Rocket Internet, owners of Jumia reduce losses in nine months by 12%

Rocket Internet

Rocket Internet, the parent company of Jumia said it reduced its losses for the group by 12% on a year on year basis when compared to last year when its losses rose by 12%.

On a year on year basis, the group’s aggregated EBITDA losses decreased by EUR 48 million.

According to its statement, selected companies in the core sectors Food & Groceries (HelloFresh), Fashion (Global Fashion Group, General Merchandise (Jumia) and Home & Living (Westwing and Home24) continued to show an increase in aggregate net revenue of 28%, reaching EUR 1.85 billion for the first nine months 2017.

HelloFresh, a meal kit company with operations in North America, Europe and Australia, generated EUR 652 million revenue and EUR -64 million adjusted EBITDA in 9M 2017, while improving its adjusted EBITDA margin from -15.1% to -9.8% year-on-year. On November 2, 2017, HelloFresh’s shares started trading on the Frankfurt stock exchange. After the Delivery Hero IPO in June, this was the second successful IPO in 2017 of one of Rocket Internet’s selected companies.

The company said GFG grew net revenue by 26.9% to EUR 767 million in 9M 2017 and NMV, which includes marketplace sales, reached EUR 793 million, an increase of 29.1% over 9M 2016. Operational efficiency improvements were the key driver of the adjusted EBITDA margin improvement from -17.0% 9M 2016 to -10.0% in 9M 2017 (all figures exclude Namshi following the successful partnership with Emaar Malls acquiring 51% in Namshi).

The company said Jumia grew GMV by 32.4% year over year to EUR 236 million in 9M 2017. Q3 2017 saw a strong pick-up in GMV growth of 69.7% compared to Q3 2016, resulting in EUR 92 million GMV in the current quarter.

Online Home & Living company Home24 accelerated revenue growth to 9.7% year over year with 9M 2017 revenue reaching EUR 195 million. Q3 2017 revenue increased by 16.4% compared to Q3 2016, resulting in revenue of EUR 63 million in the current quarter. Home24 also significantly improved its adjusted EBITDA margin from -19.5% to -9.3% during 9M 2017, driven also by an improvement in gross margin by 3.3 percentage points to 43.9% in 9M 2017. Home24 is evaluating various financing options, including potential capital markets options to fund the continued growth of the business. Westwing significantly improved its adjusted EBITDA margin from -9.2% in 9M 2016 to -4.5% in 9M 2017, reducing the EBITDA loss from EUR 16 million in 9M 2016 to EUR 8 million in 9M 2017.

Rocket Internet and its selected companies continue to be well capitalized, with available gross cash and other bank deposits of EUR 1.9 billion at Rocket Internet and additionally EUR 1.0 billion at the selected companies, as of the end of October 2017.

Rocket Internet’s consolidated loss for the first nine months 2017 significantly improved from EUR -642 million in 9M 2016 to EUR -44 million.

“In 2017, two of the selected companies successfully went public“, says Oliver Samwer, Rocket Internet CEO. “We are proud of Delivery Hero’s and HelloFresh’s achievements and would like to congratulate the teams on their success. Rocket Internet’s investments in the Food & Grocery sector in 2014 and 2015 have proven to be a successful investment focus. We will continue to incubate and invest in promising Internet business models and strive to continue to identify attractive investment opportunities.”

Rocket Internet is expected to deliver an analyst conference shortly where it will give depth to the results.