729
Short-term deposits	—		117,292
Total Cash and cash equivalents	147,149		170,021

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

Cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified expected credit loss as of September 30, 2020 was EUR 223 thousand (December 31, 2019: nil).

8 Term Deposits

Term deposits comprised the following:


	As of
	September 30, 2020	****	December 31, 2019
Short term deposits - banks	653		62,418
Short term deposits - others	386		—
Term Deposits	1,039		62,418

Short-term deposits in banks represent interest bearing deposit with a commercial bank for a fixed period of more than 3 months.

The Group has pledged short-term guarantee deposits with its commercial vendors. At September 30, 2020, the fair value of the short-term guarantee deposits pledged were EUR 386 thousand (December 31, 2019: nil).

9 Trade and other receivables

Trade and other receivables were comprised of the following:


			As of
In thousands of	Note	****	September 30, 2020	****	December 31, 2019
Advances to suppliers			1,096		2,356
Trade notes and accounts receivable			13,133		17,780
Less: Allowance for impairment of trade notes and accounts receivable			(7,506)		(8,283)
Unbilled revenues			1,164		858
Other receivables			2,865		4,728
Less: Allowance for impairment of other receivables			(682)		(503)
Trade and other receivables		****	10,070	****	16,936

All values are in Euros.

Allowance for expected credit losses

The movement of allowance for expected credit losses (“ECL”) of trade notes and accounts receivables and other receivables (including related parties) is as follows:


	ECL of trade notes	****
	and accounts		ECL of other
In thousands of	receivable	****	receivables
Balance as of December 31, 2019	8,283	****	503
Additions	3,589		268
Reversal	(279)		(40)
Use of provision	(3,515)		—
Effect of translation	(572)		(49)
Balance as of September 30, 2020	7,506	****	682

All values are in Euros.

The ageing analysis of trade notes and accounts receivables is as follows:


									Past due but not impaired
		****		****	Total	****	Neither past	****		****		****
			Total		expected		due nor		< 30		30 - 90		>90
In thousands of	Total net	****	gross	****	credit losses	****	impaired	****	days	****	days	****	days
As of September 30, 2020	5,627		13,133		(7,506)		795		2,789		722		1,321
As of December 31, 2019	9,497		17,780		(8,283)		3,291		1,554		2,515		2,137

All values are in Euros.

10 Prepaid expenses

As of September 30, 2020, prepaid expenses were comprised of prepaid server hosting fees and software licenses amounting to EUR 2,353 thousand (December 31, 2019: 7,788), prepaid insurance amounting to EUR 1,814 thousand (December 31, 2019: 843), advance payments to the Group’s online payment services amounting to EUR 734 thousand (December 31, 2019: 2,168) and prepaid short-term leases and other goods and services amounting to EUR 1,094 thousand (December 31, 2019: 1,794).

11 Share capital and share premium

Ordinary shares issued and fully paid as at September 30, 2020


Number of shares	****	Class	****	Par value()	Share capital (in thousands of )	Share premium(in thousands of EUR)	Total
162,161,928		Ordinary		1	162,162	1,018,276	1,180,438
Total	****		****	1	162,162	1,018,276	1,180,438

All values are in Euros.

Ordinary shares issued and fully paid as at December 31, 2019


Number of shares	****	Class	****	Par value()	Share capital (in thousands of )	Share premium(in thousands of EUR)	Total
156,816,494		Ordinary		1	156,816	1,018,276	1,175,092
Total	****		****	1	156,816	1,018,276	1,175,092

All values are in Euros.

The total authorized number of ordinary shares is 162,161,928 shares as at September 30, 2020 (December 31, 2019: 156,816,494 shares) with a par value of EUR 1.00 per share. All issued ordinary shares are fully paid. Each ordinary share carries one vote.

During the nine months ended September 30, 2020, 5,345,434 shares were issued, with nominal value of EUR 1 each. Share capital was issued to the beneficiaries of the virtual participation program for exercise of their stock options. 11

For the nine months ended September 30, 2020, the total settlement of claims related to the share-based payment compensation amounts to EUR 4,775 thousand and it is presented as a decrease to other reserves in the interim consolidated statement of changes in equity (Note 12). Out of the share capital increase 4,759,452 shares were issued with an exercise price of 0.12 EUR per share representing the net capital contribution received of EUR 571 thousand, during the period. Related transaction costs of EUR 201 thousand were recognized directly in the accumulated losses.

12 Other Reserves


		Exchange
		difference on
		net investment		Currency		Total
	Capital	in foreign		translation		other
In thousands of	reserves	operations	****	adjustment	****	reserves
As of December 31, 2019	113,395	(69,464)		60,183	****	104,114
Other comprehensive loss		(49,041)		47,936		(1,105)
Total comprehensive loss for the period	—	(49,041)		47,936	****	(1,105)
Share-based payments (Note 13)	10,542					10,542
Exercise of options (Note 11)	(4,775)					(4,775)
Change in Non-controlling interests						—
As of September 30, 2020	119,162	(118,505)		108,119	****	108,776

All values are in Euros.

Exercise of options corresponds to the total settlement of claims related to the share-based payment options, for the nine months ended September 30, 2020, as described in Note 11.

13 Share-based compensation

New share-based payment plans granted during 2020

Stock Option Program 2020

Our shareholders approved the Stock Option Program 2020 (the “2020 Plan”) at our 2020 Annual General Meeting. Jumia granted an individual number of stock options to beneficiaries under the terms and conditions of the SOP 2020.

Each stock option entitles the holder to receive one share of Jumia (or 0.5 ADS as 1 ADS represent 2 shares of Jumia). The option can be exercised after a waiting period (starting from May 15, 2020, the contract date of the individual agreement) of four years at a price which is determined based on the average share price of the last 60 trading days prior to the contract date. The exercise period starts directly after the waiting period and ends two years following the expiry of the waiting period. The exercise of stock options is prohibited during defined blackout periods.

Jumia is entitled to elect, at its sole discretion, a cash payment for each vested stock option instead of issuing one share.

The stock options can only be exercised, if the average annual growth rate of the Gross Merchandise Volume amounts to at least 10% during the four years waiting period. If this performance target is not met, all options will lapse.

Moreover, there is a second condition (only) for a part of the stock options granted to certain members of senior management: The Adjusted EBITDA must be positive for two consecutive quarters by 31 March 2023. If this condition is met for one or more Big Countries (Egypt, Ivory Coast, Kenya, Morocco and Nigeria) or Small Countries (Algeria, Ghana, Senegal, South Africa, Tunisia and Uganda), an individual number of options will vest (if and to the extent of the satisfaction of the other vesting requirements set out in the terms and conditions) for each country for that the condition is met. A satisfaction of the condition for a Big Country will result in a vesting of a greater number of stock options than a satisfaction of the condition for a Small Country. 12

The stock options are subject to vesting requirements.

The stock options shall generally vest in two tranches. Two-thirds of the granted stock options shall vest after two years after grant date. The remaining one-third of the granted stock options shall vest after three years after grant date.

Beneficiaries who are members of the management board will forfeit the right to exercise their options if they resign and start working for a competitor within the next 6 months after the resignation.

Other beneficiaries will keep all stock options that are vested.

If Jumia pays dividends during the waiting period or exercise period, the beneficiaries are entitled to receive a dividend payment for each vested but not yet exercised stock option. However, Jumia does not expect to pay dividends during the next years.

The company is accounting for the stock options of the SOP 2020 as an equity settled plan. For equity-settled awards, the expenses to be recognized are determined based on the grant date fair value of the awards.

