Beginnings of a turnaround
Tracy Kivunyu
#themes: customer and order growth, guidance upgrade
Jumia 1Q25 results: Jumia’s loss after tax contracted from USD 41m in 1Q24 to USD 17m in 1Q25, as lower corporate sales in Egypt which had a negative impact on GMV and revenue had a positive impact on finance costs. Active customers, orders and GMV adjusted for devaluation all showed great progress in the quarter. Cost efficiency strategies implemented in 1Q25 are expected to yield benefits in the subsequent quarters, while Jumia also expects minimal investment in working capital for the rest of the year. This informs Jumia’s upgraded guidance for FY25 (GMV guidance retained at USD 795m to USD 830m), with physical order growth to 20-25% y/y up from 15-20% previously and loss before tax of USD 50m -USD 55m, compared to USD 65m -USD 70m previously. Jumia has also guided for loss before tax to contract further to USD 25m - USD 30m in FY26, breakeven at PBT level in 4Q26 and to deliver a profit in FY27. The FY27 PAT target is ahead of our estimated adjusted EBITDA breakeven target of FY29e. Jumia is also expected to diversify revenue streams through the monetisation of its logistics platform, via Jumia Deliveries, an in-house last mile logistics platform as a service, which after a pilot in Ivory Coast has been launched in Nigeria. We shall update our numbers for the upgraded guidance.
Liquidity position update: Jumia’s liquidity position was USD 111m in 1Q25, declining by USD 23m q/q. (4Q24 q/q: - USD 31m). Working capital declined by USD 8m, reflecting higher inventory levels ahead of the Jumia Anniversary campaign slated for early May.
Solid customer and order growth: Active customers grew 8% y/y to 2.1m (+14% y/y like for like, excluding Tunisia and South Africa which were exited in 4Q24), in line with SBGS estimates. Total orders grew 12% y/y to 5.1m (15% y/y like for like), while physical goods orders grew 15% y/y (+21% like for like) to 4.5m, 4% behind SBGS estimates. Average order value dropped by 23% y/y to USD 35.4, reflecting Jumia’s strategic focus on product categories such as fashion.
GMV impacted by devaluation and lower Egypt sales: Total Gross Merchandise Value (GMV) declined by 11% y/y (-2% in constant currency) to USD 162m (5% behind SBGS estimates) while like for like GMV adjusted for the exit in Tunisia and South Africa declined by 8% y/y (+1% in constant currency). GMV performance was impacted by lower corporate sales in Egypt (Egypt GMV down 69% y/y), which have been declining throughout FY24. Devaluation also impacted GMV due to low base effects, without which GMV would have grown 10% y/y. Ivory Coast GMV grew 4% y/y due to higher growth in fashion orders, while Nigeria and Kenya showed strong GMV growth at 18% y/y and 44% y/y respectively.
Revenue and margins were impacted by lower Egypt sales: Revenue declined by 26% y/y (-18% in constant currency) to USD 36.3m, 1% behind SBGS estimates, as Jumia generated higher take rates on GMV compared to our estimates. First party sales declined 21% y/y (-9% y/y in constant currency) to USD 17.8m due to lower Egypt corporate sales and currency impacts. Marketplace revenue also declined by 30% y/y (-9% in constant currency) to USD 18.1m impacted by lower third-party corporate sales and currency devaluations. Gross profit declined 36% y/y (-32% in constant currency) to USD 20m, with gross profit margin declining by 5ppts y/y to 12% in 1Q25 (flat q/q) due to lower corporate sales in Egypt.
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