The floor, gentlemen. Thank you. Good day to everyone. Thank you for joining us for the disclosure of the 2021 full year results. This year again, unfortunately, this is being done by remote link again. In 2021, Hermès saw an exceptional year, boosted by the strength of its 16 métiers and the strong desirability of its product. First and foremost, I'd like to pay tribute to the passion, creativity and quality of the work of our employees worldwide. For two years now, we've been weathering an unprecedented health crisis, which unfortunately has affected many of us. In this context, it's been difficult and our teams have shown their true commitment all the while.
This is a model based on people, human beings, with permanent ongoing dialogue between creation and excellent know-how to make objects that are made for the long term, with a policy of corporate, social and environmental responsibility, based very much on the talent and boldness of our artistic directors. Think of the momentum of Véronique Nichanian's collections for men's ready-to-wear, and Nadège Vanhée-Cybulski for women's ready-to-wear, and the ambitious creations at the home department, jewelry, shoes, with Pierre Hardy, fragrances with Christine Nagel, Charlotte Macaux Perelman and Alexis Fabry for Hermès Maison. Our model is based on a belief, the importance of education and transmission of know-how, the gesture of the hand via ongoing training, learning our trade for life and being versatile as well. Think of our leather sites and our silk in Lyon.
Everybody at Hermès takes what it takes to pass on their knowledge to the newcomers and to assist in production, all the while remaining faithful to our know-how. The opening of the Hermès Know-How School with the new diploma for leather workers is part of this, also Manufacto and the Hermès Foundation. These are ways of demonstrating our commitment. Since the beginning of the pandemic, Hermès has wanted to act as a responsible actor, showing solidarity to its teams, local governments, partners, stakeholders, and suppliers. Since 2021, we've continued several initiatives that had started in 2020. First of all, with an awarding in France of an increase, EUR 100 gross per month, individual pay increases starting in January 2022.
Worldwide, there's one-time bonus, EUR 3,000, so that we can share the benefits of our growth with all of our employees and demonstrate to them our recognition. Hermès has strengthened its support to the Hôpitaux de Paris, a new donation of EUR 7 million for the training of healthcare providers, in addition to the EUR 20 million grant we provided them with in 2020. Our business model is also based on a strong territorial anchoring, which means creating jobs locally, revitalizing local territories and long-term relationships with all of our partners. It's a unique model. It creates desirability in the eyes of our clients worldwide, and we attach great importance to maintaining this. By way of conclusion, we're proud to be a house of creation, which shows solidarity and is responsible and remains true to itself. Now let's talk about business.
In 2021, Hermès achieved an exceptional year, revenue reaching almost EUR 9 billion, up 42% at constant exchange rates compared to 2020, and up 33% over a two-year period in both the first and the second half. Growth was especially buoyant in group stores, up 44% at constant currencies. Very strong demand and very great involvement of our teams in the stores to serve local customers. In 2021, Asia and the Americas saw the strongest growth, both compared to 2020 and compared to 2019. Europe also resumed growth versus 2019. More specifically, by region. France, up 35%, confirming its recovery. Europe, excluding France, up 37%, booking a good second half. Several stores reopened after enlargements, such as the Rue de Sèvres in Paris, also Zurich and Milan.
Japan, up 25% and up 20% over the two-year period, showing growth in sales that's especially strong and regular, thanks to the loyalty of local customers, in spite of the health emergency that had been enacted up until the end of September. Asia, excluding Japan, up 45% over one year, up 65% over a two-year period, continues its strong momentum, boosted particularly by Greater China, Australia and Singapore. The new digital platform was rolled out in Thailand in the first half of the year. The Americas, up 57% over one year, up 24% over two years, achieving excellent performance in spite of health restrictions in Q4 in several cities of the United States. 2 stores were opened in Detroit and also a store in Miami, Florida. Now, our geographical footprint is pretty much stable versus last year.
It's very well-balanced. Now let's talk about revenue broken down by sector. In 2021, all the sectors confirmed double-digit growth, both versus 2020 and versus 2019, with remarkable growth in the Ready-to-Wear and Accessories and divisions as well as watches and other Hermès métiers. Leather Goods plus 29% for the year, plus 23% over the two-year period, reaching an exceptional level after the beginning of the year that had been driven by strong deliveries at the end of 2020 and an excellent Q3. Demand is buoyant, both for reinvented classics as well as the new models. Production development continues with the opening of the Guyenne leather production site in September. Ready-to-Wear and Accessories up 59% and up 44% over the two-year period, continuing its strong momentum, thanks to the success of the ready-to-wear collections, shoes, and fashion accessories.
