Market demand and market conditions
Developments in global markets, the global economy and politics caused demand in 2022 to be lower than it was in the previous year. However, this decrease in volume was paired with higher price levels throughout the entire year, as a result of which revenue increased significantly. The reduction in volume in particular concerned the tonnages sold directly from stock. This was primarily caused by lack of a number of large projects involving large tonnages. In 2021, several very large projects were still being supplied. However, the total volume from stock turned out to be only slightly lower in comparison to 2021.
At the beginning of 2022, the corona pandemic still played a role. We experienced a high rate of absence due to illness in some countries, which put our delivery process under pressure. The war in Ukraine started in February, which also affected our company in that country. Our initial attention was focused on employees in our Ukrainian branch in Lviv and their families. Our activities were halted for a few months, especially to give our employees the opportunity to provide for their personal safety and that of their families. Over the course of the year, we were able to cautiously resume some activities and deliveries.
A number of orders in progress destined for Russia or Belarus was immediately halted as a result of the sanctions imposed on these countries. However, the total amount involved in these transactions did not form a significant part of our revenue. A lot of time and attention was devoted to precisely identifying the sanctioned customers and suppliers, to be certain as to which business relations had to be terminated. Another consequence of the war was that the supply of components in the automotive segment was severely disrupted. As a result of the faltering supply, a large part of our automotive customers was forced to entirely or partly halt their production lines, as a result of which our deliveries were deferred as well. This persisted up until the summer. For a number of automotive customers we were able to make use of our procurement knowledge and network to find alternative suppliers for materials that previously came from Ukraine. For example, we negotiated a multi-million euro contract for stainless steel materials for a large customer in the Automotive segment in Hungary.
Over the course of the year, market developments in almost all European countries were positive. There was a strong demand in the Mechanical Engineering segment, in part due to the strong market demand for the construction of earthmoving and agricultural machinery. Market demand was also good in the Civil Engineering and Hydraulics segments. The constantly increasing prices had a braking effect on demand, however. Part of the contracts and projects, including in the construction segment and in steel construction, were deferred, because investments at these price levels increasingly became less profitable. After the summer, this was further compounded by the mounting inflation and the increasing uncertainty about the course of the economy. The steadily increasing energy prices constituted an important factor as well. Pressure on markets further increased and a number of customers deferred orders or reduced order volumes. The mounting inflation also played an important role in the daily sales from stock. Most of our European companies ultimately managed to perform better than in 2021, for example in the Benelux, the United Kingdom, Northern Europe, Central Europe and Switzerland.
Due to the major changes on the gas market, the construction of LNG terminals proceeded at a rapid pace throughout the world. Our branch in Houston, Texas, acquired two large orders for supplying materials for the construction of LNG terminals. Our strong stock-keeping position and our ability to deliver to construction sites within a few weeks were decisive in this respect. Our branch in Zwijndrecht played an important role in supplying materials for Gasunie's Eemshaven terminal in the Netherlands. The fast delivery of materials from stock made it possible to quickly connect this terminal to the gas grid.
The energy market continued to pick up in Europe. Our company in Zwijndrecht, the Netherlands, supplied materials for the Water network in Amsterdam. France once again acquired a smaller project for Algeria. In Europe, there is an increasing demand by projects relating to the energy transition, particularly projects related to the production, storage and transport of hydrogen. We expect a strong increase in demand in this segment over the coming years. In addition, the construction of refineries for the production of biodiesel is increasing.
Outside Europe, the energy market is our most important sales area. The market here was moderate at the beginning of the year, but activities in this segment quickly came to life and our branch in Edmonton, Canada, among others, acquired a number of interesting projects. The projects market in Asia also picked up. Van Leeuwen Singapore supplied more than four thousand metric tons of seamless carbon steel pipes to the Chemical Indonesia New Ethylene (LINE) Project; a very large investment in Indonesia by the Korean LOTTE Corporation. Our company in Australia once again performed very well. Due to its extended supply lines, no other country in the world was affected as much by the severely disrupted supply chain as Australia. The branch secured excellent service for its customers through excellent cooperation among our five Australian stock-keeping locations.
Despite the somewhat lagging sales volumes in comparison to 2021, total revenue increased as a result of the strong increase in prices. Revenue was 17% higher than last year. The percentage margin stayed the same, but due to increased price levels, the absolute number increased.
In 2022, our commercial teams in many countries and branches adopted a solution-oriented approach and through their inventiveness managed to find good solutions for our customers under ever-changing market conditions. Solutions covered various areas, such as the daily and timely delivery from stock, jointly with the customer and supplier developing the right solution for the production of a compound pipe and tube product, or the sourcing and temporary storage of materials for customer projects. With the collective knowledge and many years of experience of our people, we always manage to find a solution on the basis of our robust network, the product range kept in stock and by using our processing machines.
Our procurement organization is characterized by a centralized approach with regional hubs, whereby we optimize our procurement strength by using a joint methodology. European procurement managers, other procurement managers and category managers regularly meet to discuss topics, such as the procurement strategy, suppliers and sustainability.
To keep our supply of products and services to various market segments relevant, we constantly work on our level of knowledge and on innovative solutions. For each of the four Industry segments (Mechanical Engineering, Civil Engineering & Construction, Automotive and Hydraulics) we have been working with a Market Acceleration Circle since 2021. Each Circle consists of a team of commercial market experts from different European Van Leeuwen branches. Our Global Project Organization team focuses on the two Energy segments; Process & Power and Pipelines. The colleagues in each team combine their market knowledge, experience and ideas, and this way develop and implement innovative market initiatives together.