Jumia(US:JMIA)2023-08-15 15:17Financial Data and Key Metrics Changes - In Q2 2023, the company reported a revenue of $48.5 million, down 15% year-over-year, but up 6% on a constant currency basis [41] - Adjusted EBITDA and operating losses were cut by two-thirds, reaching the lowest levels in over four years [9] - Cash utilization for the quarter was $38 million, down 42% year-over-year [52] - The liquidity position at the end of June 2023 was $166 million, with nearly 70% in USD, reducing exposure to local currency risk [53] Business Line Data and Key Metrics Changes - First Party revenue was $21.9 million, down 12% year-over-year, but up 19% on a constant currency basis [41] - Marketplace revenue reached $26.1 million, down 15% year-over-year, stable on a constant currency basis [42] - JumiaPay transactions reached 2.1 million in Q2 2023, down 38% year-over-year, largely due to the decline in JumiaPay app services [38] Market Data and Key Metrics Changes - Quarterly active consumers, orders, and GMV declined by 28%, 37%, and 25% year-over-year, respectively [12] - The average inflation level across the company's footprint reached 14.1% in June 2023, with Nigeria experiencing an 18-year high at 22.8% [13] - Foreign exchange contributed 13 to 14 points to the 25% GMV decrease in Q2 2023, with nine out of ten local currencies depreciating against the dollar [15] Company Strategy and Development Direction - The company is focused on improving supply quality and depth, particularly in core categories like electronics and fashion [17] - There is a strategic shift towards penetrating underserved markets outside major cities [18] - JumiaPay is being enhanced as a key enabler for e-commerce growth, with initiatives like Buy Now Pay Later solutions [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment, describing it as possibly the worst in a decade for emerging markets [66] - There are early signs of growth in some priority categories, with expectations for a gradual return to growth in active customers [85] - The company remains confident in its long-term growth potential despite current challenges [59] Other Important Information - The company has suspended its first-party grocery offering in most countries to focus on more profitable categories [14] - Fulfillment expenses decreased by 50% year-over-year, reflecting improved logistics efficiency [46] - The company is committed to maintaining a disciplined approach to marketing spend, focusing on enhancing business fundamentals [48] Q&A Session Summary Question: Trends in order declines and exit rates - Management noted that the decline in orders was largely due to deliberate actions to reduce unprofitable categories, with some encouraging signs of stabilization in certain markets [66] Question: Impact of high commission rates on consumer prices - Some merchants have passed on commission increases to consumers, but the impact varies by category, with less effect seen in categories where selection is prioritized [68] Question: Return to growth in active customers - Management could not provide a specific timeline but emphasized that improving supply is crucial for returning to growth [85] Question: Details on cash balance and trapped cash - There are no material amounts of trapped cash, and the company has started repatriating cash from various countries [87]