The silk and textiles sector up 49% and 15% over two-year period, achieving excellent performance, thanks to the diversity of creation, materials, and formats, and sizes. I'd also mention a new printing line was inaugurated in Pierre-Bénite near Lyon in the first half of the year. Perfumes and beauty, +47% this year, +19% over the two-year period, showing strong growth, benefiting from the success of the new fragrance for men, H24. One year after the launch of Rouge Hermès, we're continuing with the launch of Rose Hermès in the last spring and Les Mains Hermès in the fall. Watches, +73% this year, +77% over two years, confirming excellent performance. Reflecting our watchmakers' know-how, the technical element and creativity in our collections, and the success of the new men's watch H08.
Other sectors, up 57% in one year, up 95% two years. This includes jewelry, art of living, tableware, and this shows their very strong momentum continues. The distribution of sectors remains pretty stable versus 2020. Leather goods in line with growth and production capacity. Ready-to-wear and other accessories, jewelry, achieved excellent performance as well.
As we reminded us, creation is at the heart of our model. Under the artistic direction of Pierre-Alexis Dumas, there's a very rich and varied creation, renewed all the time and nourished by constant curiosity. For example, in the leather goods collection, the success of the models such as the Della Cavalleria, Moss, the Bride-à-Brac, and the R.M.S. suitcase, and the beautiful welcome of the women's and men's ready-to-wear collections, the successful launch of the Calimero IV's jewelry, as well as the opening of new chapters of beauty. Our fruitful collaboration with Apple celebrated its sixth anniversary in 2021. Apple Watch Hermès Series 7 received an excellent reception. Attached to the transmission and dialogue between know-how, we pursue our investments in our production capacity through our regional competence centers.
We construct durable relations with actors of the employment basin locally, such as Pôle Emploi, and pay special attention to training via partnership schools and École Hermès des savoir-faire. In 2021, we inaugurated the leather manufacturing units of Montereau in Seine-et-Marne, and in June in Guyenne, in the Gironde in September. The 18th and 19th leather workshops of Hermès, all human-sized. The work of the leather workshops of Louviers in l'Eure is being pursued for being inaugurated in 2022. We are posing the first stone for the Maroquinerie des Ardennes in the Ardennes, planned to open in 2023, and the Riom project in Auvergne will be opening in 2024. In Lyon, the enlargement of the Pierre-Bénite site to accompany the growth of silk and textile is being pursued. Let's come to our integrated omni-channel and exclusive distribution network.
In an unstable environment, our teams have shown dynamism and creativity to be as close as possible to the customers, rethinking their métier by taking initiatives with the omni-channel logic. In 2021, the operational investments pursued in the stores, allowing for people to discover the collections at the heart of the cities and closest to the local customers. We thus continue the extension of the network in Shenzhen in China, Tokyo, Japan, and Detroit in the U.S.A., as well as through numerous renovations and extensions of stores. The year 2021 confirmed the very strong performance of e-commerce and the pursual of our digital strategy via a wide offering of products which are unceasingly enriched, opening of the new digital platform in Thailand, as well as new services with strong attractiveness. 78% of the E-commerce customers are new customers for Hermès.
The group has thus responded in a flexible and successful way to the strengthening of online sales and users that are ever-evolving. In a new dynamic world, Hermès was able to keep and renew its link with its customers in each country with a multi-local approach. Hermès deeply attached to moments of sharing, to being together, wanted to celebrate the possibility of coming together again while adapting to each health situation. With namely events dedicated to the public at large, such as HermèsFit in Chengdu in China, Tokyo, New York, Paris, around a collection of accessories. Hermès in the Making in Copenhagen, an invitation to the public to meet our craftspersons and discover expert gestures and original client events at the local dimension. The artisanal model of Hermès, strongly integrated, favors creation of employment, qualified jobs, on the territory.
In 2021, Hermès pursues its recruitment and has strengthened its numbers by 1,000. At the end of December 2021, the group employed 17,600 persons, of which 11,000 jobs in France. The enrichment and the transmission of know-how translates the strong commitment of Hermès in favor of training in all the métiers, as has already been mentioned with the CFA and its first promotion in Fitilieu in the Auvergne-Rhône-Alpes region. Hermès is convinced indeed, that the diversity of talents is a source of richness, creativity and innovation with the ambition of going even further as a role as a responsible and committed employer. Women are strongly represented in the group. They represent 60% of the executives, 54% of the top management, and 50% of the members of the supervisory board.
In 2021, we are welcoming the entry into force of the group-wide disability agreement. Our model is based on a very strong vertical integration and local anchoring. The 52 production sites of Hermès are organized by regional expertise centers. On an average, a leather workshop is opened every 12-18 months, which contributes to the revitalizing of the territories in France. The opening of new production sites are made according to three criteria, the respect of local expertise, the preservation of know-how, and the desire to create local jobs. Hermès keeps long-term relations with its stakeholders, namely with its suppliers. We accompany them to attain the level of demandingness that the group has fixed itself in terms of environmental and social impact, namely through the purchasing policies developed in 2021. This year, the house has 530 certified ESG suppliers in France.
