Jumia Technologies AG (JMIA) on Q1 2021 Results - Earnings Call Transcript

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Jumia's results conference call for the first quarter of 2021. I would now like to turn the call over to Safae Damir, Head of Investor Relations for Jumia. Please go ahead. Safae Damir: Thank you. Good morning, everyone. Thank you for joining us today for our first quarter 2021 earnings call. With us today are Sacha Poignonnec and Jeremy Hodara, Co-Founders and Co-CEOs of Jumia; as well as Antoine Maillet-Mezeray, CFO. This call is also being webcast on the IR section of our corporate website. We will start by covering the safe harbor. We would like to remind you that our discussions today will include forward-looking statements. Actual results may differ materially from those indicated in the forward-looking statements. Moreover, these forward-looking statements may speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements. Sacha Poignonnec: Thank you. Thank you very much, and welcome, everyone. Thank you for joining us today. Before we go into the details of Q1 performance, we would like to talk about our strategy. We know that following our recent offering, this is an important question for our shareholders, and we would like to address it upfront. We founded Jumia in 2012, 9 years ago, with the vision to connect consumers and sellers and make commerce easier in Africa. We spent the first few years understanding the dynamics of our markets, consumers, the sellers, logistics, payments, and we then built the Jumia platform, which we think is uniquely adapted to the specifics of our markets. About 3 years ago, we decided to set the business on a clear path towards profitability. And we chose to do that instead of growing and scaling as fast as we can because we wanted to make sure that as the business scales, it turns profitable. I believe we've made very good progress on this over the past 18 months. We have significantly diversified our category mix and increased our exposure to product categories that are very relevant to consumers as part of their daily lives. We have also increased the penetration of JumiaPay to 26% of GMV, 37% of orders. On profitability, we've now posted 6 consecutive quarters of positive gross profit after fulfillment. I think we can now confidently say that we are making money after logistics. For 5 consecutive quarters, we have been reducing our adjusted EBITDA loss in absolute terms year-over-year. And we have also multiple countries, which are breakeven before tech and G&A expenses in a number of quarters. And as you are well aware, all this progress has been achieved with no particular tailwind from COVID-19. Finally, of course, we have significantly strengthened our balance sheet, raising a total of $570 million in net proceeds over the past 6 months, which gives us very strong strategic flexibility. If we take a look at where we are today, we have in Q1 an EBITDA loss of EUR 27 million, which is 20% less than a year ago. Jeremy Hodara: Thanks, Sacha. Hello, everyone. So our focus in Q1 was to drive the usage in a selective and thoughtful manner with a robust level of marketing efficiency. And that was and is made possible by the strength of the Jumia brand in the countries where we operate. And we had a very good illustration of the Jumia brand strength with the result of the 2020 most influential brand survey in Egypt that was released by IPSOS in March this year. The survey is a global initiative. Was conducted in Egypt for the first time in 2020. And it assessed the brand's impact on Egyptian consumers based on multiple dimensions, such as trustworthiness, leadership presence, leading edge. Jumia ranked 7th among 120 national and international brands in Egypt and ranked number one in the digital and e-commerce category in Egypt. This high level of recognition by the consumer is a key enabler of our marketing efficiency, while our annual sales and advertising per annual active consumer declined by 46%, annual active consumers reached 6.9 million, up 7% year-over-year as we continue to acquire new consumers and engage existing ones. In the context of a decrease in the sales and advertising expense per order of 12%, total orders for the quarter reached EUR 6.6 million, up 3% year-over-year. This is a reversal of the declining trend observed over the prior 2 quarters. The fastest-growing categories in terms of volumes continue to be everyday product category, such as beauty, food delivery, fashion, while we continue to see volume declines in electronics albeit with a modest recovery observed in the phone category. As we reduced our sales and advertising spend by 9% year-over-year, GMV was down 13%, reaching EUR 165 million in Q1. It's also worth noting that the FX impact this quarter was material with the Nigerian naira, the Egyptian pound and the Kenyan shilling declining 15%, 9% and 