Hello, and good morning, everyone. I hope you are doing well. It's my pleasure today, together with Sreedhar N, our Group CFO, to present our 2021 results. I will start with the highlights of the year, then Sreedhar N will drive you through all the details of our financial performance for the group and by segment, and then I will come back with our key strategic priorities in 2021 and in 2022. Of course, we'll have our Q&A session. In 2021, we have defined very clearly our vision, what we stand for, the worldwide leader in light and sustainable construction, aligned with our purpose, making the world a better home. 2021 was also the very first year of our new strategic plan, Grow & Impact, that is delivering on this vision.
Before I go into the figures, let me share with you some emblematic achievements in 2021 that do reflect the success of our plan, Grow & Impact. First of all, I want to thank our teams and congratulate them. I'm extremely grateful and proud of the Saint-Gobain teams who made our plan, Grow & Impact, come alive in all countries. In difficult times, 2021 was not a walk in the park. The commitment of all women and men of Saint-Gobain made our year a success and Grow & Impact a success around the world. At the group, we are showcasing sustainable solutions. We built a unique knowledge and expertise on sustainable solution that provide benefits both in terms of sustainability and performance to our customers.
In 2021, we ensured our position as a key supplier of building materials for the Dubai World Expo by providing high-performance solutions, innovative, which measure the environmental benefits for our customers. We are also leading the way on renovation in Europe. You know, this is our largest market, and we are more than ever best positioned to answer the need for renovation in Europe. Through our 3,500 distribution outlets and our best-in-class customer journey, we are in regular contact across all Europe with almost 2 million craftsmen. In 2021, we made two decisive acquisitions to strengthen our leading position worldwide in construction chemicals. The combined platform of Weber, Chryso, and soon GCP offers a highly comprehensive portfolio of construction chemicals and also a fantastic geographic footprint. As you know, we are also accelerating on all fronts to drive sustainability. It is at the core of our business model.
In 2021, as one example, we entered into our largest renewable energy deal in the U.S., a 12-year power purchase agreement on windmills. It is a key milestone in our target to reach net zero carbon by 2050. With this agreement and other projects around the world, we doubled our share of renewable electricity to nearly 40% in 2021. Sustainability is not just about CO₂. We are also actively driving the circular economy. One example, real life of our teams. This is in Sweden, where Saint-Gobain took the lead in a major office renovation project for which we supplied all new glazing, but also we recovered and recycled 100% of the old one. All those achievements on the ground, this is to show you a bit the real life of Saint-Gobain in terms of solutions, in terms of teams, in terms of ESG commitment.
In all countries, they are, of course, translated into our financial results. 2021 is a key milestone and a step change for Saint-Gobain financial performance. It is as simple as that. We have delivered new records on all performance indicators. A record organic growth of 13.8% compared to 2019, 18.4 compared to 2020, but you will see that we'll mostly compare the group with 2019, the full year prior to COVID. Thirteen point eight percent organic growth versus 2019, which is 6.9% annual average organic growth over the last two years. Record operating income, like-for-like, up 39% versus 2019 at slightly more than EUR 4.5 billion. This is up 60% versus 2020. Also, a record recurring net income, up 47% on 2019, above EUR 2.8 billion.
Lastly, a strong value creation with a record Return on Capital Employed above 15%, 15.3% versus 11.1% in 2019. Beyond these figures, we have now built a new Saint-Gobain with a performance-driven organization, with a high consistency of execution for the third year in a row, and structurally, a much stronger growth and profitability business profile. In 2021, we have made also very good progress on our environmental and social targets. The solutions sold by Saint-Gobain in one year allow our customers to avoid CO₂ emissions equivalent to 40 times our own total carbon footprint, whether it's on scope one, two, or three. We'll continue, of course, to maximize our positive impact. At the same time, we work continuously to minimize our carbon footprint. We have achieved a 23% reduction of CO₂ emissions versus 2017, despite our strong volume growth.
We achieve such results because our teams are fully committed. We managed to increase last year our employee engagement score, which is already very high, by 4 points at 83%, which is well above industry average. Those achievements illustrate once more that ESG is at the core of the business model of Saint-Gobain being a solutions provider towards carbon neutrality. 2021 was also the first year of Grow and Impact with a very successful execution on this first year. It is in motion. I show you the teams around the world. It is in motion across all our countries with great energy. Our execution is robust. We have delivered in this first year on all the financial targets that were presented during our Capital Markets Day. Above in organic growth, above in ROCE, double-digit operating margin, and a strong free cash flow ratio in line with our targets.