The fair values of the SOP 2020 are derived from the Black-Scholes-Merton model with the following inputs:


	****	SOP 2020	****
Fair value per ADS^(1)^		USD 6.48
Exercise price per ADS		USD 3.67
Risk-free interest rate^(2)^		0.26	%
Expected dividend yield^(3)^		0	%
Expected life (years)^(4)^		4 years
Expected volatility^(5)^		50	%
Weighted average of Fair value of Options		EUR 1.26

(1)	The Fair value per ADS is derived based on the value per ADS of Jumia traded on the New York Stock Exchange converted into Euro.
(2)	Risk-free interest rate is based on US government bond yields consistent to the expected life of options.
---	---
(3)	Expected dividend yield is assumed to be 0% based on the fact that the Group has no history or expectation of paying a dividend
---	---
(4)	Expected life of share options is based on the waiting period of four years.
---	---
(5)	Expected volatility is assumed based on the historical volatility of the Group’s comparable companies in the period equal to the expected life of each grant.
---	---

Non-vesting conditions were considered in the determination of the fair value of the options.

As each stock option entitles the holder to receive one share of Jumia, the Fair value per ADS and the exercise price per ADS have to be divided by 2 in order to derive the value per option.

For the 2020 Plan, Jumia recognized expenses of EUR 534 thousand for the three months ended September 30, 2020 and EUR 637 thousand for the nine months ended September 30, 2020.

Virtual Restricted Stock Unit Program 2020

Our shareholders also approved the Virtual Restricted Stock Unit Program 2020 (the “2020 VRSUP”) at our 2020 Annual General Meeting. Jumia granted an individual number of virtual restricted stock units (“VRSUs”) to beneficiaries under the terms and conditions of the 2020 VRSUP.

Grants are based on individual grant agreements. 13

Each beneficiary received an individual grant agreement that includes the individual number of VRSUs. Each VRSU entitles the holder to receive a cash payment equal to the ten trading day average share price after the publication by the Company of the later of its last half year report or its last annual financial statements.

For selected employees of the company (i.e. Group 2) and selected employees of affiliated companies (i.e. Group 4), Jumia is entitled to elect, at its sole discretion, to issue one share for each vested VRSU instead of a settlement in cash.

In general, the VRSUs shall vest one year after the grant and will be paid out as soon as reasonably practicable following the expiration of a period of twelve trading days after the publication of Jumia’s first half year report or annual financial statements after the vesting date. All VRSUs will be forfeited if a beneficiary resigns before the payout.

The RSUs for all beneficiaries are not subject to any performance conditions or a maximum payout amount (Cap).

The VRSUP 2020 is recognized as a cash-settled plan for certain beneficiaries (e.g. members of the management board) and as an equity-settled plan for all other beneficiaries. For cash-settled awards, the expenses are determined on the fair value of the awards at each reporting date. For equity-settled awards, the expenses to be recognized are determined based on the grant date fair value of the awards.

The fair value per VRSU was derived based on the observable stock price of Jumia as at the grant date or the reporting date depending on the cash- or equity-settled classification. The weighted average fair value per VRSU amounts to EUR 3.20.

For the cash-settled part of the 2020 VRSUP, Jumia recognized expenses of EUR 979 thousand for the three months ended September 30, 2020 and EUR 1,286 thousand for the nine months ended September 30, 2020. For the equity-settled part of the 2020 VRSUP, Jumia recognized expenses of EUR 532 thousand for the three months ended September 30, 2020 and EUR 682 thousand for the nine months ended September 30, 2020.

Other existing plans

For the other existing plans, Jumia recognized expenses of EUR 1,373 thousand for the three months ended September 30, 2020 and EUR 9,392 thousand for the nine months ended September 30, 2020 (For the three months ended September 30, 2019: 7,100; For the nine months ended September 30, 2019: 31,934).

14 Trade and other payables

Trade and other payables comprise the following:


			As of
In thousands of	Note	****	September 30, 2020	****	December 31, 2019
Trade payables			16,924		15,762
Invoices not yet received			19,509		19,292
Accrued employee benefit costs			8,159		7,943
Sundry accruals			7,813		13,441
Trade and Other Payables		****	52,405	****	56,438

All values are in Euros.

Invoices not yet received include a litigation settlement accrual of EUR 4,265 thousand (USD 5,000 thousand). As previously disclosed, several putative class action lawsuits were filed in the U.S. District Court for the Southern District of New York and the New York County Supreme Court against us and other defendants, including current and former members of our supervisory and management boards. The cases assert claims under federal securities laws based on alleged misstatements and omissions in connection with, and following, our initial public offering. On August 11, 2020, we reached an agreement to fully resolve all of the actions, subject to standard conditions including court approval. Under this agreement, in which the defendants do not admit any liability or wrongdoing, Jumia will make a settlement payment of USD 5,000 thousand, USD 1,000 thousand of which will be funded by insurance coverage. 14

Sundry accruals relate principally to consultancy, legal, marketing, IT and logistics services payables.

15 Borrowings ****

Lease liabilities are presented in the statement of financial position as follows:


	As of
In thousands of EUR	September 30, 2020	December 31, 2019
Current	2,573	3,056
Non-current	6,786	6,127
Total Lease liabilities	9,359	9,183

Set out below is the maturity of the lease liabilities classified as non-current as of September 30, 2020:


In thousands of EUR		One to five years		More than five years		Total
Lease liability future payments		6,501		285		6,786

The Group has several lease contracts that include extension and termination options. Whenever the contracts do not include a mutual agreement clause, the extension options attributed to the Group are assumed to be exercised and, therefore, are included in the lease terms considered when measuring our lease liabilities.

Changes in liabilities arising from financing activities


In thousands of	December 31, 2019	****	Additions	****	Payments	****	Reclassification	****	Effect of translation	****	September 30, 2020
Current lease liabilities	3,056		2,453		(4,031)		1,256		(161)		2,573
Non-current lease liabilities	6,127		2,584				(1,256)		(669)		6,786
Total liabilities from financing activities	9,183		5,037		(4,031)		—		(830)		9,359

All values are in Euros.

Additions include EUR 1,026 thousand of accrued interest.

16 Provisions for liabilities and other charges

Movements in provisions for liabilities and other charges are as follows:


			Marketplace
		****	and consignment	Provision for	****
In thousands of	Tax risks	****	goods	other expenses	****	Total
Balance as of December 31, 2019	25,840	****	549	877	****	27,266
Additions	3,169		497	928		4,594
Reversals	(170)		(219)	(178)		(567)
Use of provision	—		—	—		—
Effect of translation	(256)		(29)	(70)		(355)
Balance as of September 30, 2020	28,583	****	798	1,557	****	30,938
Current	28,583		798	1,249		30,630
Non-current	—		—	308		308

All values are in Euros.

Tax risks

As of September 30, 2020, tax risk provision includes provisions related to VAT for EUR 10,398 thousand (December 31, 2019: 10,344), provisions related to Withholding Tax (WHT) for EUR 18,091 thousand (December 31, 15

2019: 15,399) and provisions related to other taxes for EUR 95 thousand (December 31, 2019: 97). Provision is calculated based on the detailed review of uncertain tax positions completed by management across the group and in consideration of the probability of a liability arising, within the applicable statute of limitations.

Marketplace and consignment goods

The provision for marketplace and consignment goods relates to the lost and damaged items, to be reimbursed to the vendors. Provision is calculated based on the detailed review of these items, and it is expected to be utilized during the next 12 months.