This year, we have strengthened our commitments against climate warming. Hermès is structurally low emitter of CO2. Hermès wish to strengthen its policy for the reduction of greenhouse gas emissions. Our trajectory of reduction to 1.5 degrees has been validated by SBTi. This will go through the reduction by 50% of the carbon footprint per sq m of real estate surface and the putting in place of 100% of renewable electricity within the direct operations by 2025. We have renewed our commitment to Livelihoods by supporting the third carbon fund launched on the 30th of June 2021, and the group finalizes the inventory of its impact on biodiversity to the Global Biodiversity Score method and will start special action plans on major scientific subjects identified clearly. Finally, numerous initiatives of reuse have been launched for several years.
All of our métiers have a roadmap in terms of circular economy. The exceptional progression of Hermès in the extra-financial ratings reflects our commitments on the RSE as well as the sustainable dimension of artisanal model. The A rating of MSCI inclusion in the CAC 40 ESG and the classification of Sustainalytics, second-best actor of textile and ready-to-wear. The house is positioned at the leadership level with the CDP evaluation 2021. May I now give the floor to Éric du Halgouët, our CFO, who will present to you the annual results. Thank you.
Good morning, everyone. The group's 2021 results are exceptional, whether you're talking about growth in revenue, current operating income or net income. Operational profitability reaching a record level, over 39% and cash flow generation, especially strong. Now let's look at some of the results in greater detail. As Axel mentioned, revenue at constant currencies is up 42% over 1 year and 33% over 2 years. This organic and virtuous growth includes, in 2021, as in 2020, price increases that are below 2 points. Scope effects are limited. Growth, therefore, is mainly thanks to strong growth in volumes, generating a significant leverage effect on profitability. Improvement in the gross margin rate by 2.8 points, as in the first half, comes from leverage effects on fixed production costs, improved productivity, and also exceptional inventory sell-through rates.
Inventory in our stores end of year reached especially low levels in several sectors such as ready-to-wear, watches, home, and shoes. Communication spending reaching EUR 422 million, which is 4.7% of sales after having stepped this up in the second half. Overheads, which include wages for employees in stores and support functions, as well as variable lease payments, reach EUR 1.7 billion. Although the group speeded up hiring in the second half of the year, the leverage effect is significant, both compared to 2020 as well as compared to 2019. Other income and expenses reaching EUR 734 million, mainly containing amortizations of right to use and intangible assets, also include expenses for granting free shares to employees, EUR 122 million, donations and sponsorships.
EUR 122 million is 8.2% of sales versus 10.9% of sales in 2020 due to strong growth in sales, and we continued our investments all the while. Recurring operating income reaching EUR 3.5 billion, up 78% compared to 2020. Just to remind you, operating income in 2020 included a non-recurring profit of EUR 91 million due to the deconsolidation of Shang Xia. After an exceptional first half, profitability reaching 40.7%, the second half has 38.1% profitability after speeding up hiring and communication spends, as well as a negative currency effect in the second half of the year.
Thanks to very good sell-through rates of our collections and positive leverage effects on fixed expenses, recurring operating profitability in 2021 reaches a record level of 39.3%, growing 5 points versus 2019 and growing 8 points versus 2020. Our financial results, a net expense of EUR 96 million versus EUR 86 million in 2020. This expense includes currency hedging as well as lease debt. Now our tax on profits reaching the threshold of EUR 1 billion. Tax rate 29.5%. Net income from associates demonstrating the good performance of our businesses in the Middle East. Net income reaching EUR 2.4 billion, up 77% compared to 2020. Net profitability reaching a record level of 27.2%.
On this chart, we see an illustration of the strength and buoyancy of sales in 2020, 2021, and a very strong rebound in net income thanks to the leverage effect. In spite of the impact of the health crisis, average growth rate over 10 years is 12.2% for sales and 15.2% for net income. The group maintained its strategic investments in 2020 and stepped up projects in 2021. Operating investments reaching EUR 532 million. EUR 220 million was spent on refurbishments and enlargements of our exclusive distribution network. This amount, inter alia, includes the construction of our future flagship store in New York, Madison 706.
The enlargement of our Milan store in Italy, and also the opening in Japan of the Omotesando store, and also the moving of the Beijing, China World store and extension of Shanghai Plaza 66 in China. EUR 169 million spent on production in the various sectors, mainly leather, but also in tanneries, textiles, and perfumes. Lastly, EUR 143 million invested in IT systems pertaining to supply chain and digital projects, but also for real estate projects to underpin and support the growth of this group. Business-related cash flow reaching EUR 3.4 billion, strongly up in terms of cash flow and a significant drop in WCR.
After taking into account OpEx, which we alluded to previously, and the repayment of fixed lease debt, available cash flow EUR 2.7 billion, which is twice the level of 2019. The group bought back, in the first half, 142,000 shares for the amount of EUR 162 million, paying an ordinary dividend of EUR 4.55 per share, the same amount as the dividend paid in 2020 and 2019. Other transactions in 2021 are a reflection of favorable currency effects due to the uptick of certain strategic currencies towards the end of the year, such as the renminbi and the US dollar. Restated net cash went up by EUR 2.2 billion, going beyond the threshold of EUR 7 billion at the end of 2021.