19%, respectively, against the euro in Q1 2021 compared to Q1 2020. So on a constant-currency basis, GMV was down 5% year-over-year, while sales and advertising expense was EUR 8.8 million, down 1% year-over-year. Our GMV mix continues to shift towards lower ticket size everyday product categories, which are affordable entry points into the Jumia ecosystem, while ultimately supporting repurchase dynamics. Antoine Maillet-Mezeray: Thank you, Jeremy. Hello, everyone. Let's start with our monetization metrics. In Q1 '21, marketplace revenue was up 6% and gross profit up 11%. FX headwinds mentioned earlier by Jeremy affected materially these figures. On a constant currency basis, marketplace revenue was up 16%, while gross profit was up 21% year-over-year. Taking a closer look at our various marketplace revenue streams on Slide 18, we can see that commissions increased by 9% year-over-year due to an increase in the share of higher commission rate categories, including fashion, beauty or food delivery. Fulfillment revenue increased by 11% as a result of pricing changes within our cross-border logistics, where we were initiated in the second half of 2020. As part of these changes, 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. That is also what drove the 13% decline in value-added services. Marketing and advertising revenue increased by 36% year-over-year. This is a result of the robust takeup by advertisers, both Jumia sellers and third parties of Jumia advertising solutions as we continue to improve the relevance and user experience of our ad solutions. As part as our efforts to continuously diversify our monetization streams and extract value from the broader asset of our platform, we piloted last year the opening of Jumia Logistics to third parties. On the back of the positive result of this pilot, we rolled out these services more broadly in Q1 '21. During the quarter -- I am now on Page 19, over 750,000 packages were delivered more than the total handled in 2020 as part of the pilot. We worked with over 250 logistics as a service clients, and I'd like to go through some examples to give you a sense of the diversity of the clients we work with. In Kenya, Jumia was appointed as preferred logistics partner for Weetabix to undertake their deliveries to modern trade across Kenya. In Ivory Coast, We work for ZECI Solar Panel, which is a JV between Zola Electric, an American off-grid electricity company and Electricité de France, the French utility company. The JV provides solar power to rural communities and a means to eradicating poverty. Jumia Logistics offered to give the storage and distribution of solar panels from Abidjan to up-country households. In Nigeria, we work with Zaron, which is a leading cosmetics brand in West Africa. Jumia Logistics provides delivery services for their customer orders across Nigeria, whether these orders were placed within or outside the Jumia platform. We also do full truckload transportation to support in the distribution within Lagos and the southwest region. The diversity of the clients we work with speaks to the large addressable market we have for logistics services. Pretty much every industry and service sector faces logistics pain points in Africa, and we are uniquely positioned to help address these pain points which makes it a meaningful potential revenue stream going forward. Moving on to costs on Page 21. We have done a lot of work on costs over the past 18 months, driving strong efficiencies throughout the P&L. Gross profit after fulfillment expense reached EUR 6.2 million, increasing by a factor of 2.5 compared to Q1 '20. This is our sixth consecutive quarter of positive gross profit after fulfillment expense. Fulfillment expense decreased by 11% on a currency-adjusted basis and by 3% on a constant-currency basis, while orders increased by 3% in Q1 2021 compared to Q1 2020. This was mostly a result of fulfillment staff cost savings as well as the change in our delivery pricing model from cost per package to cost per stock which was implemented starting from the second quarter of 2020. In addition, we were able to pass on an increasing proportion of our fulfillment expense, 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 69% in Q1 '20 to 78% in Q1 '21. I would like to spend a few minutes on the strategic asset of our platform, which is our pickup station network on Page 22. Pickup stations are physical locations where consumers can come to collect their packages. This growing network is a huge asset for us, which goes way beyond logistics. Our pickup stations are Jumia branded locations almost entirely operated by third-party partners. We have today over 1,600 stations in our network. And in Q1 2021, 23% of packages were delivered to pickup stations, while the rest was door delivered. Let me tell you all these pickup stations drive convenience, cost efficiency while being a powerful asset