2021 has been a successful year, first year of Grow and Impact, thanks also to our four main pillars, where we executed strongly on those four pillars. First, we roll out in each country our solutions approach to meet our customer demand. Second, we are decisive, rigorous on capital allocation for growth. We opened 21 new plants last year and entered into five new countries. As you know, we are also very active on portfolio pruning, on acquisitions to boost our growth and margin profile. We acquired nearly EUR 2 billion of turnover and divested EUR two billion last year. As we have seen, the continuous optimization of our portfolio has become part of our management routine. We'll continue to do so every year with no taboo and fast execution to make Saint-Gobain stronger.
Since acquisitions and divestitures are being part of our management routine, this is why we have decided to make a slight change in the way we present our 2022 guidance, including now structural impact, that is the total growth which contributes to the important metric of EPS. Obviously, we remain confident that we'll continue to deliver like-for-like improvement. Finally, thanks to the success of our plan and our record results, we were able to deliver a record return to shareholders last year at EUR 1.2 billion. All in all, I'm confident to say that Saint-Gobain is on a new growth and profitability trajectory with very committed teams, with a clear strategy as a leader for light and sustainable construction. Sreedhar, the floor is yours now to drive us through all the financials.
Thank you, Benoit. Good morning, everyone. Let me give some more details about our 2021 results. Starting with organic growth. We have seen record organic growth in 2021, with 13.8% growth compared to 2019, which means an average annual growth of 6.9%. We saw negative structure and exchange rate impacts. The structure impact came from the continued divestments of underperforming businesses, partly offset by the acquisitions made to enhance our growth and profitability profile. The exchange rate impact became positive in H2 with the US dollar and Brazilian real turning positive. A stronger positive impact from the British pound and continued positive impact from the Swedish krona. If you look at the organic growth, you will see here a sequential improvement in the quarterly organic growth in 2021 versus 2019.
We saw a continuous continuation of a very strong underlying trends driven by renovation in Europe, construction in Americas and in Asia Pacific. We had an acceleration in Q4, not only due to pricing, but also due to strong volume growth of 6%. Looking at the pricing, we have seen a strong acceleration quarter- after- quarter in all segments to +10.3% in Q4 for the whole group and 9.5% for our industrial businesses. Our pricing power and the decisive execution allowed us to achieve a positive price cost spread for the whole year of EUR 60 million in a continued inflationary environment. The total inflation of raw materials and energy for the year was EUR 1.6 billion, as against the previous guidance we gave EUR 1.5 billion.
For 2022, we expect a continued inflationary backdrop in the same order of magnitude as 2021. We will remain focused and proactive on pricing as we have demonstrated over the years to ensure we at least pass on the inflation. Note that for 2022, we are hedged at close to 75% of electricity and natural gas requirement. For March and April, we have hedged close to 85%. As we are speaking about the price cost spread, I also want to tell you all that we started the year well. The prices are further accelerating everywhere as compared to Q4, and we had a neutral price cost spread in January. Now looking at the operating margin and income, you see here that we have a record operating income and margin. The operating margin increased to 10.2%.
A 250 basis point increase as compared to the margin when we started the transformation of the group at the end of 2018. This is the result of the significant progress that we have made in making the organization simpler, leaner, with a dedicated and empowered managers on the ground, and also an optimized group profile. 2021 shows also the successful first year execution of Grow & Impact plan as Benoit highlighted. If you just look at 2021, we continue to consistently outperform our underlying markets with a significant organic growth, as well as the positive price-cost spread of EUR 60 million and an additional cost savings of EUR 150 million to lower the break-even point of certain businesses which were impacted by COVID. We have delivered our ambition of double-digit operating margin, which we articulated in Capital Markets Day.
Let us now look at the other P&L lines. Here you see we have recorded an increase of business income of over 50% compared to 2019. Even better than 33% increase in operating income, thanks to a significant reduction in non-operating cost as planned. We achieved another new record of EBITDA and EBITDA margin, up close to 300 basis points compared to 2018. If you look at the next, financial expenses were slightly lower compared to the last two years. Income tax was higher, mainly due to the sharp increase in the net income. However, the group tax rate on recurring net income was slightly down to 24%. Recurring net income reached a new record level at EUR 2.8 billion and earnings per share is up more than 50% versus 2019.