The dividend proposed for approval at the AGM, slated for April 20, will be EUR 8 per share, which is a payout of 34%, up 76%. As you can see in the simplified balance sheet, the growth in assets, mainly thanks to cash. Under liabilities, the increase in current debt is a reflection of a strong rebound in business in 2021. Shareholders' equity reaching almost EUR 9.4 billion, representing around 70% of the total balance sheet. The group, therefore, has strengthened its already strong financial structure so that it can move toward 2022 with confidence. Thank you for listening. I'll give the floor to Axel, who will talk to us about the outlook.
Merci. Thank you, Eric. I'd like to now come to the outlook of the group that remain unchanged. For 2022, the impact of the COVID-19 pandemic remains today difficult to assess as a result of the evolutions which are being pursued in the different geographical zones, areas. In the medium term, despite economic, geopolitical, and monetary uncertainty in the world, the group confirms the objective of progression of its sales at ambitious constant rates. It is with pride and recognition that we close 2021 on the theme of odyssey. This year, 2022 opens a new breath, which is that of lightness full of depth, and there's also creative vitality. We pursue an animation of creative employment, multi-local, multi-métier and creative and to engineers.
Investments continue in the production capacity, and we will continue to invest equally in our retail network with openings, enlargements of stores, namely Madison in New York, St. Petersburg in Russia, Shanghai and Wuhan, Barcelona in Spain, and Doha in Qatar. 2022 will once again be a year of strong creation with the launch in March of Plein Air, fourth chapter of Hermès Beauty, the launch of the tableware, Soleil d'Hermès, and the seventh collection of Haute Bijouterie in Paris, high jewelry in Paris. We're very happy to be able to renew with the public in March during the twelfth edition of the Saut Hermès at the ephemeral Grand Palais in Paris. Thank you very much, and we're now available with Eric to answer to your questions. Thank you very much.
Ladies and gentlemen, if you wish to ask a question, you've got to key in zero one on your phone. Two questions per person, please.
We have a first question from Thomas Chauvet from Citi.
Thank you very much for taking my question. Two questions. The first one on the gross margin, which was 71.1% in the second semester, up by 40 basis points year-on-year, and 50 basis points over two years with a favorable mix because of the over-performance of leather. Can you indicate the factors that have allowed you to increase the gross margin? And is 71% a good basis for 2022 for the gross margin? That is, was it more or less flat as compared to 2021?
Secondly, with regard to the production constraints that you mentioned in the first semester, the increase of cost, and other than the incremental cost of the recruitment for Nantes, Guyenne, the three leather workshops, what are the wages for the Hermès luxury leather to be able to retain its artisans? With regard to constraints of production because of the artisans, when we see ready-to-wear jewelry in the fourth quarter, do you see any constraints in production because of you know, the lack of artisans that you have to train?
On gross margin, as we mentioned in 2021, whether you're talking about overheads or indirect production expenses, we saw the benefits of an exceptional leverage effect. All in all, our fixed expenses went up twice slower than sales went up, a non-recurring positive effect. 2022, factor in two things. First of all, negative currency effect, we think should be approximately EUR 60 million, around 0.2 points on profitability. As we mentioned, in 2021, we also saw exceptional sell-through of our inventory, non-recurring due to the Hermès business model, due to the wealth of our collections, over 50,000 SKUs.
Thank you, Eric. I'd like to answer on the production. I'll give a wide answer because it's a subject which is something that we're really interested in, and it occupies us. There's a simple rule in Hermès. Firstly, it's the quality and know-how. Now, even in periods of great success like this, it is important indeed for me that the quality and know-how should never be an adjustment variable. Sometimes I prefer not to produce rather than produce a product that would not be up to the level required by Hermès. We are lucky to have a very strong demand, which is higher than our production capacity. You have seen this in the low inventory that we have. There are two subjects here. There is a leather production, as you know, which is very manual.
An Hermès handbag is 15 hours of handcrafting made by an artisan. I'm very proud of the results of leather. In 2 years, the leather goods have grown by +23%, which is beyond our objectives that we had fixed for ourselves, which was a progression in volume of +6% or 7%, plus the price increase, which as a result also induced a lot of inventory. Then we had some constraints because our leather is 100% made in France. As you know, the health situation being what it is with the lock-down and difficult for children to go to school when they had to be kept at home, very human.
The dynamism of production has allowed us to make +23% over the two years, and I'd, you know, wish to congratulate them for this. Then there are the other métiers, other sectors. What is maybe new in this period of crisis is that all the sectors, all the métiers, have had incredible demand, while we've seen in the past that leather was the métier that amortized the crisis. All the métiers, if I dare say, have progressed very strongly. Here again, there's sometimes other types of production, the jewelry, watches. We are integrated, as you know. We have our manufacturing unit in Bienne, and some constraints in here. We use know-how that is sufficiently cutting-edge and difficult.