for the development of an online to off-line or O2O strategy as well as the development of JumiaPay. In terms of convenience, many consumers actually prefer to go and collect their packages rather than have someone come with the package to their home or office. It's a great alternative for consumers when ordering on Jumia. We also charge cheaper delivery fees so consumers can also save money on delivery fees. In terms of cost efficiency, pickup stations are great as they are on average, cheaper for us than door delivery. With respect to O2O, pickup stations served as a bridge between the digital ecosystem and the off-line daily life of our consumers. They are the touch points that brings the Jumia brand closer to consumers while creating further trust in our brand because consumers start to see Jumia as an integral part of their local communities. We are also increasingly leveraging them as ordering points where consumers can place orders with the help of a pickup station staff which helps educate consumers. In some cases, JForce agents helped drive footfall to the ordering points and assist with the education process of consumers. We have included in our release a case study of all pickup stations helped expand our penetration beyond primary cities in Ivory Coast. To support equitable economic development, and the inclusion of secondary cities and rural areas, we established a scalable pickup station model in partnership with CDC, the U.K.'s development finance institution. These outlets sale as both pickup stations and ordering points. They are operated by local entrepreneurs who earn an income from the delivery fees and the commissions on orders placed from the outlet. This is a great illustration of the impact we can have on the inclusion of consumers in remote areas as well as job creation. Lastly, we intend to leverage our network of pickup stations for the future development of the e-wallet activities of JumiaPay, whether it's cash-in, cash-out transactions or over-the-counter everyday services such as airtime recharge and utility bill payments. Moving on to sales and advertising costs. Sales and advertising cost expense decreased by 9% from EUR 8.9 million in Q1 '20 and to EUR 8.1 million in Q1 '21. On a constant currency basis, sales and advertising expense was down 1% year-over-year. We continue to make progress on the marketing efficiency metrics. Although sales and advertising as a percentage of GMV increased by 21 basis points from 4.7% to 4.9%, we continued to make good progress on per order and per consumer basis. Sales and advertising expenses per order decreased by 12% from EUR 1.4 in Q1 2020 to EUR 1.2 per order in Q1 '21. And annual sales and advertising expense per annual active consumers decreased by 44% from EUR 8.2 per annual active consumer to EUR 4.6. These efficiencies are a result of continued programmatic marketing improvement with better targeted and more engaging campaigns across social media and search engines. As mentioned by Sacha at the beginning of the call, we expect to gradually increase our sales and advertising expense to drive further usage growth, leveraging the strong unit economics we have achieved. Finally, our third major cost is technology and G&A. G&A expense, excluding SBC, reached EUR 20.3 million down 17% year-over-year. This decrease was attributable to staff cost savings as a result of the portfolio optimization and headcount rationalization initiatives launched in the first quarter of 2020, alongside a decrease in professional fees, including legal expense. Moving on to the balance sheet and cash flow items, our path to profitability is further supported by our asset-light business model. CapEx in Q1 '21 was EUR 0.4 million as we operate Jumia Logistics as a platform with very limited CapEx requirements. Net change in working capital resulted in an outflow of EUR 4.8 million in Q1 '21. We have seen a decrease in payables in Q1 '21 due to a shorter payable cycle and the payment of -- in Q1 of Black Friday-related invoices from Q4 '20. Cash utilization for the quarter defined as cash used in operating and investing activities, was EUR 29.7 million in Q1 '21. This compares to a cash utilization of EUR 39.6 million in Q1 '20 and represents a 25% decrease year-over-year. Cash and cash equivalent position at the end of March '21 was EUR 485.6 million. This includes approximately EUR 205 million of the total gross proceeds from the offering completed on March 30, with a remaining EUR 88 million of cash received in April '21. Having significantly strengthened our balance sheet we now have the flexibility to further invest behind growth, and accelerate the development of some of our strategic initiatives, including payment and financial services for consumers and sellers. With that, I'll hand over to Sacha for concluding remarks. Sacha Poignonnec: Thank you, Antoine. Thank you, guys. Just final thoughts