Ladies and gentlemen, welcome to the Michelin conference call. The conference call will be conducted by Mr. Yves Chapot, General Manager and Group CFO. You are able to download the presentation from Michelin corporate website. I now hand over to Mr. Yves Chapot. Gentlemen, please go ahead.
Thank you very much. Good evening, everyone. Welcome to our quarterly conference call. In the next 20 minutes, I'm going to comment our first quarter sales figures and the outlook for the full year. Before the conflict in Ukraine, our operations were already heavily disrupted and we suffer, as you remember, all along 2021, we were challenged to operate smoothly our manufacturing and supply chain operations. Ukraine invasion by Russia has put an additional pressure on an already tight supply chain. In this context, we have been able to post a 19% revenue growth at EUR 6.5 billion. The markets were, let's say, generally up in Q1.
The passenger car and light truck tire market grew by 2%, with a 6% drop in original equipment, mostly in Europe, when the replacement segment has trended upward at +4% globally. The truck tire market expanded by 4% outside China, but has plunged to a steep -37% in China, both in original equipment and replacement. Specialty markets remain robust in all segments, with a strong underlying demand in mining and in a market which is still limited by supply shortages. Overall, if we look at the quarter, January and February were pretty dynamic, while March was hit by the impact of the conflict in Ukraine and the resurgence of the COVID in China.
Against a very strong comparison in March 2021, which was very strong because most of the tire manufacturers implemented their first price increase as of April 2021. Our 19% growth at EUR 6.5 billion is coming from, of course, a positive currency effect of 3.4 points triggered by mostly the USD, 11.9% gain from price increases which were designed to offset further cost increases, a 1.6% increase in the mix effect reflecting both the growth in the 18-inch and above segments for the SR1 and the favorable original equipment and replacement mix in the SR1 in the automotive division. Volume growth was at 0.5%, mostly limited by multiple operational disruptions.
We gained 0.8 point coming from external growth, mainly the consolidation from January first of Allopneus. A strong increase nearly 12% in non-tire sales, which contribute at the rate of 0.7 point to the overall group growth. The group maintain its guidance for 2022. We have repeatedly commented about supply chain disruptions, the manufacturing operations disruptions during, let's say, since basically September 2020. The situation has, let's say, intensified during the first quarter. First, at the beginning of the quarter, we were impacted by the Omicron COVID wave in Europe, in North America.
Now, of course, with the propagation of the virus in Asia and particularly in China, there is additional bottleneck that has been created in both our own operations and from our suppliers. Transportation is still very tight, maritime shipping but also the scarcity of truck drivers in a lot of regions in the world. The conflict in Ukraine exacerbated the situation as a lot of truck fleet in Europe were relying on Ukrainian drivers. Of course, prices have been up not only in raw material but also in logistic services, in energy input and in other, let's say, kind of operating costs.
In this context, labor shortage have been, let's say, easing, and particularly in North America, where we were able to rehire and train people in order to grow our capacity, our available capacity in our North American factories. At the same time, we have seen a lot of disruptions, the three-week truck driver strikes in Spain, social unrest most recently in Sri Lanka.
If you look at the market forecast that we have shared with you at the beginning of the year when we issue our 2021 full year results, you see that basically, except if we look at the month of February, but both for truck tire and passenger car and light truck tire markets, for the three first months, we were, let's say, in the lower part of the range that we indicated. That's across the board, of course, for passenger car tire market and excluding China for truck tire market. Looking now at the bridge of our sales, scope effect is bringing EUR 44 million, so 0.8 points of growth. Volume, 0.5 points.
We have a 13.5% price and mix effects, of which 11.9% are coming from prices. It's a major contributor of our growth, EUR 736 million for the quarter. Non-tire businesses contributed to EUR 39 million or 0.7%. Currency, as I said, mostly US dollar, at the rate of EUR 186 million or 3.4%. Looking at the growth per business segment. The first segment, automotive, grew by 20.8%, of which volume represents 0.2%. We have implemented in this segment as well as in the SR2 a very dynamic price management.