That is the part of the beauty of the Hermès product to continue in this vein and sometimes be careful for production capacity beyond the capacity. We've never stopped our investment in our industrial tool. Even in the beginning of the crisis, even when some worried, we continued to invest in our manufacturing plants, the textile printing in Pierre-Bénite. We continued to invest in Switzerland, in our leather workshops. Today, we are bearing the fruit of this. If I may, you might say that I am satisfied with little, but after 165 years of history, we have had the most beautiful year, and +33% compared to pre-COVID. Of course, I would like to congratulate all the Hermès teams for this.
Now, concerning the inflation and increase of global prices. On this subject, I would like to say two things. In Hermès, we have our prices as a function of the increase of the manufacturing costs. It is true that with Éric du Halgouët, we have a strong organic growth strategy. Maybe less focused on scope effect and price effect, which is not related to our price increases. This is something that we're really strict on with regard to some practices in the industry. We increase our price approximately by about 2-3%, which represents inflation of our costs annually. Depending on the currency in the world, that could lead to more or less different averages, but we're around 3.5% this year.
We have an inflation which is limited, maybe also as a result of our mode of production, which are very artisanal and handcrafted. Maybe we're less subjected than others to the increases in the price of energy and such like. With regard to your question on inflation linked to the artisans, I hope, and of course, each maison has its own policy. I hope we are not followers and that we're ahead in terms of training, in terms of know-how, and this is something that we are very watchful about, very careful about.
I'd like to say on this subject that we increased all our artisans, but also our sales associates over and beyond the general increase or individual increase of EUR 100 gross per month, and a bonus of EUR 3000 has been given to each employee worldwide for Hermès. If you calculate, that's about EUR 70 million. Also something specific to Hermès, we believe a lot in the shareholders, salaried shareholders. 70% of employees have Hermès shares. To give you a salient feature, since I took on the operational, we've got a free share distribution, which has allowed us to distribute to employees for nearly EUR 800 million worth of shares to our employees, which is part and parcel of our pleasure to integrate everybody into this family-owned business.
Next question, Luca Solca from Sanford C. Bernstein. Go ahead.
Hello, good morning, everyone. First of all, your strategic positioning for your brand, I have a question about this, and the consequences of your price policies. What we're seeing in the marketplace is your competitors are currently increasing prices in a big way. Hermès is becoming less expensive, compared to them in relative terms. Also, limits for leather production capacity are such that demand is probably focusing on products that are somewhat lower priced, like beauty products, fragrances, and so forth. Maybe more volume sold of those products out in the marketplace. My question, is this a current concern to you in terms, of your rule governing price increases, which you've recalled for us? That was the first question.
On the other hand, I'd also like to ask you about digital policies we saw in the pandemic. Online sales grew significantly. Digital presence for all brands is very important. I'd like to know your most recent outlook on your digital presence. Thank you.
Thank you, Luca Solca, for the questions. I'm sure everyone, including Charles-Louis Scotti, is saying good morning to you as well. Regarding our strategy. Yes. I was just rereading your question. As I said, well, a first point. My uncle, Jean-Louis Dumas, used to say, "I don't look at what the other guys are up to because that might influence me." That's not our way of doing things. We don't follow what others are doing. With Florian Craen, who's brilliantly led the retail activity this year, we do not intend to use prices as a way of ratcheting up further growth. I have to also say, I do not believe, and I think this is one of the reasons we're so successful during difficult times, we're genuine about all this. The price you are paying at Hermès is the genuine price.
It's the actual price it costs to make that product. That's why there's a real rapport of trust between us and customers, and I wouldn't want to jeopardize that. Now, of course, you raise a point that I agree with completely, i.e., our products, yes, are costly, but they're not expensive. Our prices aren't related to desirability, but they're related to hours of labor and so forth that are required to make the products. I believe what's interesting and what we're seeing now is that all métiers have done well regardless of their price positioning. Yes, we're very proud of our success with beauty products coming at precisely the right time. Sometimes we have a little bit of luck, and we launch just before the lock-down.
In France, if I look at the amazing success of our furniture, the amazing success of Haute Bijouterie, with items sold at price points hitherto unseen. I think this just goes to show how attractive this house is, and that's what's special about our success this year. Everything went in the right direction. Everything was successful, regardless of price positioning. I believe we just want to make the right products with the requisite creativity and know-how at the right price. The right price, meaning the cost it took to produce it. Now, on the digital policy, we've seen this, and it's something fairly surprising. An increase in digital sales really ramped up during the crisis, especially when the stores were closed. The surprise was when the stores reopened, the trend didn't really dip down.