before questions. Everything we've done over the past couple of years and what we intend to do going forward is geared towards capturing this huge market opportunity we see in e-commerce and payment in Africa. We're very focused on the long term, and we strongly believe that the platform we have built is uniquely adapted to our markets to win in the long term. We're constantly improving and strengthening our value proposition to better serve the consumers and the sellers. Today, we talked about the pickup station network, which I think many of you may not know about. Also, our food delivery business, which probably some of you did not know about and both of which are great illustrations of the strategic assets that we have and how we can offer more convenience to our consumers, bring Jumia even closer to them and be at the heart of the communities. The situation is pretty simple. Our unit economics in Q1 are very good. They are outstanding, I think. All the work that we've done on monetization, cost efficiency is really paying off. We've been making money now for 6 consecutive quarters after fulfillment. We're seeing many countries getting closer to breakeven at local level. We've been consistently reducing our adjusted EBITDA loss in absolute terms, on a year-over-year basis, and that's for 5 quarters now. And all this is what we said we would do, and we are pleased with those results. And the path ahead is also very clear, we want to accelerate growth across the platform to take the business further on its path to profitability. And I think as we have said a little bit in the call, we are quite clear on what we will do and we will not do. We will not seek to grow at any cost. The way we will drive the growth will continue to be disciplined, thoughtful guided by the needs of our consumers, the relevance for our markets, and we are focused on growing the users. The orders, probably more than the GMV, but also the GMV in a very thoughtful manner. And we're not going to do any big bank, right? We're going to drive increase in sales and advertising and technology expenses in a gradual manner, right? Before any large-scale deployment of product or initiatives, we always conduct AB tests, pilots. That's why we have lots of countries we can use a handful of countries to test pilot and to establish proof of concept before we do any broader rollout in this framework of development and investments will remain unchanged. The mindset of discipline will also apply in the way we develop JumiaPay. And an important part of the investments in JumiaPay are allocated to compliance, risk management processes. And we view those investments as essential infrastructure to scale JumiaPay services, on platform and off platform. And as we introduce new services and solutions, which we will do in a gradual manner, we will continue to drive those investments. In summary, we're very excited by the opportunity and both on e-commerce and payments. And we are very confident that we have the platform and the people, the resources to capture this opportunity, and further strengthen the competitive moats that we've built. Thank you very much for the attention, and we are now very happy to take questions. Operator: Our first question is from Aaron Kessler from Raymond James. Aaron Kessler: A couple of questions. First, just maybe on the seasonality. It looks like it's a little bit more than we expected from Q4 to Q1 in terms of marketplace revenues. Is that -- was that primarily just seasonality? Or was there other headwinds, whether it's COVID or something else in the quarter? And then the 1P revenues as well was a little bit lower. I know that's kind of an intentional shift away from 1P revenues. Is that kind of a new base level we should be looking at for those revenues? Or do you think that continues to drift down from where it is really shifting out of 1P at this point? And then finally, just maybe just use of cash, and congrats on the recent equity raises. I know you talked about maybe it gives you some flexibility to invest in some new areas or continue to invest. Any specific areas you would call out that you're focused on investing with that increased cash position. Sacha Poignonnec: Thanks, Aaron. Thank you very much. Look, no particular seasonality in Q1, I would say, right? It's a quarter that is obviously the beginning of the year. And this year, nothing really special. So I think that's on that. I think the Ramadan this year started sometime in mid-April, and at some point, it's coming earlier every year. So maybe next year, there will be an impact from that because sometimes it drives a specific consumer behavior. But I would say, nothing special to call out this year, honestly. On the 1P, it's interesting. It's a very good question. We've been very clear that for us, there's no particular objective in terms of how small or how big do we want 1P to be, and we are