Of course, the segment is penalized by the index business in original equipment and the original equipment market itself has been impacted by the shortage of spare parts and the multiple disruptions, particularly during the second half of the quarter. In the second segment, we have very strong sales as well, +20.6% in revenue and +2.6% in volume. Our sales were impelled by responsive pricing management and continued expansions in our fleet management solutions, with a very strong demand in Europe and North America, particularly, and the Americas, both North and South, and a focus on high-value market segments. The third segment grew by 13.7%, as this segment is mostly built of indexed businesses with a strong lag effect in the pricing.
Of course, higher level of disruptions both from the upstream and downstream supply chain. Just as an example, the mining, our mining operations are relying mostly on manufacturing from North America and Spain, where we have been recently impacted by the truck driver strikes, which have blocked Spanish port during several weeks. Strong congestions in North America, particularly in the East Coast ports. Regarding the conflict in Ukraine now. As a company, we condemn unequivocally any violations of international laws. The group has, of course, first care about its employees in the two countries and their safety has been our first priority.
We are fully complying with the sanctions that have been adopted by the international communities in each country where we operate. Our overall exposure in Ukraine and in Russia are the following: We employ nearly 1,000 people, of which 750 are employed in our Davydovo factory nearby Moscow. The factory itself represents less than two million passenger car tires production per year, which is nearly 1% of our group automotive tire worldwide capacity. The plant operations were suspended from mid-March, and the region represents around 2% of our group sales, represented 2% of our group sales in 2021. Our financial exposure, looking at our balance sheets, was at the end of 2021, EUR 200 million, of which EUR 40 million in fixed assets. This exposure has not fundamentally changed by the end of March.
The impact of the conflict is first from cutting production that we decided in a preventive manner in order to anticipate potential disruptions and to have a monitored shutdown instead of a disorganized shutdown, around three days on average during the month of March.
I would like to take the opportunity to underline the huge efforts made by our teams in all departments, factories, logistics, supply chain, upstream, downstream, purchasing, R&D, in order to find solutions to source the raw materials that we were previously importing from Russia, more particularly the carbon black, but also some synthetic rubber grades. Of course, the third impact is inflation that has been exacerbated by the conflict, mostly in raw material and in energy, particularly mostly in the European region. Regarding the guidance. We are set for the three segments, the growth range, market growth range that we shared with you early February when we disclosed our full-year results.
From 0.4% for passenger car and light truck tire, with probably continuous supply difficulties that are going to continue to impact the original equipment market. Replacement global demand remains high, without, for the time being, significant inventory rebuilding on the dealer side. But we consider that this market range will have probably to look at the lower part of the range. Probably more between 0.2% than 2.4% for the full year. The truck tire market is expected to grow between 3.7% to 7% outside China.
Here also, we believe that we should more or less expect to land at the lower end of the range for the full year, with very strong demand both in OE and RT despite some new supply difficulties, particularly on the original equipment. Specialties businesses should also grow between 6%-10%. Looking here also at the lower part of the range, demand should remain robust, particularly for off-the-road tires and mining tires. We believe that both oil price crisis and COVID supply chain disruptions will continue to complicate operations, and particularly till the end of the first semester. Our 2022 scenario is maintained. We are aiming to grow in line with the market all along the year. We will have strongly negative cost impact.
As I said, the crisis and the war in Ukraine is exacerbating inflation. We are computing probably an increase of inflation in the range of EUR 1 billion above what was already expected before the crisis in Ukraine. We are looking to have a neutral net price mix, raw material manufacturing and logistics performance effect for the full year. Considering all these elements, we maintain our guidance which consists in looking to achieve a segment operating income at constant exchange rates above EUR 3.2 billion and a structural free cash flow above EUR 1.2 billion in a context which is pretty challenging. The group has demonstrated the robustness of its business model.
The way our teams are handling this very difficult and chaotic situation is remarkable. That's the end of my short presentation, and now I will be available for your questions.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. Please be sure to be in a quiet area and to have a good connection before asking your question. Thank you. We have a first question from Gabriel Adler from Citi. Sir, you go ahead.
