Pizza oven maker Ooni filed their 2022 financials with the Companies House, the UK version of the SEC. Their were highs and lows from their financials, with revenue being flat but none of that flowing to the bottom line.
Ooni Financials
CookOut News being a US based publication, I went ahead and converted their financials to USD with a conversion rate of 1.22. I’ll reference the financials in USD.
It’s impressive that Ooni managed to keep revenue flat for 2022 at $254 million. That’s a real win considering what the rest of the outdoor cooking industry went through coming out of the pandemic. They effectively held onto the growth that they had in 2021.
The bad news is they went from $55 million in operating profit in 2021 to basically none in 2022. This was attributable to them increasing staffing, and incredibly high freight costs at the end of the year.
In 2022, we have bolstered our resources and technical capability across the company, with average
Ooni Limited – 2022 Strategic Report
headcount increasing 88% to 277 (2021: 147). This investment in people has been evident across all areas of the business, but in particular we have focused heavily on our go to market capability in digital marketing and ecommerce, as well as our international sales teams, to strengthen our relationships with some of the world’s most
well known retailers.
It will be interesting to see how they fare in future years with the increased staffing. They staffed areas that traditionally lead to revenue growth, but they just held onto revenue for the year. That’s still an accomplishment, but it would be concerning if they can’t do 2021 levels of margin under the new staffing model.
Along with a planned increase in headcount and general operating overheads to support the group’s longer term ambitions, this decrease was driven principally by the
Ooni Limited – 2022 Strategic Report
exorbitant global freight rates experienced between late 2021 and the end of 2022. Combined with detention charges incurred as a result of port congestion, door to door inbound freight rates peaked at up to 15 times the pre-pandemic
averages. We are relieved to see rates return to normal as of early 2023.
Inbound freight costs was something all outdoor cooking companies were dealing with in 2022. It’s not surprising Ooni’s profitability was crushed by that, just like everyone else. You can see on their income statement that increased distribution costs ate up 10% of additional margin for the year. It’s good to hear that things improved for them in 2023.
As a company that has seen rocket like growth over the past few years, breaking even on the year is something to celebrate. With a normalized shipping environment, they should easily have profitability in 2023.
On the debt side, their revolver is up for renewal in 2024. They said that they don’t need the same level of borrowing that they’ve had.
The Group’s revolving credit facility is due for renewal in February 2024. Based on forecasts, and sensitivities, it is unlikely that a similar facility that is currently in place will be required, however the
Ooni Limited – 2022 Strategic Report
directors are confident that an appropriate facility will be in place to succeed this lending.
Lowering their borrowing and capacity would be good in this interest rate environment. Interest expense is the only non-operating item I included from their financials because it became more material to their business in 2022.
They drew $34.9 million on the credit facility at the end of the year. This led to interest expense of $1.755 million, compared to basically nothing in 2021. They’ve since lowered their credit facility limit, and have paid down much of their debt.
Charitable Pledge
An admirable aspect of Ooni’s business is they converted to a Certified B Corp last year. They also have committed to donating 1% of global revenues to charitable causes. In 2022 they spent $0.2 million on social and environmental causes, planting over 800 thousand trees with the Eden Reforestation Projects in Madagascar. The remainder of their 2022 pledge will be donated in 2023.
Future of the Business
While 2022 was a weird year for everybody in the industry, Ooni says that they performed well for all of their internal metrics.
The group reviews a range of short and medium-term performance indicators. These include: detailed performance metrics of web sales such as conversion rates, cost per customer acquisition and average transaction value; customer net promoter score and employee net promoter score. In 2022, the group performed strongly across all of these measures, driven by our continued excellent revenue results, demand for our products, and product price increases,
Ooni Limited – 2022 Strategic Report
as well as continued investment in the business and our people.
Ooni doesn’t plan on there being significant revenue growth in 2023, but they have had some well received product launches. They brought their oven inside with the Ooni Volt and made some big upgrades for the Ooni Karu 12G.
We do not anticipate 2023 to bring significant revenue growth, but will spend this time building new retailer relationships, launching products and strengthening our team.
Ooni Limited – 2022 Strategic Report