primarily focused on building a marketplace. But 1P is very useful and very important for us because it's a strategic way sometimes to engage in certain categories. And for example, sometimes if there is a shortage of supply, or if there is a seller who does not carry certain goods, which are very relevant to the consumers, we are able to act as the seller, right? And it's a very helpful tool, if you will, for us to address the consumer relevance. And we feel pretty good about where we are, right? For now a number of quarters, it's been anywhere around 10%, plus or minus, right, of our GMV. And it's a level that is -- that we are comfortable with. And it may increase in the future as well, right? We're not solving to make it particularly lower than this. And it could be that if we see a shortage of supplies or supply disruptions, that we decide to drive a little bit more 1P. So again, for us, what's important is that 1P remains a minority of the transactions in the GMV. But we feel good with the current level for Q1. In the future, it may go up if we feel that's necessary, and it's something that we know how to do. We have the know-how to operate certain level of 1P. So I think it's a good thing for us to be able to do that. In terms of use of cash, in the next few quarters, we're going to be extremely focused on our core business, right? So really e-commerce. And by e-commerce, we mean the physical goods marketplace and food delivery, for us, that's e-commerce. And then JumiaPay, right? So all our resources are focused on those in order to continue to drive good path to profitability and to accelerate the growth of the usage and develop some new services for JumiaPay. And within that, of course, there's a lot of innovations and new products and new features and new services that we are working on. But I would say, clearly, clearly, clearly, within this core mandate, right? And same thing geographically, we're extremely focused on our 11 countries with no intention to go anywhere in the near future. And then as we see the growth accelerates and the path to profitability continue, we may reassess that, but for the foreseeable future, extremely focused on the core e-commerce for physical goods, food delivery and JumiaPay. And of course, I don't mention logistics for us is a core part of the platform, which is empowering the core. So some investments there as well. But overall focus on the core. Aaron Kessler: Got it. Maybe finally, just can you briefly talk about the overlap. You mentioned the food delivery and on-demand, the overlap between food delivery and core retail that you're seeing or maybe how that's increasing? Sacha Poignonnec: Yes, very much, it's fascinating to see the overlap growing with time. And you can see -- you can take a few angles to think about this overlap. You see, one, more consumers are starting to use both, right? And in the past, for us, we were observing that the food delivery business tended to be for the upper middle class. The people who can afford to go to a restaurant, right? And of course, then they can afford to order a restaurant at home. And we're seeing more and more of our historical consumers from the physical goods marketplace also discovering that service as they find it attractive. And also as we have more and more restaurants, which -- to choose from. There is a big overlap also in terms of vendors, right? We have many of our vendors want to be able to offer a 30-minute delivery, and they want to be able to also offer e-commerce nationwide, right? Many of the FMCG grocery players, they think about newcomers in a way to where you can reach consumers and give them something that is immediate, a purchase that maybe is unplanned and more impulsive and a convenience purchase, right? So it's a great channel for the vendors to address this impulse, convenience and instant delivery. But of course, you also want to be shipping goods on the other side of the country with a few days' delay and we want to be able to serve the needs of the consumers who are not in the big cities, they're outside the big cities. And also for purchases, which are maybe less planned -- or maybe more planned, I should say, and more prepared, right? So the vendors are extremely eager to explore both platforms as a way to address 2 different consumer needs. And then from a logistics perspective, obviously, having the ability to deliver very, very fast in the big cities is a very strong competitive advantage for us to use for the e-commerce deliveries, but also to use for the monetization of Jumia Logistics. And today, we offer the Jumia Logistics as a service to third parties, and we mainly focus today on giving them those clients last-mile delivery and more e-commerce traditional deliveries and which time we will expand this to instant delivery. So it's overall very attractive. And last but not least, it makes our subscription program very