Provision for other expenses

Provision for other expenses comprise of litigations and provisions related to employees, vendors, customers and other parties. The provisions are calculated based on our best estimate considering past experience.

17 Revenue

Revenue is comprised of the following:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of	2020	2019	2020	2019
Sales of goods	9,792	20,981	30,683	58,121
Commissions	8,706	6,080	24,687	16,617
Fulfillment	8,267	7,313	22,348	18,001
Value added services	4,901	4,729	14,367	14,042
Marketing and Advertising	1,521	1,556	4,698	3,771
Other revenue	485	258	1,080	580
Revenue	33,672	40,916	97,863	111,132	****

All values are in Euros.

As previously disclosed in the annual consolidated financial statements, the Group had one operating and reportable segment, an e-Commerce platform. Although the e-Commerce platform consists of different business platforms of the Group, the chief operating decision-maker, comprised of two Co-CEO’s and the CFO, makes decisions regarding allocation of resources based on the long-term growth potential of the Company as determined by market research, growth and potential in regions, and various internal key performance indicators.

For the nine months ended September 30, 2020, no customer amounted for more than 5% of Group revenues (September 30, 2019: nil).

The Group’s geographical distribution of revenue was as follows:


	For the three months ended		For the nine months ended
Revenue	September 30,		September 30,
in thousands of	2020	2019	2020	2019
West Africa(1)	15,138	17,467	44,589	47,310
North Africa(2)	11,398	13,887	34,092	40,214
East and South Africa(3)	6,853	8,571	18,489	22,610
Europe	177	991	579	998
United Arab Emirates	106	—	114	—
Total	33,672	40,916	97,863	111,132

All values are in Euros.

(1) West Africa covers Nigeria, Ivory Coast, Senegal, Cameroon and Ghana.

(2) North Africa covers Egypt, Tunisia, Morocco and Algeria.

(3) East and South Africa covers Kenya, Tanzania, Uganda, Rwanda and South Africa. 16

The variation registered in the Group’s revenue for the three and nine months ended on September 30, 2020 was mainly driven by our marketplace gaining more depth, which positioned us to undertake fewer sales on a first party basis.

18 Fulfillment expense

Fulfillment expense is comprised of the following:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of	2020	2019	2020	2019
Fulfillment staff costs	4,109	5,234	12,977	14,957
Fulfillment centers expense	731	1,168	2,564	3,366
Freight and shipping expense	11,783	14,305	34,277	35,189
Fulfillment expense	16,623	20,707	49,818	53,512

All values are in Euros.

For the three and nine months ended on September 30, 2020, the Group’s fulfillment expense has decreased primarily due to a number of operational enhancements across our logistics operations. These enhancements included a change in our volume pricing model from cost per package to cost per stop, improvements in our cross-border shipping matrix alongside staff costs savings in our fulfillment centers.

19 Sales and advertising expense

Sales and advertising expense is comprised of the following:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of EUR	2020	2019	2020	2019
Sales and advertising staff costs	1,955	1,950	6,548	5,763
Sales and advertising campaigns	4,235	11,825	15,736	34,766
Sales and advertising expense	6,190	13,775	22,284	40,529

The reduction registered in the Sales and advertising expense for the three and nine months ended on September 30, 2020, is primarily due to continued enhancements to our performance marketing strategy across search and social media channels, including through more granular segmentation of our target market with differentiated campaigns and content for each segment.

20 Technology and content expense

Technology and content expense is comprised of the following:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of	2020	2019	2020	2019
Staff Costs - Technology and content	3,197	3,157	10,018	9,562
Technology license and maintenance expenses	3,115	3,827	10,522	9,982
Technology and content expense	6,312	6,984	20,540	19,544

All values are in Euros.

21 General and administrative expense

General and administrative expense is comprised of the following:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of	2020	2019	2020	2019
Staff Costs	12,057	16,870	40,366	63,941
Occupancy Costs	409	406	1,062	1,219
Professional fees	2,546	4,559	9,027	9,035
Travel and entertainment	210	1,306	1,244	3,784
Office and related expenses	1,491	1,877	4,775	5,258
General sub-contracts	76	1,261	1,267	3,174
Bank fees & payment costs	437	327	1,249	2,009
Bad debt expense / reversal	508	586	3,761	2,635
Tax expenses	1,737	1,344	5,485	4,409
Tax provisions	946	1,703	3,169	3,009
Provisions for liabilities and other charges	107	(210)	558	29
Depreciation and amortization	1,878	2,095	6,106	5,568
Other general and administrative expense	322	536	6,117	1,255
General and administrative expense	22,724	32,660	84,186	105,325

All values are in Euros.

For the nine months ended September 30, 2020, staff costs expense includes share options granted to eligible employees of EUR 11,998 thousand (September 30, 2019: 31,934).

For the nine months ended September 30, 2020 Other general and administrative expense includes EUR 4,265 thousand for the class action settlement described in Note 14, and EUR 2,021 thousand (September 30, 2019: 1,091) for insurance premiums.

22 Income tax

Income tax expense is comprised of the following:


	For the three months ended				For the nine months ended
	September 30,				September 30,
In thousands of	2020	****	2019	****	2020	****	2019
Current tax	793		(208)		1,387		53
Total Income tax (benefit) / expense	793		(208)		1,387		53

All values are in Euros.

In Nigeria, the Finance law of 2019 came into effect resulting, for the nine months ended September 30, 2020, in a minimum income tax expense of EUR 285 thousand (September 30, 2019: nil).

Income tax payables comprise the following:


	As of	As of
	September 30, 2020	December 31, 2019
Income Tax Payables	355	400
Provision for Income Tax	9,890	9,656
Total	10,245	10,056

23 Earnings per share

The following table reflects the loss and share data used in the basic and diluted EPS calculations:


	For the three months ended		For the nine months ended
	September 30,		September 30,
In thousands of EUR	2020	2019	2020	2019
Numerator
Loss for the period	(32,386)	(49,910)	(114,027)	(163,474)
Less: net loss attributable to non-controlling interest	(63)	(93)	(182)	(246)
Loss attributable to Equity of the Company	(32,323)	(49,817)	(113,845)	(163,228)
Denominator
Weighted average number of shares for basic and diluted EPS	161,038,010	156,816,494	158,281,076	135,209,568

Loss per share - basic and diluted	(0.20)	(0.32)	(0.72)	(1.21)

The weighted average of potential shares for the year to date that would arise from securities that were not included in the diluted earnings per share calculation, as they would be anti-dilutive, are as follows:


		For the three months ended				For the nine months ended
		September 30,				September 30,
	****	2020	****	2019	****	2020	****	2019
Share Options		7,921,745		8,824,566		5,433,252		7,834,683

In August 2020, 54,724 stock options were exercised, which will increase the share capital of the Company by 54,724 shares. The capital increase is conducted in October 2020. Additionally, 236,658 shares are issued in October 2020 to settle beneficiaries of legacy participation programs of the Company. There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorization of these financial statements.

24 Transactions and balances with related parties

Transactions with MTN

Our shareholder Mobile Telephone Networks Holdings (Pty) Ltd sold a significant number of shares in Jumia, during the third quarter of 2020, and no longer qualifies as a related party, as of September 30, 2020.

The Group engages in several initiatives with affiliates of MTN. For example, consumers may pay for transactions on Jumia’s platform with MTN’s mobile money. The Group has also set up dedicated MTN branded online stores on our platform. For the nine months ended September 30, 2020, the expenses incurred with MTN amounted to EUR 220 thousand (September 30, 2019: 438). For the three months ended September 30, 2020, the expenses incurred with MTN amounted to EUR 84 thousand (September 30, 2019: 159).

