Schou Achieves Record Revenue

Wholesaler Set Billion Record Last Year, But Earnings Took a Big Dip:

CEO Points to the Reasons.

Can you be dissatisfied with the yearly result when you make over three billion kroner in revenue and earn 210 million kroner? According to the CEO of Schou Company, the largest non-food wholesaler in the Scandinavia, there is room for improvement.

Kolding: Recently, the logo on the gigantic 100,000 square meter warehouse at the Kolding South exit on the E45 freeway was lit up. The logo clearly shows that this is where the non-food wholesaler, Schou Company, has its new main warehouse.

The warehouse plays a crucial role in optimizing the company's ability to store thousands of products that Schou Company distributes for major players like the Lars Larsen Group, Salling, and several others. Apparently, there was record activity in both the Kolding warehouse and the company's other operations, as Schou Company's previous sales record from 2022 was surpassed last year.

In 2023, net sales were 3.1 billion kroner, an improvement of 153 million kroner, according to the company's latest financial report.

Looking at the historical growth chart, it's a significant improvement from just a few years ago. Gotfred Christiansen, CEO of Schou Company, is satisfied with the year. Despite the record-high revenue, it was harder to keep earnings on the same upward trend. Earnings fell by 43 million kroner to 210 million kroner before tax.

• With several Scandinavian customers, we saw a slight slowdown and inventory buildup, which ultimately caused our earnings to dip slightly. Additionally, we have hired many new colleagues in recent years to keep up with growth, which naturally comes with additional costs, says Gotfred Christiansen and adds:
• We also implemented a new ERP system (software that integrates and manages a company's processes for finance, HR, production, procurement, warehouse management, and sales), which is a significant investment continuing into 2024.

Earnings Must Increase In other words, Schou Company has been operating on two fronts in recent years. On one hand, both revenue and earnings have increased significantly, and the number of employees has grown from 267 to 366 in four years (as of 2023).

On the other hand, the wholesaler has incurred large expenses to establish its 100,000 square meter warehouse. Originally, the company only planned to use half, renting out the rest. However, by consolidating its warehouses from Denmark, Germany, and the Netherlands in Kolding, the wholesaler ended up needing 90,000 square meters itself.

• When consolidating so much warehouse space, you inevitably have double warehouse costs for a period, which affected key figures last year. The warehouse has gotten off to a good start, but it will probably be in 2024 and 2025 that we will see the full benefits of Vision Park's economies of scale.

Another area expected to improve in the coming years is the company's profitability. Schou Company A/S is partly owned by the Schou family, led by businessman and Kolding Citizen of the Year 2022 Jørgen Schou, and partly by the Lars Larsen Group. Both owners naturally expect the wholesaler to also improve its bottom line.

• All owners want to see growth, and so do we. Therefore, all employees are working hard to ensure our earnings keep up with our revenue, and we have all the prerequisites to achieve this. We have ambitious growth goals, and I am confident we will reach them, explains Gotfred Christiansen.

Adding Value One area where Schou Company has especially progressed in recent years and where the CEO sees further growth potential is the service the non-food wholesaler provides around the products on the shelves.

A concrete example is the photos and marketing materials that Schou can deliver from the new main warehouse. Inside the warehouse is a large photo studio where pictures are taken of everything from lawnmowers, garden furniture, and air fryers, which will eventually be sold to customers.

• Our main goal is to make the task easier for the buyers in the companies we work with. Therefore, we have significantly increased our service around the products in recent years. This creates value for customers and makes their sales work easier. I see even greater growth opportunities here in the future, and we want to position ourselves even stronger in this area, says Gotfred Christiansen.