attractive, right, which is a competitive advantage as well because the members of the Jumia Prime program they have advantages both for the e-commerce but also for the food delivery. And that is, of course, very attractive because then it creates more reasons for consumers to use both. Operator: Our next question is from Lamont Williams from Stifel. Lamont Williams: First question I had was on this food delivery unit economics. Can you talk a little bit about how the unit economics on the food delivery and on-demand compares with some of the traditional e-commerce business? And then could you also just talk about the competitive landscape in food delivery? Sacha Poignonnec: Yes, of course. I think the unit economics for us have been pretty attractive, I would say, and definitely contributing to the good results that you have seen in our unit economics over the last few quarters. The average basket size is -- it differs by country, but even the, let's say, low double digit, right? So between EUR 10 and EUR 15 depending on the month, depending on the cities, et cetera, but that's more or less what we're talking about. And then you have commission levels, which have been varying, of course, by countries, but they are generally above -- or around 20%, right? So that's more or less what we've been seeing. And then the logistic costs are, of course, tend to be lower than e-commerce, right? So because it's more instant delivery. In e-commerce, we have quite a significant share of the businesses outside the big cities. And it's also sometimes in the rural area, right? So you have to deleverage it. When we look at the average in the big city, you have a cost which is pretty similar, right? So when we look at the cost of delivering a pair of shoes on a next-day basis in Lagos, for example. And when we look at the cost of delivering a pizza in 30 minutes, it's pretty comparable, right? And generally, most of the orders they include what we call a shipping fees. So the consumers are participating to this logistic cost. So all in all, it's an attractive business from a unit economic perspective. And in terms of competition, there's quite a number of players who are acting in our countries of operations. In some of them, you have some historical player who have been there even before we were there. You have a few international players who are active in certain markets like Uber Eats or Glovo. And you have also a lot of the ride-hailing companies who have tried to enter into ride hailing some local companies doing better are attempting to expand into food delivery because it's obviously a very natural expansion as we all know. And so yes, it's a rather competitive offering. But I think we're very well positioned because we have the Jumia brand, obviously, which is huge, and we benefit from all those investments. We've been doing this business for 10 years, which is a lot. I don't know any player multi-country who has done it for longer than us. And we've got a lot of experience and we've got the scale of the infrastructure of Jumia to leverage, right, the brand, the logistics, the payments, the consumer base, the relationship with advertisers, the relationship with the restaurants, the Jumia Prime subscription model. So it's -- for us, it's something that we feel very strong about. And we think that we have a very competitive and very effective value position for consumers and for restaurants. Operator: Our next question is from from Blackrock. Unidentified Analyst: I've got only two quick questions. The first is, can you just explain your increase in trade and other receivables from EUR 10 million to roughly EUR 100 million. And then the second is on your GMV, it's just a technical question. Does the EUR 165 million you quote, is that gross of returns, discounts and vouchers or net? And if it's gross, please, can you provide the net number? Sacha Poignonnec: Thank you for the question. Probably Antoine, you should take those, please? Antoine Maillet-Mezeray: Yes, I can take both. In the increase of receivable includes the third tranche of the offering that we made in May, and that was collected received in April. It accounts for USD 88 million. The revenues we are showing all net of vouchers. Sacha Poignonnec: I think maybe your question. The first one is like cash basically. And. Antoine Maillet-Mezeray: Yes. It's no cash for sure. No, it's not cash. Operator: This concludes our question-and-answer session. I would like to turn the conference back to Sacha for closing remarks. Sacha Poignonnec: Great. Thank you very much, everyone, for attending, as always, Very happy to take follow-up questions and very much looking forward to next steps. Thank you very much, and take care. All the best. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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Jumia Technologies AG (NYSE:JMIA) Financial Performance Analysis