Hi. Good evening. Thanks for taking the questions. My first question is on the logistical issues that you're facing. Could you please provide us an update there on your sourcing of carbon black, but also the shipping issue in the mining tires, which negatively impacted the margin last year? An update on when you expect that to be resolved would be very helpful. My second question is on the cash flow guidance. The definition of free cash flow excludes the impact of changes in raw mats on working capital, and I'd suspect that the value of your inventory would be increasing mechanically because of inflation. Could you therefore help us understand whether your expectations of free cash flow has changed compared to February if you were to include the impact of inventory revaluation? Could you quantify this impact, perhaps?
My final question is on demand. Are you seeing any customers across any of your brands trading down to cheaper tires? How much price elasticity do you believe still exists within the business at these levels? Thank you.
Okay. Thank you, Gabriel. It's a lot of questions, very different. Regarding logistics, we add nearly 30% of our carbon black, which was previously sourced from Eastern Europe, and a minor share of some synthetic rubber. Since the beginning of this new crisis, which is a crisis which is adding to existing ones, our teams have secured new sourcing from, let's say, our existing suppliers in, let's say, other regions. I don't want to disclose the origins of these suppliers.
Of course, we have on top of that to secure the shipping and the transportation of these materials to our factories that are mostly, here we are speaking mostly about the sourcing of our European factories. Our factories outside Europe, we are not specifically relying on Russian raw materials. It has a slight impact on the sourcing. That's why we have decided preventively, in order not to have to do that in a, let's say, under the panic, we have preventively reduced our production by around three days during the month of March in Europe in order to manage our operation in the, let's say, smoother manner as it is possible in such a context.
Regarding the working capital, of course, you remember well last year we had an impact on the working capital on our free cash flow, which was in a range of around EUR 300 million. It's extremely difficult to anticipate it. We are very well equipped to calculate it afterwards, because of course you have the impact of the prices on the inventories, but you have a positive impact on the accounts payable and a slight negative impact on the receivables because of the price increase. There will be an impact, but we maintain our structural free cash flow guidance. We have not yet to answer to your third question.
We have not yet seen any trade-off from customers from tier one towards tier two brands. We are observing in some markets, not everywhere, let's say a polarization of the market, tier one remaining relatively resilient and some tier two brand being trade-off against tier three offers. At this stage, we have not observed a huge switch in, let's say, the market tier.
Thank you. Next question from Tom Narayan from RBC. Sir, please go ahead.
Hi. Yes, Tom Narayan, RBC. Thanks for taking the questions. Pricing obviously was a big factor in the quarter, contributing 12% to the sales growth. Curious if this alone was enough to offset raw material and energy cost inflation in the quarter. I believe you did another price increase on April 1st, which I think was the fifth price increase, and that there could be a sixth one. I know the price increases were staggered in 2021 and 2022, but could you help us understand what level of price growth we could expect for full year 2022 if we do get this sixth price increase? Secondly, it's a quick one. It's just could you remind us what the exposure is to the Chinese lockdown situation? Thank you. Bye.
Maybe I will start with the last question, the last part of your question regarding China. You know that China represents approximately 6%-7% of our revenue. Our factories there have been shut down, let's say from mid-March. One factory already restarted production, the one we have in the north, the biggest one. The second one that are in the. The two second one is a steel cord factory, the other one is a passenger car tire factory in Shanghai, are still closed for the time being. But we believe that we should be able to restart production early May, according to the information we have. Of course, it has an impact, the situation has an impact on the demand in China.
Although the demand at least in some segment, particularly for the passenger car division, was still strong during the two first months of the year. Your question about prices. We have close to 12% price effect during the first quarter. Keep in mind that in 2021, we have strong volume effect on Q1, and then we have price effect starting from Q2. Of course the comparison both for volume and price will move along the year as we have gradually increased price and we have implemented three price increase between Q2 and Q4 in 2021.
We have announced and implemented a price increase in April, and in some business segments we have already announced to customers further price increase in May or in June. That's for the replacement market. We must also take into account that we have roughly at the group level 30% of our sales that are commanded by contracted index clauses. These clauses were historically well covering the raw material evolution, and our teams have been renegotiating with a reasonable success the inclusion of energy and transportation with the different customers.