In 2020, the Group also entered into an agreement in which MTN prepaid for corporate and gift purchases in Jumia’s platform through vouchers, which amounted for the nine months ended September 30, 2020 to EUR 961 thousand (for the three months ended September 30, 2020: 221), from which EUR 864 thousand have been converted into revenue during the period. In 2019, MTN prepaid for their employees purchases in Jumia’s platform through the wallet top-ups which amounted for the nine months ended September 30, 2019 to EUR 524 thousand (for the three months ended September 30, 2019: 35), which have all been converted into revenue during the period. 19

Transactions with Key management

Key management includes the senior executives. The compensation paid or payable to key management for employee services is shown below:


	For the three months ended				For the nine months ended
In thousands of	September 30, 2020	****	September 30, 2019	****	September 30, 2020	****	September 30, 2019
Short-term employee benefits	714		4,576		2,447		6,035
Other benefits	7		(25)		15		24
Share-based compensation	1,222		2,113		4,316		9,305
Total	1,943		6,664	****	6,778		15,364

All values are in Euros.

25 Fair Values of Financial Instruments

Management considers that the carrying amounts of financial assets and financial liabilities in the financial statements approximate their fair values.

As of September 30, 2020 and December 31, 2019, the Group does not own assets and liabilities measured at fair value through profit or loss or assets at fair value through comprehensive income in accordance with IFRS 9.

26 Financial risk management

Market risk

Foreign currency risk

Intercompany loans bear the majority of the Group’s foreign currency risk as they are issued and are repayable in Euro or US dollars. Fluctuation of various exchange rates in Africa and the resulting related foreign exchange gains or losses are recognized in other comprehensive income.

Credit risk

Trade receivables

As of September 30, 2020, the Group has as an allowance for uncollectible receivables of EUR 7,506 thousand (December 31, 2019: 8,283) as set out in the Note 9. Additionally, the Group has as an allowance for uncollectible other receivables of EUR 682 thousand (December 31, 2019: 503). The ECL provision for uncollectible receivables represents 57% (December 31, 2019: 47%) of the total trade and other receivables.

Cash deposits

As of September 30, 2020, the impact of measuring ECL for cash and cash equivalents remains immaterial in the consolidated financial statements.

The majority of the Group’s cash deposit balances are maintained in Germany. German bank accounts are secured via the deposit protection fund, which secures all bank deposits up to 20% of the liable equity of the bank.

Liquidity risk

As all funds come exclusively from the shareholders and there are no external borrowings, the Group mitigates the risk of interest. 20

Based on the cash flow forecast for 2021, the Group has sufficient liquidity as of September 30, 2020 for the next twelve months.

27 Commitments and contingencies

Tax contingencies

The Group has contingent liabilities related to potential tax claims arising in the ordinary course of business.

As of September 30, 2020, there are ongoing tax audits in various countries. Some of these tax enquiries have resulted in re-assessments, whilst others are still at an early stage and no re-assessment has yet been raised. Management is required to make estimates and judgments about the ultimate outcome of these investigations or litigations in determining legal provisions. Final claims or court rulings may differ from management estimates.

As of September 30, 2020, the Group has accrued for net tax provisions (excluding Uncertainty over Income Tax reported within Income Tax payables in accordance with IFRC 23 interpretation) in the amount of EUR 28,583 thousand (2019: 25,840) as a result of the assessment of potential exposures due to uncertain non income tax positions as well as pending and resolved matters with the relevant tax authorities (Note 16).

In addition to the above tax risks, in common with other international groups, the conflict between the Group’s international operating model, the jurisdictional approach of tax authorities and some domestic tax requirements in relation to withholding tax and VAT compliance and recoverability rules, could lead to a further EUR 8,925 thousand in additional uncertainty on tax positions. The likelihood of future economic outflows with regard to these potential tax claims is however considered as only possible, but not probable. Accordingly, no provision for a liability has been made in these consolidated financial statements.

The Group may also be subject to other tax claims for which the risk of future economic outflows is currently evaluated to be remote

Legal Proceedings with shareholders

Since May 2019, several putative class action lawsuits have been filed against the company, certain of its management and supervisory board members, the underwriters of its IPO, and its U.S. representative in the U.S. District Court for the Southern District of New York and the New York County Supreme Court. The cases assert claims under federal securities laws based on alleged misstatements and omissions in connection with, and following, the company’s initial public offering. On August 11, 2020, the parties reached an agreement to fully resolve all of the actions, subject to court approval. Under the agreement, in which the defendants do not admit any liability or wrongdoing, the company will make a settlement payment of $5 million, $1 million of which will be funded by insurance coverage. On October 9, 2020, the plaintiffs moved for preliminary court approval of the proposed settlements.

28 Subsequent events

Management has not identified events occurred after September 30, 2020, for which, due to their materiality, additional disclosure in the Notes to the unaudited interim condensed financial statements is required. 21

Exhibit 99.3

MANAGEMENT ’ S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations. We recommend that you read this discussion together with our unaudited condensed consolidated financial statements, including the notes thereto, as of and for the three and nine months ended September 30, 2020 and 2019 included as Exhibit 99.2 to the Report on Form 6-K dated November 10, 2020 to which this discussion is attached as Exhibit 99.3. We also recommend that you read our operating and financial review and prospects and our audited consolidated financial statements for 2019, 2018 and 2017, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2019 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”). In addition, we recommend that you read any public announcements made by Jumia Technologies AG.

The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which may differ in material respects from generally accepted accounting principles in the United States and other jurisdictions. We maintain our books and records in euros. Unless otherwise indicated, all references to currency amounts in this discussion are in euros. We have made rounding adjustments to some of the figures included in this discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.

The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under Item 3. “Key Information—D. Risk Factors” in our Annual Report.

Unless otherwise indicated or the context otherwise requires, all references to “Jumia” or the “company,” “we,” “our,” “ours,” “us” or similar terms refer to Jumia Technologies AG and its consolidated subsidiaries.

Overview

We are the leading pan-African e-commerce platform. Our platform consists of our marketplace, which connects sellers with consumers, our logistics service, which enables the shipment and delivery of packages from sellers to consumers, and our payment service, JumiaPay, which facilitates transactions among participants active on our platform in selected markets.

On our marketplace, a large and diverse group of sellers offer goods across a wide range of categories, such as fashion and apparel, beauty and personal care, home and living, fast moving consumer goods, smartphones and other electronics. We also provide consumers with easy access to a range of on-demand services via our Jumia Food platform, including delivery from restaurants, grocery shops and other convenience outlets. On our JumiaPay app, we offer a number of digital lifestyle services including utility bills payment, airtime recharge, gaming and entertainment, transport ticketing as well as financial services such as micro-loans or savings products. We had 6.7 million Annual Active Consumers as of September 30, 2020. We believe that the number and quality of sellers on our marketplace, and the breadth of their respective offerings, attract more consumers to our platform, increasing traffic and orders, which in turn attracts even more sellers to Jumia, creating powerful network effects. Our marketplace operates with limited inventory risk, as the goods sold via our marketplace are predominantly sold by third-party sellers, meaning the cost and risk of inventory remains with the seller. In the nine months ended September 30, 2020, the vast majority of the items sold on our marketplace was offered by third-party sellers. To a limited extend, we sell items directly in order to enhance consumer experience in key categories and regions.

Our logistics service, Jumia Logistics, facilitates the delivery of goods in a convenient and reliable way. It consists of a network of over 20 leased warehouses, a total of 1,300 drop-off locations for sellers and pick up stations for consumers and almost 300 third-party logistics service providers, whom we integrate and manage through our proprietary technology, data and processes. In certain cities, where we believe it is beneficial to enhance our logistics service, we also operate our own last-mile delivery fleet.