  • Jumia Technologies AG (NYSE:JMIA) has a Return on Invested Capital (ROIC) of -93.11%, indicating it is not generating sufficient returns to cover its cost of capital.
  • Comparatively, fuboTV Inc. (FUBO) has a less negative ROIC to WACC ratio, suggesting it is closer to breaking even than Jumia.
  • Blink Charging Co. (BLNK) exhibits the lowest ROIC to WACC ratio at -8.09, highlighting significant inefficiencies similar to Jumia's.

Jumia Technologies AG (NYSE:JMIA) is a leading e-commerce platform in Africa, offering a wide range of products and services. The company aims to connect sellers with consumers, providing a convenient online shopping experience. Despite its ambitious goals, Jumia faces stiff competition from other e-commerce giants and local players in the African market.

In evaluating Jumia's financial performance, the Return on Invested Capital (ROIC) is a critical metric. Jumia's ROIC stands at a concerning -93.11%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 18.35%. This indicates that Jumia is not generating sufficient returns to cover its cost of capital, highlighting inefficiencies in its operations.

Comparing Jumia to its peers, fuboTV Inc. (FUBO) has a ROIC of -0.02% and a WACC of 12.13%, resulting in a ROIC to WACC ratio of -0.0018. Although still negative, FUBO's ratio is the least negative among the group, suggesting it is closer to breaking even. This positions FUBO as a relatively better performer in terms of capital efficiency.

On the other hand, Blink Charging Co. (BLNK) has the lowest ROIC to WACC ratio at -8.09, with a ROIC of -139.46% and a WACC of 17.24%. This significant gap indicates that Blink is struggling to generate returns that cover its cost of capital, similar to Jumia's challenges.

Overall, all companies in this analysis, including Jumia, are operating with negative ROICs, meaning they are not covering their cost of capital. However, fuboTV's relatively better ROIC to WACC ratio suggests it may have a better chance of improving its financial performance compared to its peers.

Jumia Technologies AG (NYSE:JMIA) Financial Performance and Competitive Analysis

  • Jumia Technologies AG's Return on Invested Capital (ROIC) is -93.11%, significantly below its Weighted Average Cost of Capital (WACC) of 18.59%, indicating inefficiencies in capital utilization.
  • Compared to peers, fuboTV Inc. (FUBO) has the least negative ROIC to WACC ratio, suggesting it is closer to achieving a balance between returns and capital costs.
  • Blink Charging Co. (BLNK) exhibits the most negative ROIC to WACC ratio among the peers, highlighting significant challenges in capital efficiency.

Jumia Technologies AG (NYSE:JMIA) is a leading e-commerce platform in Africa, offering a wide range of products and services. The company operates in a competitive market, facing rivals like Amazon and Alibaba, which have a global presence. Jumia's focus is on providing a marketplace for sellers and buyers, along with logistics and payment services to facilitate transactions.

In evaluating Jumia's financial performance, the Return on Invested Capital (ROIC) is a critical metric. Jumia's ROIC stands at -93.11%, which is significantly below its Weighted Average Cost of Capital (WACC) of 18.59%. This indicates that Jumia is not generating sufficient returns to cover its cost of capital, highlighting inefficiencies in capital utilization.

Comparing Jumia to its peers, fuboTV Inc. (FUBO) has a ROIC of -0.02% and a WACC of 12.38%, resulting in a ROIC to WACC ratio of -0.0017. Although fuboTV's ratio is negative, it is the least negative among the peers, suggesting it is closer to achieving a balance between returns and capital costs.

Fastly, Inc. (FSLY) and Nano Dimension Ltd. (NNDM) also show negative ROIC to WACC ratios of -1.40 and -1.06, respectively. These figures indicate that both companies, like Jumia, are struggling to generate returns that exceed their cost of capital, though they are performing better than Jumia in this regard.

Workhorse Group Inc. (WKHS) and Blink Charging Co. (BLNK) have ROIC to WACC ratios of -1.14 and -8.00, respectively. Blink Charging's ratio is the most negative, indicating significant challenges in capital efficiency. Despite these challenges, fuboTV's relatively better position suggests it may have a more effective strategy for managing its capital compared to its peers.

Jumia Technologies AG (NYSE:JMIA) Financial Analysis

  • Jumia Technologies AG (NYSE:JMIA) has a ROIC of -93.11% and a WACC of 18.16%, indicating poor capital efficiency.
  • fuboTV Inc. shows the least negative ROIC to WACC ratio among peers, suggesting better capital management.
  • Blink Charging Co. has the most negative ROIC to WACC ratio, highlighting significant challenges in capital efficiency.