For example, we have a yearly transportation clause that is going to play for the mining business in July, as it played last year already, but in a lesser extent, because we have one year of transportation inflation behind us. Overall, the first quarter, the price increases cover inflation overall, taking into account that we have some businesses with this lag, the price lag due to the indexation. We believe that for the full year, inflation should land in a range around EUR 2.4 billion. When we publish the 2021 full year results, we were more in the range of EUR 1.2 billion, slightly above EUR 1.2 billion.
The crisis in Eastern Europe has triggered an additional EUR 1 billion of inflation, of which nearly 80% is coming from raw materials and the rest from energy and transportation. That's the assessment for the full year. We believe that with the price increase that we have already announced, we are able, plus the gain of the indexation clauses that are going to play during the third and the fourth quarter, we are equipped to fully hedge inflation. Next question.
Thank you. Next question from Giulio Pescatore, from Exane BNP Paribas. Sir, go ahead.
Hi. Thanks for taking my question. The first one I want to go back on mining, if that's okay. Y ou talked about all the issues you faced in Q1, but those issues seem largely resolved by now, in Spain and in North America. You said you're being able to hire people. When can we expect a meaningful acceleration in volume? Is that gonna be possible already in Q2 or Q3, or we have to wait for the end of the year? Then the second question in terms of breakdown of costs, I think, you've just given us some numbers. Can you maybe repeat it? Because I didn't quite catch the breakdown of the cost between how much is logistics, how much is raw material, how much is energy. That would be super interesting.
Maybe a last question on SR2. On the truck segment, you mentioned that you've been able to expand the fleet management solutions quite meaningfully. Can you maybe help us quantify the benefit of those activities? How should we think about margin for those activity compared to the normal tire business? Thank you.
Okay. Regarding mining, we are expecting a strong volume effect from the Q3. We might be able to see some of that already at the end of the Q2 in June. We have been able to rehire the workforce that we were lacking in our North American operations, our North American factories. The Charleston port is pretty congested. We had, following the trucker strikes in Spain, a lot of containers that were blocked in a Spanish port. You know that the end market for mining are Australia, South Africa, South America. With a long shipping delay.
If we look at our overall inventory situation, at the end of the quarter, we have nearly 30% of our inventories that were in transit, so mostly on boats or in a truck. Inflation breakdown. I mentioned our rough estimation for the full year is around EUR 2.4 billion. Most of it is coming from raw material. First, the increase since the crisis in Ukraine is around EUR 1 billion. Most of this is coming from raw material. We are expecting an effect on energy in the range of EUR 500 million for the full year. If you take all transportation inflation, we should be in a range of EUR 300 million-EUR 400 million.
Plus some other, like a bit of labor cost inflation or, let's say, other cost of operations might represent a bit more than EUR 100 million. Regarding SR2 and fleet management, in term of numbers of the in euros, it does not represent a huge amount. Our yearly turnover is in the range of EUR 200 million. But in term of number of vehicle under contract, we are now above 1.1 million. It's an activity which provide us recurring revenue and strong relationships with the fleet.
Thank you. Next question from Martino De Ambroggi from Equita. Sir, please go ahead.
Thank you very much. The first question is on the free cash flow guidance. Just to understand if you have an underlying assumption of CapEx always in the region of EUR 1.9 billion recovering the roughly EUR 100 million you didn't spend last year, or if it's embedded already a reduction in CapEx and maybe to offset the working capital you mentioned before.
Okay. No, at this stage, we have not planned to offset the increase of working capital through the free cash flow, through the reduction of capital expenditure. At the end of the quarter, we are in line with our yearly plan, which is to spend nearly EUR 1.9 billion. As you mentioned, there is this catch-up effect from the CapEx cost cut that we have implemented in 2020 and 2021. The challenge is also in implementing CapEx due to supply issues. We have strong ambition in terms of digitization in our factories, Manufacturing 4.0, which need a lot of new technologies, a lot of computerized technology.
There is a lot of microcontrollers that are today very difficult to source. The main challenge regarding CapEx is a bit of inflation in the CapEx and at the same time some let's say operational disruptions in the achievement of the project. At this stage, we did not decided or betting on any reduction in our CapEx for 2022. Next question.
Thank you. Next question from Sascha Gommel from Jefferies. Sir, please go ahead.