Traditionally, consumers across Africa rely on cash to transact. We have designed our payment service, JumiaPay, to facilitate online transactions between participants on our platform, with the intention of integrating additional financial services in the future. JumiaPay encompasses a number of functionalities. It functions as a wallet that can be linked to the consumer’s preferred payment method, including debit or credit cards, bank accounts, third party mobile money wallets and many more. JumiaPay also provides digital payment processing on our platform allowing for a fast and secure payment experience at checkout. JumiaPay has also a dedicated payment app, the JumiaPay app, through which we offer consumers a number of digital lifestyle services from a broad range of third party service providers. Lastly, through Jumia Lending, which forms part of JumiaPay, our sellers can access financing solutions 1

provided by third-party financial institutions, leveraging data from the sellers transactional activity on our platform for credit scoring purposes. We intend to continue expanding the range of payment and financial services offered to both consumers and sellers as part of the Jumia ecosystem, with a view to offering those services beyond our platform in the future.

As of September 30, 2020, JumiaPay was available in eight markets: Nigeria, Egypt, Morocco, Ivory Coast, Ghana, Kenya, Tunisia and Uganda. JumiaPay Transactions and Total Payment Volume (“TPV”) have both increased substantially since its launch. The number of JumiaPay Transactions reached 7.6 million in 2019, more than tripling compared to 2018. In the nine months ended September 30, 2020, we recorded 6.9 million JumiaPay Transactions compared to 5.2 million in the nine months ended September 30, 2019. TPV reached €124.3 million in 2019, up 127.0% compared to 2018. TPV in the nine months ended September 30, 2020 was €137.1 million, up 74.3% from €78.7 million in the nine months ended September 30, 2019.

While usage of our platform has grown substantially in the past, we consider usage as a part of a broader equation where we seek to balance usage growth, platform monetization and cost efficiency. We manage this equation on a dynamic basis. In the nine months ended September 30, 2020, we focused on rebalancing our business mix, enhancing cost efficiency and making progress towards breakeven. Annual Active Consumers increased to 6.7 million Annual Active Consumers as of September 30, 2020, up from 5.5 million Annual Active Consumers as of September 30, 2019. Our Orders increased from 18.3 million in the nine months ended September 30, 2019 to 19.8 million in the nine months ended September 30, 2020. Our gross merchandise value (“GMV”) decreased from €738.1 million in the nine months ended September 30, 2019 to €605.3 million in the nine months ended September 30, 2020. Our gross profit continued to increase, reaching €64.9 million in the nine months ended September 30, 2020, up from €51.1 million in the nine months ended September 30, 2019. The rebalancing of our business mix together with structural improvements to enhance cost efficiency resulted in a significant improvement of our unit economics. The increase in gross profit and improvement in unit economics resulted in a significant decrease in our operating loss for the period from €166.8 million in the nine months ended September 30, 2019 to €109.3 million in the nine months ended September 30, 2020.

Key Performance Indicators

The following table sets forth our marketplace key performance indicators as of and for the nine months ended September 30, 2019 and September 30, 2020. For definitions and explanations of our key performance indicators, please see “Non-IFRS and Other Financial and Operating Metrics” below.


		As of and for the nine months ended
		September 30,
	****	2019		****	2020		****
		(unaudited, in millions)
Annual Active Consumers			5.5			6.7
Orders			18.3			19.8
GMV		€	738.1	^(1)^	€	605.3	^(1)^
Adjusted EBITDA^(2)^		€	(129.3)		€	(91.2)

(1)	Adjusted for perimeter changes and improper sales practices. Adjusted for perimeter changes relate to the exit from Cameroon, Rwanda, Tanzania and our travel activities. For more information, see “Quarterly Data” below.
(2)	See “Non-IFRS and Other Financial and Operating Metrics” for a reconciliation of Adjusted EBITDA, which is a non-IFRS measure, to the most directly comparable IFRS financial performance measure and an explanation of why we consider Adjusted EBITDA useful.
---	---

Annual Active Consumers increased by 22.8% from 5.5 million as of September 30, 2019 to 6.7 million as of September 30, 2020 as we continued focusing on both acquisition of new consumers and re-engagement of existing consumers.

Orders increased by 8.6% from 18.3 million orders in the nine months ended September 30, 2019 to 19.8 million in the nine months ended September 30, 2020 while Sales & Advertising expense decreased by 45.0% over the same period. Orders on our physical goods e-commerce platform were supported by the growth in every-day product categories such as beauty and FMCG (fast moving consumer goods) as we increased our focus on these categories as part of our business mix rebalancing. Our food delivery platform, while affected by restaurant shutdowns as part of COVID-19 lockdown measures during the second quarter of 2020, recovered in the third quarter of 2020. Orders of digital services on our JumiaPay app showed robust momentum during the first half of 2020 while third quarter performance was negatively affected by reduced consumer incentives on airtime recharge transactions, which have historically been promotionally intensive.

GMV decreased by 18.0% from €738.1 million in the nine months ended September 30, 2019 to €605.3 million in the nine months ended September 30, 2020. This decrease was mainly due to a business mix rebalancing initiated in late 2019 to support our path to profitability. As part of this business mix rebalancing, we decreased promotional intensity and consumer incentives on lower consumer lifetime value business, while increasing our focus on every-day product categories to drive consumer adoption and usage. As of September 30, 2020, this rebalancing was largely completed as we reached a more diversified category mix where phones and electronics went from contributing 58.1% of GMV in the nine months ended September 30, 2019 to 43.8% in the nine months ended September 30, 2020.

We are making meaningful progress in the reduction of the overall rate of cancellations, failed deliveries and returns (“CFDR”) as we increase operational efficiency, including due to an increase in prepayment penetration. While actual rates of CFDR may vary from period to period, we observed a significant reduction in the CFDR ratio between the nine months ended September 30, 2019 and the nine months ended September 30, 2020.

●

The CFDR rate as a percentage of GMV decreased from 30.0% in the nine months ended September 30, 2019 to 25.4% in the nine months ended September 30, 2020. The CFDR rate as a percentage of orders decreased from 23.0% in the nine months ended September 30, 2019 to 15.5% in the nine months ended September 30, 2020. The CFDR rate is typically lower for orders than for GMV as higher average item value orders tend to show higher CFDR rates.

●

Trends of GMV after CFDR by category in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 showed growth concerning physical goods other than phones and electronics of 16.1%, growth of digital services offered on the JumiaPay app of 55.1%, growth of food delivery and other on-demand services of 37.2% and contraction of 37.5% in phones and electronics, as a result of the business mix rebalancing initiated in late 2019. Food delivery recovered in the third quarter of 2020, after being affected by COVID-19 related restaurant shutdowns during the second quarter of 2020.

●	Trends of orders after CFDR by category in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 showed 25.6% growth of physical goods other than phones and electronics, 41.9% growth of food delivery and other on-demand services, 9.5% growth of digital services offered on the JumiaPay app and 4% growth in phone and electronics.

The following table sets forth our JumiaPay key performance indicators as of or for the nine months ended September 30, 2019 and September 30, 2020. For definitions and explanations of our key performance indicators, please see “Non-IFRS and Other Financial and Operating Metrics” below.