Jumia Technologies AG (NYSE:JMIA) is a leading e-commerce platform in Africa, offering a wide range of products and services. The company operates in a competitive market, with peers like fuboTV Inc., Fastly, Inc., Nano Dimension Ltd., Workhorse Group Inc., and Blink Charging Co. These companies, although in different sectors, provide a basis for comparison in terms of financial metrics like ROIC and WACC.

Jumia's ROIC of -93.11% is significantly lower than its WACC of 18.16%, resulting in a ROIC to WACC ratio of -5.13. This indicates that Jumia is not effectively using its capital to generate returns, as its returns are far below the cost of capital. This negative ratio suggests challenges in capital efficiency, which is crucial for long-term sustainability.

In comparison, fuboTV Inc. has a ROIC of -0.02% and a WACC of 12.11%, leading to a ROIC to WACC ratio of -0.0018. Although still negative, fuboTV's ratio is the least negative among the peers, indicating it is closer to covering its cost of capital. This suggests that fuboTV is in a relatively better position in terms of capital efficiency compared to Jumia.

Fastly, Inc. and Nano Dimension Ltd. also show negative ROIC to WACC ratios of -1.30 and -0.83, respectively. These figures highlight that these companies, like Jumia, are struggling to generate returns that meet or exceed their cost of capital. However, their ratios are less negative than Jumia's, indicating slightly better capital management.

Blink Charging Co. has the most negative ROIC to WACC ratio of -7.82, with a ROIC of -139.46% and a WACC of 17.83%. This suggests even greater challenges in capital efficiency compared to Jumia. Despite the negative ratios across the board, fuboTV's relatively better position highlights the importance of managing capital effectively to improve financial performance.

Jumia Technologies AG (NYSE:JMIA) Financial Performance and Market Challenges

  • Jumia Technologies AG's (NYSE:JMIA) Return on Invested Capital (ROIC) is significantly negative at -93.11%, indicating inefficiency in generating sufficient returns on invested capital.
  • Despite facing stiff competition, Jumia's Weighted Average Cost of Capital (WACC) stands at 18.11%, highlighting the challenges in covering the cost of capital with returns.
  • Comparative analysis with peers such as fuboTV Inc. (FUBO), Fastly, Inc. (FSLY), Nano Dimension Ltd. (NNDM), Workhorse Group Inc. (WKHS), and Blink Charging Co. (BLNK) reveals Jumia's relative position in terms of capital efficiency and market challenges.

Jumia Technologies AG (NYSE:JMIA) is a leading e-commerce platform in Africa, offering a wide range of products and services. The company aims to connect sellers with consumers, providing a convenient online shopping experience. However, Jumia faces stiff competition from other e-commerce giants and local players in the African market.

In analyzing Jumia's financial performance, the Return on Invested Capital (ROIC) is a critical metric. Jumia's ROIC stands at -93.11%, which is significantly negative. This indicates that the company is not generating sufficient returns on its invested capital. In contrast, its Weighted Average Cost of Capital (WACC) is 18.11%, showing that the cost of capital is not being covered by returns.

Comparing Jumia to its peers, fuboTV Inc. (FUBO) has a ROIC of -0.02% and a WACC of 11.92%, resulting in a ROIC to WACC ratio of -0.0018. Although negative, fuboTV's ratio is the least negative among the group, suggesting it is closer to covering its cost of capital than Jumia.

Fastly, Inc. (FSLY) and Nano Dimension Ltd. (NNDM) also show negative ROIC to WACC ratios of -1.28 and -0.83, respectively. These figures highlight the challenges these companies face in generating returns above their cost of capital, similar to Jumia's situation.

Workhorse Group Inc. (WKHS) and Blink Charging Co. (BLNK) have ROIC to WACC ratios of -1.39 and -7.76, respectively. Blink Charging's ratio is the most negative, indicating significant challenges in capital efficiency. Despite these challenges, fuboTV's relatively better position in terms of capital efficiency stands out among the peers.