Good evening. Thanks for taking my questions. I've got three. The first one is on inventory levels. In your press release, you state that there was a bit of pre-buying, which is why you underperformed the markets a little bit in SR1 and SR2. Does that imply that the stock levels in the channels are back to normal, or are there still regions and/or segments that are not fully stocked? That would be the first. The second one is on pricing. Are still all major tire manufacturers following the price increases, or do we see first signs that some might actually use not to follow as a way of gaining some market share? The last one of your competitors in winter tires obviously has some major problems related to Russia.
Is that giving you an opportunity to gain market share in very profitable segments across Europe?
Okay. I will start by your third question. I think it's far too early to see what will be the supply situation regarding winter tires, particularly in the European market. We are just in April, so that's probably more a question that we'll be able to answer during the summer or at the end of the summer. The stock level, if we observe the stock level at our distributors, they are roughly in line with normative, with some let's say quality issue in inventory. Some categories are under stock and that's creating a tension. We have some backorders and relatively high backorders compared to historical level.
That's true that in Europe, particularly in Europe, during the months, we had a very strong month of December for passenger car and truck tires. If we look at the balance between the selling and the sellout during the first quarter, this slight, let's say, inventory rebuilding that has been done in end of 2021 has been absorbed by the growth in demand during the first quarter. The situation regarding inventory is not particularly worrying from our standpoint. As far as pricing is concerned, we have not seen any, let's say, what we can observe is that generally, price increases which are announced are implemented by our competitors.
For the time being, we have not seen any, let's say, major competitors not implementing price increase.
Thank you. Next question from Christoph Laskawi from Deutsche Bank. Please go ahead.
Good evening. Thank you for taking my questions as well. Two, if I may, please. The first one will be on inventory levels that you keep of raw materials in Europe. Given that you have changed regions from which you source, for example, carbon black, and usually you are relying on shipping to get the goods, do you structurally change the approach to stock inventory at your plant? Shall we expect in the near term, at least, elevated inventory levels, which potentially ease then towards the end or early next year when the shipping and the available slots for shipping are normalizing? That's the first question.
The second question would be, just because you have, well, so far, you face minor production stops, there might be a potential for competitors to grab a bit of market share. Could you comment if you've seen a slight deterioration of market share in Europe, and if that will be sticky or not into the coming quarters? Thank you.
Okay. Our inventory, if I look at the raw material, are back at, let's say, normative level. But the challenge is that we are supplying a lot of raw material, particularly natural rubber, but not only natural rubber, from very remote area versus our factories location. What we have observed is that because of the overall disruption in the shipping industry, the slowdown of the delay between the different ports, the slowdown of the boats, we have also, for raw material, a higher share of our raw material that are in transit than before the crisis. We have seen, let's say, the delay increasing, the percentage I indicate previously for finished product.
Basically, we have seen roughly 10% of our inventories switching from, let's say, in location in the warehouse to in transit. We have observed, let's say, a similar shift for raw material. It has not today, for the time being, fundamentally changed our inventory policy because we have, you know that before the crisis, we have a long-term plan in order to reduce our inventory. That's a strong headwind that we are facing. At the same time, we are committed to implement the optimization measures that we were planning before the 2020 and now 2022 crisis. Regarding your last question about production, overall, we have been able to stabilize our market share.
Of course, if you look in some segments, we are growing faster than the market. In some segment or some geography, we are more penalized by production or shipping disruptions. As we mentioned during a previous call, it's probably in the third segment that we suffer the most from our operations disruptions. Overall, if we look at SR1 and SR2, globally, we are able either to maintain or sometimes to grow our market share.
Thank you. Next question from Jose Asumendi from J.P. Morgan. Please go ahead.
Thank you very much. Just a couple of questions, please. Can you comment a little bit around the penetration of tires for electric vehicles or the 18-inch plus segment? How is that evolving within your SR1 division, across OE or replacement? If you can give us any numbers there. The second one, are you seeing, as a result of this inflation cost or inflation rising, an impact on miles traveled either on cars, on trucks or on your customers? Are you starting to see some deceleration of the activity?