	As of and for the nine months ended
	September 30,
	2019		****	2020
	(unaudited, in millions)
TPV	€	78.7		€	137.1
JumiaPay Transactions		5.2			6.9

TPV increased by 74.3% from €78.7 million in the nine months ended September 30, 2019 to €137.1 million in the nine months ended September 30, 2020. On-platform penetration of JumiaPay as a percentage of GMV increased from 10.7% in the nine months ended September 30, 2019 to 22.6% in the nine months ended September 30, 2020.

JumiaPay Transactions increased by 34.0% from 5.2 million in the nine months ended September 30, 2019 to 6.9 million in the nine months ended September 30, 2020. Overall, 35.1% of orders placed on the Jumia platform in the nine months ended September 30, 2020 were paid for using JumiaPay, compared to 28.4% in the nine months ended September 30, 2019.

COVID-19 Update

As an e-commerce company operating in Africa, we have so far been less affected, positively or negatively, by COVID-19 than many other companies. However, we experienced effects that varied in nature and intensity by country and evolved over time.

In the early part of the first quarter of 2020, factory shutdowns in China affected our cross-border business where we facilitate orders from international sellers in general and Chinese ones in particular. It also impacted some of our local sellers who rely on product imports from China, including phones and electronics. As work resumed in Chinese factories these disruptions eased gradually eased and their impact on the first quarter 2020 performance was not significant. 3

With the virus reaching Africa in March 2020, we started seeing local effects of the pandemic. We quickly adjusted our operations across our footprint to ensure the safety of our employees, customers and sellers, putting in place the relevant procedures and routines to operate according to the highest standards of safety and hygiene in accordance with WHO best practices and local guidelines. As a result, we experienced disruptions to our local logistic and supply disruption that persisted throughout the second quarter of 2020 with limited tailwinds from a demand standpoint at group level.

o	In Nigeria and South Africa, we faced significant disruption as a result of the imposed restrictions of movement that only started easing towards the end of the second quarter 2020. Our food delivery business, Jumia Food, was negatively impacted by restaurant shutdowns starting mid-March. Restaurants resumed normal operations in late May or early June in most cities where we operate the service.
o	Across the majority of our addressable market, we experienced no meaningful change in consumer behavior, aside from increased demand for essential and every-day products and reduced appetite for higher ticket size, discretionary purchases. The nature of lockdown measures put in place consisted mostly of localized restrictions of movement and partial curfews rather than nationwide lockdowns, resulting in less drastic changes in consumer lifestyles and behavior than all-encompassing, nationwide lockdowns. In selected countries, including in Morocco and Tunisia, where nationwide lockdowns were implemented, we experienced a temporary surge in volumes starting mid-March with sustained albeit decreasing momentum throughout the second quarter of 2020.
---	---
o	Across all geographies, we have seen increased demand from brands and sellers to join and expand their business on our platform as the COVID-19 crisis further established e-commerce as an important route to market.
---	---

In the third quarter of 2020, while the COVID-19 pandemic created economic challenges that negatively impacted consumer sentiment, it was not a primary driver of performance. Supply and logistics disruptions that we encountered in selected geographies and in our food delivery business in the first and second quarters of 2020 largely subsided in the third quarter.

However, the development of the virus remains a fluid situation and we expect it to drive continued macro and operating environment uncertainty.

Recent Developments

In Nigeria, protests against actions taken by a special police unit resurged in October 2020. These protests resulted in temporary disruption to our business in Nigeria. We also took the decision to halt operations on our platform completely for a full day in late October to honor those who died during the protests. While operations normalized in Nigeria in November 2020, the situation remains fluid and we expect continued volatility in usage.

Operating Results

Comparison of the Nine Months Ended September 30, 2019 and September 30, 2020

Consolidated Statement of Operations


		For the nine months ended September 30,
	****	2019	2020
		(unaudited, in millions)
Revenue		111.1	97.9
Cost of revenue		(60.1)	(33.0)
Gross profit		51.1	64.9
Fulfillment expense		(53.5)	(49.8)
Sales and advertising expense		(40.5)	(22.3)
Technology and content expense		(19.5)	(20.5)
General and administrative expense^(1)^		(105.3)	(84.2)
Other operating income		1.4	2.8
Other operating expense		(0.3)	(0.2)
Operating loss		(166.8)	(109.3)
Finance income		4.9	3.0
Finance costs		(1.6)	(6.3)
Loss before income tax		(163.4)	(112.6)
Income tax expense		(0.1)	(1.4)
Loss for the year		(163.5)	(114.0)

All values are in Euros.

(1)	Includes share-based payment expense of €31.9 million in the nine months ended September 30, 2019 and €12.0 million in the nine months ended September 30, 2020.

Revenue

The following table shows a breakdown of our revenue in the nine months ended September 30, 2019 and September 30, 2020 by source.


		For the nine months ended September 30,
	****	2019	2020
		(unaudited, in millions)
Marketplace revenue^(1)^		52.4	66.1
Commissions		16.6	24.7
Fulfillment		18.0	22.3
Marketing and advertising		3.8	4.7
Value-added services		14.0	14.4
First-party revenue^(2)^		58.1	30.7
Platform revenue^(3)^		110.6	96.8
Non-platform revenue^(4)^		0.6	1.1
Total revenue		111.1	97.9

All values are in Euros.

(1)	Marketplace revenue is the sum of commissions, fulfillment, marketing and advertising and value-added services.
(2)	First-party revenue is referred to as sales of goods shown in the notes to our audited consolidated financial statements.
---	---
(3)	Platform revenue is the sum of marketplace revenue and first-party revenue.
---	---
(4)	Non-platform revenue is referred to as other revenue shown in the notes to our audited consolidated financial statements.
---	---

Marketplace revenue increased by 26.1% from €52.4 million in the nine months ended September 30, 2019 to €66.1 million in the nine months ended September 30, 2020 due to an increase in revenue from commissions by 48.6% and an increase in revenue from fulfillment by 24.1% in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. Contributions from sales of goods, i.e., revenue from first-party sales, decreased by 47.2% from €58.1 million in the nine months ended September 30, 2019 to €30.7 million in the nine months ended September 30, 2020. This decrease was driven by our marketplace gaining more depth, which positioned us to undertake fewer sales on a first party basis. 5

Cost of Revenue

Cost of revenue decreased by 45.1% from €60.1 million in the nine months ended September 30, 2019 to €33.0 million in the nine months ended September 30, 2020, driven by the decrease in first-party sales. Cost of revenue primarily includes the purchase price of consumer products sold in first-party sales. Certain expenses associated with third-party sales, such as compensation paid to sellers for lost, damaged or late delivery items are also included in cost of revenue.

Gross Profit

Gross profit increased by 27.1% from €51.1 million in the nine months ended September 30, 2019 to €64.9 million in the nine months ended September 30, 2020 due to the increase in marketplace revenue.

Fulfillment Expense

Fulfillment expense decreased by 6.9% from €53.5 million in the nine months ended September 30, 2019 to €49.8 million in the nine months ended September 30, 2020, primarily due to a number of operational enhancements across our logistics operations. These enhancements included a change in our volume pricing model from cost per package to cost per stop, improvements in our cross-border shipping matrix alongside staff cost savings in our fulfillment centers. Gross profit after fulfillment expense changed from negative €2.4 million in the nine months ended September 30, 2019 to positive €15.1 million in the nine months ended September 30, 2020, demonstrating our progress with respect to unit economics.

Sales and Advertising Expense

Sales and advertising expense decreased by 45.0% from €40.5 million in the nine months ended September 30, 2019 to €22.3 million in the nine months ended September 30, 2020, primarily due to continued enhancements to our performance marketing strategy across search and social media channels, including through more granular segmentation of our target market with differentiated campaigns and content for each segment. These efforts resulted in gross profit less fulfillment expense and sales and advertising expense turning positive in the third quarter of 2020 for the first time.