I think we've really gone beyond a particular threshold. I mentioned 78% of our digital customers are new customers. We're bringing on board a new customer base that we didn't have previously in our actual stores, in our brick-and-mortar stores. This is not cannibalization of our store customers. It's additional customers. Strong momentum in retailing and online. If we look at all of our digital business now, retail, the online retail is the biggest store of our group, so to speak, and I'm very glad to be able to say that.
Thank you very much to Axel.
Is there following question?
We have another question from Édouard Aubin from Morgan Stanley. You have the floor, sir.
Good morning. Good morning, Axel. Good morning, Éric. Just wanted to come back to the two questions that Thomas Chauvet asked in the beginning on the production constraints. The first one on production constraints in the leather. Can you give us an indication of your level of inventory at the beginning of the year? Is there a deliberate will to, you know, think that there's more inventory, which explains the difference between the fourth quarter and the first quarter? In the beginning of the year, can we actually come back to the 6%-7% volume growth in leather with the. The second question on leather is the growth in capacity on category other than leather.
Once again, just like what Thomas asked, what is the reality of the constraints in production really on these categories? In the last two years, you grew your sales by 15-20%. Is that a pace that you could actually maintain in the medium term? Well, these are very specific questions to be able to modelize 2022.
Well, I understand. Let's first take production or even the figures of the group. Let's take as a reference 2019, which was an excellent year. Today, growth as compared to 2019 is 33%, so we've grown, after 165 years by one-third. That's a lot, and that was with a big effort on production and, indeed with the use of inventory, strong inventory.
That's why we have less inventory, and that is also why we have a good cash flow, as you were able to see. Now, if I were to sum up, +33% over the year. Now, if I go to the lower rungs, +33% in the first semester, +33% in the second half. If I look at the first half of the year, I could say it was +33% on Q1 and +33% on Q2. Now, it so happens for us to add +33% for reasons of cutoff and also for comparison because we were one of the first houses to have had a very good first quarter last year, and we've had a small difference for the two, but the average remains 33%.
There is no break of trends, and I'm not announcing any change in the global trend either. Now, there is nothing, you know, contrived or any steering . The Chinese New Year for us is an important period, and the stores, you know, equipped as they should be for this important moment, just like that is the case for an important moment, which is Christmas. We are a multi-local company, so each subsidiary really manages its inventory and its purchases, and that is one of our specificities. We don't have any merchandising department that changes or goes from one store to the next, depending on the weather, but really as a function of their commitment, their long-term outlook prospects.
For leather, we follow our path, and we remain on our prospects that we've announced 6%-7% plus a price effect. There's the value effect that also comes into play. You need 15 hours to make a handbag in size 25, 15 hours to make a handbag in size 30, and the price of a bag 30 is higher than the size 25. That depends on, of course, also on the size, the leather used. There's lots of different factors. At this buoyant moment, there's a growth which is higher than habitual objectives. Now for other sectors, other métiers, it depends. We are integrated for some métiers very strongly, such as tableware, in particular silk, leather, you've already mentioned this, watches. We are integrated for a lot of métiers.
That is the specificity of Hermès. We produce a lot in-house, much more than the majority. We follow this, more or less. What is really important for us is to keep quality. For other métiers, you have suppliers, you have capacity, but we will increase the capacity only when we have a required capacity. Some people may say that we really hassle them on quality, but we always try to find the specificity of the Hermès product that takes the time it does to be made. Let me give you an example that is dear to me. Silver jewelry, it's one of the rare Hermès jewelry that is treated like the gold jewelry with all the requirements and takes longer to make as compared to other companies. Our role is to respond to demand.
We always try to please the customer, and we are always very sad, contrary to what others think, to say no, when we don't have it. We want to do this with the most beautiful object possible, and as I often say, the product is not an adjustment variable. We do it as best with our criteria of quality and a certain rigidity when it comes to this quality criteria.
Merci.
We will now take a question from Melania Grippo from BNP Paribas Exane. Please go ahead.
I have two questions. One is regarding your EBIT margin. In light of a lower gross margin and the OpCx investment, what could we expect in terms of profitability for 2022? I mean, could we expect around 36%? And if this is too high, what could be realistic? And my other question is regarding the beginning of the year. If you could please give us some comments, some qualitative comments on how the Chinese New Year is progressing, if you've seen any rupture in the trend. Thank you.
For this year, we keep the same ambitious target. However, compared to last year, we will reinforce our teams, support functions, sales functions. We will accelerate the CapEx, and we will also increase our communication expenses. We were penalized last year by the coronavirus. As explained by Axel, we have reflected in the price increase of 3.5% at global group, the cost of products. However, we did not reflect in this increase the currency impact I mentioned before. This is the main drivers for this year. I will not give you a percentage, but we keep our ambitious target.
Yes. For the beginning of the year, people who have listened to me during the previous presentation know that I'm not going to give a figure about the first quarter. For one thing, it's because there is a Chinese New Year, which is changing its date from every year, and we change the perspective that you can have on the first figure. As I told before, I can say globally that I don't see a change of trend. I will tell you just one thing. I will tell you two things. The first one is that it will be globally and not about Hermès, is that the Chinese New Year changed from the 21st of February to the 1st of February.