Three, if you could comment, please, within SR3, can you comment please on agricultural and aircraft tires, how the demand is evolving across those two divisions, please? Thank you.
Regarding EV tires, we are observing the same trend that we have commented during the 2021 full year announcement. We are also observing a continuous mix enrichment. Basically, you remember every quarter or every period of the year, we have for the past 5 years the share of 18-inch and above or premium segment, let's say, increasing by roughly 3 points, 3-4 points in our overall sales. We continue to observe a similar trend during the first quarter of 2022.
Basically, if I remember well, our share of 18-inch tires at the Michelin brand in our overall SR1 sales has been topping slightly above 51%, during the first quarter, which is 3-4 points more than the first quarter of 2021. For the time being, we have not observed. Of course, except what is happening currently in China with the lockdown, we have not observed a drop in miles traveled due to inflation. Actually, it's too early to detect any kind of such signals. Regarding SR3, I understood that you wanted me to comment the situation in agriculture and construction. These markets are still pretty dynamic.
We are also here being penalized by the operational disruptions. For example, we have for both agricultural, construction and material handling when we acquired Camso huge operation in Sri Lanka that has been impacted by the issue there, cut off electricity supply, difficulty to supply. Despite this challenge, the teams are doing their best. Overall, we consider that in this segment of the market we are also in line with the market trend.
Thank you. Next question from Thomas Besson from Kepler Cheuvreux. Sir, please go ahead.
Thank you very much. Good evening. I have still two questions, Yves, please. Firstly, do you still expect the SR3 profitability to rebound during 2022 while we may see a slight decline in SR1 and SR2 margins? Have you already seen that inflection, or should we wait to see the volume rebound you've mentioned in mining from June and the transportation indication to get into action to see that? The first one. The second, could you discuss the potential tailwind from the difficult situation of your competitor Nokian in Russia? Should you benefit from that in the forthcoming winter tire season? Do you expect the competition, including yourself, to be able to compensate their potential volume shortfall?
Okay. Thank you, Thomas. For the first one, SR3, we're still expecting that the overall segment profitability will recover during the year, and that we will be able to post higher operating margin for the full year of 2022 versus 2021. We are expecting most of the recovery to happen from July onward. First, because we believe that we are going to have put back all the, let's say, supply disruptions that we have been experiencing.
Don't forget that, for example, the rehiring of people in our North American operations has not an immediate effect because you have some time for training and we are now back gradually at the, let's say, available capacities that these factories should be able to produce. Second, we'll have due to the lag effect a strong price effect from, particularly for the mining business, on the second half of the year. Tailwinds.
There are some tailwinds, but honestly, as I said earlier, it's too early to comment what is going to happen, particularly in the European market with the competitors you mentioned. I'm not going to comment anything about this competitor, and it's too early because the winter season for selling is starting, let's say, during the summer, but mostly now in September. Then we will see, let's say, during the month of September what is going to happen. Let's say the main. As we did for our pricing for the past six quarters, in such a context, agility is the must and the ability of our teams to benefit from some situation.
The difficulties we have, for example, the fact that we stopped delivering, exporting tires to Russia, is also providing an opportunity for particularly our mining business to redirect these capacities to market where we have important back orders. It's really in the managing quarter by quarter, both our supply chain and our pricing that we should be able to achieve our 2022 target.
Thank you. Next question from Philipp Konig from Goldman Sachs. Sir, please go ahead.
Yeah. Thank you for taking my question. I've just got two left. My first one is just coming back on the pricing against inflation. Very helpful, you mentioned earlier that you're seeing a full year impact of around EUR 2.4 billion, which equates around 10% of last year's sales. You've now done a price mix of 13.5% in the first quarter. I know that the comparable is obviously getting more difficult as the year progresses, but you've just done another round of increases, price increases in April. You have indexation clauses kicking in in the second half of the year, and a potential comeback of the high margin mining tires.
Is it fair to assume that a neutral effect against the EUR 2.4 billion is more seen as a flaw and you potentially could even have a positive effect? My second question is just on the sourcing from Russia. You were mentioning that you are resourcing the 30% of carbon black that used to come from the region. Can you just comment on when you expect to be fully resourced outside of Russia, and where will you be buying the carbon black from? Thank you very much.