Technology and Content Expense

Technology and content expense increased by 5.1% from €19.5 million in the nine months ended September 30, 2019 to €20.5 million in the nine months ended September 30, 2020. In the third quarter of 2020 technology expenses decreased when compared to the third quarter of 2019, mainly due to hosting costs savings.

General and Administrative Expense

General and administrative expense decreased by 20.1% from €105.3 million in the nine months ended September 30, 2019 to €84.2 million in the nine months ended September 30, 2020, primarily due to a decrease in share based compensation expense from €31.9 million in the nine months ended September 30, 2019 to €12.0 million in the nine months ended September 30, 2020. Share based compensation expense in the nine months ended September 30, 2020 included charges for the cash-settled part of the 2020 virtual restricted stock unit program of €1.3 million. The final cash payout under the 2020 virtual restricted stock unit program will depend on the share price development following publication of our annual report for 2020 and may substantially exceed the charges recognized so far.

Excluding share based compensation expense, general and administrative expense would have decreased by 1.6% from €73.4 million in the nine months ended September 30, 2019 to €72.2 million in the nine months ended September 30, 2020. The overhead rationalization and portfolio optimization initiatives undertaken in late 2019 gradually paid out over the course of 2020 with general and administrative expense excluding share based compensation expense decreasing by 24.5% in the third quarter of 2020 compared to the third quarter of 2019.

Operating Loss

Operating loss decreased by 34.5% from €166.8 million in the nine months ended September 30, 2019 to €109.3 million in the nine months ended September 30, 2020. 6

Adjusting our operating loss for depreciation and amortization, share-based payment expense and other operating income and expense, our Adjusted EBITDA loss decreased by 29.5% from €129.3 million in the nine months ended September 30, 2019 to €91.2 million in the nine months ended September 30, 2020, due to the effects of our business mix rebalancing and enhanced cost efficiency.

Finance Income

Finance income decreased by nearly 40% from €4.9 million in the nine months ended September 30, 2019 to €3.0 million in the nine months ended September 30, 2020, primarily due to a decrease in interest income and foreign exchange gains on bank deposits in US dollars resulting from proceeds from our initial public offering.

Finance Costs

Finance costs nearly quadrupled from €1.6 million in the nine months ended September 30, 2019 to €6.3 million in the nine months ended September 30, 2020, primarily due to foreign exchange losses on bank deposits in US dollars.

Loss before Income Tax

Loss before income tax decreased by 31.1% from €163.4 million in the nine months ended September 30, 2019 to €112.6 million in the nine months ended September 30, 2020, primarily due to the effects of our business mix rebalancing and enhanced cost efficiency.

Income Tax Expense

Income tax expense increased from €0.1 million in the nine months ended September 30, 2019 to €1.4 million in the nine months ended September 30, 2020.

Loss for the Period

Loss for the period decreased by 30.2% from €163.5 million in the nine months ended September 30, 2019 to €114.0 million in the nine months ended September 30, 2020.

Quarterly Data

The following table sets forth certain unaudited financial data for each fiscal quarter for the periods indicated. The unaudited quarterly information includes all normal recurring adjustments that we consider necessary for a fair statement of the information shown. This information should be read in conjunction with the audited consolidated financial statements and related notes thereto appearing in our Annual Report and our unaudited condensed consolidated financial statements and related notes as of and for the three and nine months ended September 30, 2020 included as Exhibit 99.2 to the Report on Form 6-K dated November 10, 2020 to which this discussion is attached as Exhibit 99.3. Our quarterly results are not necessarily indicative of future operating results.


		2019(1)							2020^(1)^
		First	Second		Third		Fourth		First		Second		Third
	****	Quarter	Quarter	****	Quarter	****	Quarter	****	Quarter	****	Quarter	****	Quarter
		(unaudited, in millions)
Revenue	****	31.4	38.8	****	40.9	****	49.3	****	29.3	****	34.9	****	33.7
Cost of revenue		(16.2)	(22.0)		(21.9)		(24.4)		(10.9)		(11.7)		(10.4)
Gross profit	****	15.2	16.8	****	19.0	****	24.8		18.4		23.3		23.2
Fulfillment expense		(15.2)	(17.6)		(20.7)		(23.9)		(15.9)		(17.3)		(16.6)
Sales and advertising expense		(11.9)	(14.9)		(13.8)		(15.5)		(8.9)		(7.2)		(6.2)
Technology and content expense		(5.9)	(6.7)		(7.0)		(7.7)		(7.2)		(7.1)		(6.3)
General and administrative expense^(2)^		(27.8)	(44.9)		(32.7)		(39.2)		(30.4)		(31.1)		(22.7)
Other operating income		0.1	0.6		0.7		0.5		0.3		1.8		0.6
Other operating expense		(0.0)	(0.1)		(0.2)		(0.2)		(0.1)		(0.1)		(0.0)
Operating loss	****	(45.5)	(66.7)	****	(54.6)	****	(61.1)		(43.7)		(37.6)		(28.0)

All values are in Euros.

(1)

Due to rounding, the sum of quarterly amounts may not equal the amounts reported for the relevant full-year period.

(2)

Includes share-based payment expense of €4.3 million in the first quarter of 2019, €20.5 million in the second quarter of 2019, €7.1 million in the third quarter of 2019 and €5.3 million in the fourth quarter of 2019. Includes share-based payment expense of €6.0 million in the first quarter of 2020, €2.6 million in the second quarter of 2020 and €3.4 million in the third quarter of 2020.

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The following tables set forth certain key performance indicators, for each fiscal quarter for the periods indicated.


	****	2019												2020
		First			Second			Third			Fourth			First			Second			Third
	****	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter
		(unaudited, in millions)
Annual Active Consumers			4.3			4.8			5.5			6.1			6.4			6.8			6.7
Orders			5.0			6.2			7.0			8.3			6.4			6.8			6.6
GMV		€	240.2		€	280.9		€	275.3		€	301.2		€	189.6		€	228.3		€	187.3
GMV adjusted for perimeter effects and improper sales practices^(1)^		€	213.9		€	263.1		€	261.1		€	292.9			n/a			n/a			n/a
Adjusted EBITDA^(2)^		€	(39.5)		€	(44.4)		€	(45.4)		€	(53.4)		€	(35.6)		€	(32.9)	^(3)^	€	(22.7)

(1)	Adjustments relate to perimeter changes as a result of the portfolio optimization undertaken during the fourth quarter of 2019 as further described under Item 4. “Information on the Company—A. History and Development of the Company—Corporate History and Recent Transactions” in the Annual Report as well as improper sales practices as further described under Item 4. “Information on the Company—A. History and Development of the Company—Sales Practices Review” in the Annual Report.
(2)	Please see “Non-IFRS and Other Financial and Operating Metrics” for a reconciliation of Adjusted EBITDA, which is a non-IFRS measure, to the most directly comparable IFRS financial performance measure and why we consider Adjusted EBITDA useful.
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(3)	Includes a net expense of €3.6 million related to the settlement of several putative class action lawsuits were filed in the U.S. District Court for the Southern District of New York and the New York County Supreme Court against us and other defendants.
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Liquidity and Capital Resources

As of September 30, 2020, we had €147.1 million in cash and cash equivalents on our balance sheet. Most of our liquid means can be freely transferred, for a small fraction of our liquid means we may need authorization or permits for a cross-border transfer.