The Chinese New Year is very early. What you could expect in the industry, and I'm not talking about Hermès, but what you could expect normally in the industry is to have a very hot January, a lukewarm February, and a normalizing March to know exactly what will be the result of March. Your question allow me to do something that in French we call the lapalissade, which mean that we will know the result of the first quarter at the end of March. And I will be very happy to communicate it in due time.
Merci beaucoup.
Merci.
We have a
Our next question from HSBC. Go ahead.
Hello, good morning. Thank you very much. I have various questions. First of all, regarding regions, Europe and France, very strong in Q4. What about tourism? What's your thinking about tourism over the period? Who have the tourists been who come back to the stores, and what are your forecasts pertaining to the return of Chinese tourists to Europe? That was question one. Question two, the United States. Growth is slightly weaker than your competitors in Q4 in the U.S. Are there reasons for this? Less inventory to allocate or what have you? Could you talk to us about the U.S.? If I might dare ask a third question about China, what are your plans for Hainan? Thank you.
The third question.
Yes. Thank you for three very specific questions. Well, regarding Europe and France, my strategy has always been, and the CEOs of our various Hermès countries know this, I pay special attention to local customers. I track these figures every single year. We've got a very strong local customer base, stronger than some of our peers, which is one of the reasons why when tourism slowed down, we were able to continue with truly positive momentum. Now, track records, some quarters were more or less good and so on and so forth. Some variations, especially comparing to quarters where stores were closed, for instance, in London or Germany or where have you. There's sometimes big swings in one way or another. We can say local customers very much enabled us to offset the drop in tourism in Europe broadly.
Yes, it's true, towards the beginning of the year, we saw a return, especially in France, of U.S. tourists. Then it stopped pretty quickly when Omicron arrived. More tourists in November than December. Europe is up versus 2019 for local customers. The only one slightly down, France, -3%, related to a fairly strong drop in tourists to the Paris region, but very much offset by online sales and also provincial sales, which are amazing, and also in the Balearic Islands. Chinese tourism, you can try to forecast this as well as I can. I won't forecast any better than you. Considering Omicron and various health policies in different countries, it's not on the agenda yet. The return's not on the agenda yet.
Everything can happen very quickly and change very quickly, so I wouldn't stick my neck out to make any forecast there. I'll stick with market consensus, let's put it that way. Regarding the United States, we had fantastic results. Several things coming together at the same time. A couple of points. Q3, very strong, so a little bit less inventory maybe in Q4. Still, most importantly, I'd say Omicron, that factor made us close stores in December. Our health policy has been very strict, especially, we closed the biggest store. That's where there was the greatest in-store traffic and potential contagion. So I'm not in any way worried about the situation in the U.S. We've got a development plan for the United States.
On an annual basis, like for other geographies, we're seeing no break in the trend. Let me talk about China. China is always a country I'm very interested in. You may not know, but I lived there for 2 years when I was a youngster, so I have various recollections of China. Florian Craen is in charge of commerce, led our Chinese subsidiary for many years, 5 years. We often discuss Chinese cuisine. Now in 2010, you're gonna get a long answer to a quick question. In 2010, we made a decision, a joint decision. We have a low-ish number of stores in China, very successful. We kept Hermès exclusivity. We didn't decide to open up in every single store.
We knew digital would help us out already, and we decided to keep an entrepreneurial spirit there by opening a store in one new city each year. That's broadly what we've done. Pre-COVID, we slightly shifted, changed that strategy. We kept the entrepreneurial spirit and the idea of rather than opening just one store per year, maybe two per year, additional stores. Maybe sometimes doubling some locations, Shenzhen or where have you. Maybe having a fourth store as we go next year in Shanghai, and then open up in new cities, Zhengzhou, and so forth this year. So even though it won't happen in 2022, we're considering Hainan. It's a special status. We have not made any decision so far as to how to tackle this. There's a lot of duty-free sales, duty paid in China is a big business.
We're making inroads in the market, but not in 2022 at any rate. Thank you. Yes, don't get me started talking about China. Thank you.
Thank you. We have another question from David Tamisier, CIC. You have the floor, sir. Good morning. A question on the profitability. We've finally seen that the drop in margin in this 2021 was quite limited as given or despite the strengthened investment to support growth. Can we consider that you've actually crossed a big step in terms of structural profitability given the size of the group today, which is nearly EUR 9 billion in revenue? On leather, just to sum up everything that was said beforehand, can we suppose that the slowdown of Q4 was just in passing, and that there's going to be a return of positive growth on leather since the beginning of the year? Because we've understood that the demand still remains very high and the production capacity which will guide the business this year, once again. Last question on the digital.