Okay. Maybe I start with the second half of your question, Philipp. I'm not going to indicate where we're going to source the carbon black, but basically, we should be able to be completely resourced between early and mid-June. We should be completely resourced and not rely anymore on any raw material coming from Russia. Regarding the price effect, as I said earlier, we ask our teams to monitor their margin quarter by quarter and to make sure that at the beginning of each quarter, we have positioned ourselves in such a way that we are going to hedge inflation.
At the end of the year, we might land with, let's say, a slightly positive effect, but our overall objective is to hedge inflation. We'll see at the end of the year where we will land. Of course, we try to keep for ourselves part of the mix effect as we did last year. But we have seen, for example, in the last quarter of 2021, a surge in energy prices that were extremely difficult to anticipate or impossible to anticipate. That's why we are always present on that side, and we prefer to commit to hedging. If we're able to do more unhedging, it will be welcome.
Thank you. Next question from Edoardo Spina from HSBC. Sir, please go ahead.
Good evening. Thanks for taking my two questions. The first one is on the currency, and I wanted to ask how this item will evolve throughout the year, according to your current estimates, of course. A lso how this is affecting the different segments, if possible. The second question is on the general market share. Looking at your more direct competitors, we may look into the financials and suspect that there is some attempt to gain market share in the tier one segment. Can you confirm if you see any pressure on the upper end of the Michelin brand range in any part of the world? Thank you very much.
Regarding the Forex, as I said, we should have most of the effect during the first three quarters as the dollar has already started to revalue, particularly versus euro, during the last quarter of 2021. Keep in mind that if you look at overall, let's say, revenue, we have a large chunk that is built in USD, similar share coming from euro. Then after, I think you have the Chinese RMB, which represents 6%, and then we are, let's say, in a lower share. Most of the effects should come from the dollar. At the same time, when the crisis in Ukraine started, we have seen also some currency moving sharply.
Not to mention the Turkish lira, for example. Regarding market share, we are basing our overall guidance on the fact that we should be able to grow at the market pace. We have not yet seen any specific, as I mentioned earlier, huge switch from tier one to other market tiers. We rather expect the tier one market to be resilient, as even if, let's say, we are obliged to increase prices to hedge inflation, our tier two and tier three competitors are facing the same situation.
Thank you. We have a new question from Martino De Ambroggi from Equita. Sir, please go ahead.
Thank you, Yves Chapot. I had a second question. On the market trend, can you provide the trend of sales volumes very roughly in March standalone? Because you had both the war in Ukraine and the lockdown in China, and as you mentioned, March was a different month compared to the other two. Because I don't know if there is a risk. I know you are already guiding at the low end of the ranges for each segment. Do you feel there is some of the three divisions that is more at risk than others in terms of volume growth for the full year because of the ongoing trend?
Not particularly. There was, of course, in March, also a sort of maybe, particularly in Europe, a consideration effect due to the end of Feb and early March due to the start of the war on the European territory. At the same time, we have seen, let's say, later on some market recovering. As I said earlier, we have started the year on a, let's say, pretty overall positive mood, both in Jan and in Feb. There was a, let's say, slowdown in March, which was mostly, if I look at our overall volume, coming from Eastern Europe and China. The Chinese situation is going to end, probably somewhere during the month of May.
Of course, our April revenues will be impacted. As I said earlier, we should be able to redirect the volumes that we are exporting to Eastern Europe, to Russia, towards other markets. For the time being, as I said earlier, we are rather now considering the lower part of the range regarding our market growth assumptions, and practically from all the segments. We still believe that the market should post a positive growth rate at the end of the year, excluding of course the truck tire market in China, which was based on a very different comparison.
Forget that 2021, we have very strong month of March, and then we have a relatively bad third quarter, and then a slight rebound in at the end of the year. So seasonality from one year to another might look very different between 2022 versus 2021.
Thank you.
I think it's last question. Thank you very much, ladies and gentlemen, for your attention. We are looking forward meeting you at our shareholders' meeting on the 13th of May. Of course, later on for our first half result disclosure at the end of July. Thank you very much.
Thank you. Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.