Since our inception, we have financed our operations primarily through equity issuances. We received net proceeds of $280.2 million from our April 2019 initial public offering, a concurrent private placement with Mastercard and the issuance of shares to existing shareholders to protect them from dilution. Our primary requirements for liquidity and capital are to finance general corporate purposes. We also need capital to finance cash payments under our virtual restricted stock unit programs, our capital expenditures, which consist primarily of computer equipment, office equipment and lease-hold improvements. We believe, based on our current operating plan, that our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our anticipated cash needs for working capital, capital expenditures, general corporate needs and business expansion for at least the next twelve months. Although we believe that we have sufficient cash and cash equivalents to cover our working capital needs in the ordinary course of business and to continue to expand our business, we may, from time to time, explore additional financing sources.

Consolidated Statement of Cash Flows


		For the nine months ended September 30,
	****	2019	2020
		(unaudited, in millions)
Net cash flows used in operating activities		(131.6)	(71.9)
Net cash flows (used in) / from investing activities		(65.8)	60.6
Net cash flows (used in) / from financing activities		321.0	(3.9)
Net increase/(decrease) in cash and cash equivalents		123.6	(15.2)
Cash and cash equivalents at the beginning of the period		100.6	170.0
Cash and cash equivalents at the end of the period		227.1	147.1

All values are in Euros.

Net Cash Flows Used in Operating Activities

Net cash flows used in operating activities decreased by 45.4% from a cash outflow of €131.6 million in the nine months ended September 30, 2019 to a cash outflow of €71.9 million in in the nine months ended September 30, 2020 as we focused on enhancing cost efficiency and making progress towards breakeven. Working capital management also contributed to this decrease.

Net Cash Flows Used in Investing Activities

Net cash flows used in investing activities changed from a cash outflow of €65.8 million in the nine months ended September 30, 2019 to a cash inflow of €60.6 million in the nine months ended September 30, 2020 due to movements in term deposits and other current assets. 8

Net Cash Flows from Financing Activities

Net cash flows from financing activities changed from a cash inflow of €321.0 million in the nine months ended September 30, 2019 to a cash outflow of €3.9 million in the nine months ended September 30, 2020. In the nine months ended September 30, 2019, we recorded cash inflows from our initial public offering and other capital increases, which did not recur in the nine months ended September 30, 2020.

Off-Balance Sheet Arrangements

As of September 30, 2020, and during the periods presented, we did not have any off-balance sheet arrangements other than as described under Item 5. “Operating and Financial Review and Prospects—E. Off-Balance Sheet Arrangement” in the Annual Report.

Contractual Obligations

We have entered into commercial leases of warehouses, office premises and transportation. The net present value of the future payments under leases amounts to €9.4 million as of September 30, 2020. As of September 30, 2020, we have also committed to future minimum lease payments under short term operating leases that amount to € 0.4 million.

The table below summarizes our contractual obligations as of September 30, 2020:


		Payment due by period
			Less than				More than 5
	****	Total	1 year	****	1-5 years	****	years
		(unaudited, in millions)
Lease liability future payments		9.4	2.6		6.5		0.3

All values are in Euros.

Quantitative and Qualitative Disclosures about Market Risk

During the nine months ended September 30, 2020, there were no significant changes to our quantitative and qualitative disclosures about market risk from those reported under Item 5. “Operating and Financial Review and Prospects—Quantitative and Qualitative Disclosures about Market Risk” in the Annual Report.

Critical Accounting Estimates and Judgments

As of September 30, 2020, there have been no material changes to the significant accounting estimates and judgment described under Item 5. “Operating and Financial Review and Prospects—Critical Accounting Estimates and Judgments” in the Annual Report.

Forward Looking Statements

This management’s discussion and analysis includes forward-looking statements. All statements other than statements of historical facts contained in this management’s discussion and analysis, including statements regarding our future results of operations and financial position, industry dynamics, business strategy and plans and our objectives for future operations, are forward-looking statements. These statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “believes,” “estimates”, “potential” or “continue” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statement, including, without limitation, the risks described under Item 3. “Key Information—D. Risk Factors,” in our Annual Report on Form 20-F as filed with the US Securities and Exchange Commission. Moreover, new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this management’s discussion and analysis may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We caution you therefore against relying on these forward-looking statements, and we qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements included in this management’s discussion and analysis are made only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor our advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Neither we nor our advisors undertake any obligation to update any forward-looking statements for any reason after the date of this management’s discussion and analysis to conform these statements to actual results or to changes in our expectations, except as may be required by law. You should read this management’s discussion and analysis with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Non-IFRS and Other Financial and Operating Metrics

Changes, percentages, ratios and aggregate amounts presented have been calculated on the basis of unrounded figures.

This management’s discussion and analysis includes certain financial measures and metrics not based on IFRS, including Adjusted EBITDA, as well as operating metrics, including Annual Active Consumers, Orders and GMV. We define Annual Active Consumers, Orders, GMV, Total Payment Volume, JumiaPay Transactions and Adjusted EBITDA as follows:

Annual Active Consumers means unique consumers who placed an order for a product or a service on our platform, within the 12-month period preceding the relevant date, irrespective of cancellations or returns.

We believe that Annual Active Consumers is a useful indicator for adoption of our offering by consumers in our markets.

Orders corresponds to the total number of orders for products and services on our platform, irrespective of cancellations or returns, for the relevant period.

We believe that the number of orders is a useful indicator to measure the total usage of our platform, irrespective of the monetary value of the individual transactions.

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

We believe that GMV is a useful indicator for the value transacted on our platform that is not influenced by shifts in our sales between first-party and third-party sales or the method of payment.

We use Annual Active Consumers, Orders and GMV as some of many indicators to monitor usage of our platform. 10

Total Payment Volume (“TPV”) corresponds to the total value of orders for products and services completed using JumiaPay including shipping fees, value-added tax, and before deductions of any discounts or vouchers, irrespective of cancellations or returns, for the relevant period.

We believe that TPV provides a useful indicator of the development, and adoption by consumers, of our payment services offerings.

JumiaPay Transactions corresponds to the total number of orders for products and service completed using JumiaPay, irrespective of cancellations or returns, for the relevant period.

We use TPV and the number of JumiaPay Transactions to measure the development of our payment services.

Adjusted EBITDA corresponds to loss for the period, 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 period, 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;
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·	to evaluate the performance and effectiveness of our strategic initiatives; and
---	---
·	to evaluate our capacity to expand our business.
---	---

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


		For the nine months ended
		September 30,
	****	2019	****	2020

Loss for the period		(163.5)	****	(114.0)
Income tax expense		0.1		1.4
Net Finance costs / (income)		(3.3)		3.4
Depreciation and amortization		5.6		6.1
Share-based payment expense		31.9		12.0
Adjusted EBITDA		(129.3)	****	(91.2)


	2019												2020
	First			Second			Third			Fourth			First			Second			Third
	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter		****	Quarter
	(unaudited, in millions)
Loss for the period		(45.8)			(67.8)			(49.9)			(63.6)			(42.3)			(39.4)			(32.4)
Income tax expense		0.1			0.2			(0.2)			0.5			0.1			0.5			0.8
Net Finance costs / (income)		0.2			0.9			(4.5)			2.0			(1.6)			1.3			3.6
Depreciation and amortization		1.7			1.8			2.1			2.3			2.1			2.1			1.9
Share-based payment expense		4.3			20.5			7.1			5.3			6.0			2.6			3.4
Adjusted EBITDA		(39.5)			(44.4)			(45.4)			(53.4)			(35.6)			(32.9)			(22.7)