You spoke about your omni-channel strategy. I know that historically, the website is managed as a physical store in terms of its inventory levels. Today, are you going to switch over to a unified inventory strategy at the level of the group in order to bring greater omni-channel service to your customers? Thank you. Very well. I'm going to answer on the margin, and Éric du Halgouët will correct me. I'll give you an answer more frankly than the question of an analyst. The group is not steered by margin. What we're trying to do is sell with our price policy, as we mentioned, product and to try and attract our customers. Margin is the result of the work well done.
We don't do any retro business, starting with a target margin that we want to have and, you know, work on the objectives. Now, in 2021, all the indicators were positive. As you have seen even in the cash flow, we have sold very well, and we have managed the costs because growth was higher, +33%. We don't have an inventory margin inventory. So all of this was very positive. Where you are right, we are an industry of overheads. The real costs in Hermès are the wages of our artisans and our sales associates, our rent, which are fixed in the Asia zone, and amortization of our manufacturing units in our central system and our stores, which are relatively spread over time.
The variable bit in our industry could be as a function of the success or not of communication, and particularly the inventory. Inventory counter-cyclical, when things are not so good, they go up, when it goes well, they go down. The only variable actually worsens the problem rather than solving it. Anyway, this being said, we have strong ambitions, necessarily, of success and of size, which obliges us, and we won't, you know, go on the steering on a margin. Of course, I may be contradicted by the CFO.
He made all the points. H2, we mentioned, saw inventory sell through at remarkable levels. We started bolstering our teams. The full year effect we'll see in 2022. I won't repeat the subject regarding currencies. I already talked about that.
Sure. Now for the leather, important subject. I can repeat till I bore you. We remain in our growth plan of 6%-7% on the year volume, plus the price increase. We predict a growth over the year. We will, you know, meet in March to talk per métier, per sector. We remain with great dynamic for a métier, and we remain a very manual métier, which depends on the health situations of everyone. On the digital, you're right.
You would have asked me the question a few years ago, I would have said, "Well, maybe we'll, you know, put it on the back of a big flagship so that they have a greater inventory." Now today, the first source of inventory, there's not everything on the digital for the moment because there are products where we don't have inventory in our stores. So that is the case also for the digital. But the digital can help out our brick-and-mortar stores with the inventory. But what is really important, we've kept our sense of responsibilities. The digital store is headed by a digital store manager who makes his choice, has the freedom of purchase like everybody else with a budget, a big budget. So, this is something I'm truly attached to in Hermès.
That in our work, we have the responsibility and the capacity to take decisions on behalf of the group. The artisan has his or her responsibility for their bag. They make it for 15 hours on their own. They know what they've done with the interlining and so forth, and marks it with their individual hallmark, and they know that they've made it, and it is the pleasure for them to market. That's an important step when they are given this hallmark, when they apply it to the bag they've made, for example. The same thing is true for the stores. We ask them to buy their inventory. Some of them say, "Well, buy it for me to make it easier for me." No, it is their responsibility.
It is part and parcel of the responsibility of the store manager, the internet store manager, whichever the size, to make their purchases for it. In fact, this was the pleasure at the beginning of the year. Every year, we have a podium. The podium in Hermès is the moment where we present all our novelties to all our stores, so everybody makes their big shopping. We have been able to see the appetite of everybody for new creations, which is a source of great pleasure, and particularly the internet stores. If I understand correctly. The hermes.com store can feed the physical stores in inventory, but not the other way around. Yes, yes, sorry I wasn't clear enough. Says Axel.
You remind me of Greenspan that said, "If you understood me, that means I wasn't clear enough." Well, we could have imagined this, what we wanted with Florian Craen, the fluid omni-channel. If you're in the store, you can have access to the internet inventory, and when you're in the internet, you can have access to the store inventory. There is a fluidity. That is why we have integrated the digital into the global retail. The idea is that there's no difference. For there to be no difference for our customers, and one can go to one or the other depending on the SKU. Everybody is, of course, responsible for their inventory. Everybody's taken their bet, and everybody has their own customers, their clientele.
What is surprising is that the stores, the digital stores, or digital customers rather, are also very digital customers, and then you've got those who are very physical. Everybody has their own dynamic and their logic. When there is omni-channel, then it moves. I think that the borders have become quite porous with this crisis. The physical stores have worked on the omni-channel when the stores were actually closed and did shipping. Internet also functioned. Our customers, when the stores are open, send messages, digital messages to our sales associates. The idea that we had was to remove the barriers, remove the silos, and to be at the service of. There is a great porosity between all of this, and this is headed by the same boss, who is Florian Craen.
Is that clear?
Yes, it was very clear. Very clear. Perfect. Thank you.
There are no further questions.
Thank you very much. Enough for today, so we can just be very pleased for a few moments with Éric at these 2021, with these 2021 results. We're rolling up our sleeves this year to tackle 2022, and to continue on this beautiful trajectory with great ambition and confidence, and especially creativity and lightness. Thank you very much. We'll meet with you again soon for the