Now the cash flow. We achieved free cash flow of EUR 2.9 billion and a conversion ratio of 53%, again meeting our Investor Day target of above 50%. This is a dramatic increase since 2018, driven by our new cash culture, the positive impact of our divestments and acquisitions, the optimization of CapEx, the reduction of working capital, which is now 12 days of sales since 2018. In 2021, CapEx was 3.6% of sales. Non-operating costs were EUR 239 million and operating working capital was 17 days sales, a record level for the second consecutive year.
Despite the first steps being taken to rebuild inventory to serve our customers better, thanks to our focus on the receivables management, that we continue to demonstrate our capability to keep the working capital at a very low level. All these three drivers, working capital, CapEx, and the non-operating costs are in line or better than the targets which we articulated in the Capital Markets Day. Now looking at the balance sheet, clearly you see that the impact of all that generation of cash which has happened is reflecting in the balance sheet. The balance sheet is now reinforced with the strong cash generation over the last three years, leading to a net debt level coming down from EUR 8.2 billion to EUR 4.1 billion, literally half. In spite of making value creative acquisitions like Continental Building Products and Chryso.
We have achieved a very strong improvement in the value creation ratio since 2018, with an ROI at 27.6%, which is 950 basis points improvement, and ROCE, return on capital employed, at 15.3%, which is 460 basis points better than what we had in 2018. Clearly, we are ahead of the target that we set at the Investor Day. Now, before I get into the segment details, I just want to clarify, because I've been referring to the figures, sometimes 2018, sometimes 2018. It's important that I tell you why it is so, because it's important that when we compare the organic growth, it makes sense to compare with 2019, because 2020 was impacted because of COVID.
Now, when it comes to the operating performance, the margins and operating income, I'm comparing with 2018 because that's gives you the complete picture of that impact which we have created because of the transformation which we have done for the last three years. Starting with Northern Europe, we saw strong sales momentum on the renovation markets. Nordic countries continued to deliver good growth, particularly in the light construction and on a supportive renovation market. During the year, we launched our project in Norway to create the world's first carbon neutral plaster plant, plasterboard plant. Germany saw accelerating sales in sustainable construction and should benefit from stimulus measures for energy-efficient renovation in 2022. However, the profitability was impacted by the downturn in the European automotive markets.
Sales in the U.K. improved in Q4, driven by pricing and the improvement of the part of our business done through distribution, despite some supply chain difficulties. The region achieved a record margin of 7.3% for the year. When we look at Southern Europe, we saw a strong sales growth in the region as our unique offer of a comprehensive solutions helped us to outperform a growing renovation market. France continued to grow strongly, thanks to a solid renovation market and our energy efficiency solutions. The full impact of the stimulus package, MaPrimeRénov', added to the positive dynamic. Thanks to our unique presence throughout the value chain of craftsmen, from manufacturing and distribution to recycling, giving advice to them, doing the intermediation services, we continue to gain market share in France.
Italy did a very good job of using their full set of solutions to make the most of the benefit of the government initiatives to support efficient renovation via tax credit. Spain grew strongly in the light construction and construction chemical market. Once again, we achieved a record annual operating margin in the region at 8.3%, almost double as compared to what you had in 2018. In the Americas, we continue to see a very strong underlying construction markets, enabling us to deliver organic growth of 28% versus 2019, with pricing up double-digit in an inflationary environment. In North America, sales of our solutions of our light construction continued to drive growth.
Our local organization enabled us to deal decisively and effectively with the supply chain challenges and also reinforced our customer relationships by doing extraordinary work in serving the customers during a difficult period. The successful integration of Continental not only reinforced our positioning in plasterboard in the U.S., but has also allowed us to develop a combined offering of Saint-Gobain solutions in the U.S. market, improving our value propositions and allowing us to also differentiate ourselves as compared to the competition. Latin America continued to see very strong growth, both in volumes and in price, to offset inflation. Like-for-like sales were up 43% compared to 2019. Brazil, among other Latin American countries, benefited from its complete set of solutions for our customers to reinforce its market presence and improve its efficiency and its service to the customers.
We are seeing the benefit of our investments in the new plants and acquisitions in countries like Peru, Colombia, Argentina, and Mexico, and we are clearly spreading our wings in this region. We achieved a record operating margin in the Americas region at 16.5%. This was mainly due to the strong volume, a good price cost spread, and an excellent organization set up and the effectiveness. If you look at the Asia Pacific region, we saw a strong sales growth driven by strong volume trends. India showed an excellent performance thanks to market share gains, a leadership role in the promotion of sustainable buildings, and innovated integrated offerings in the residential solutions and the introduction of the new ranges in chemical construction.
China showed a very dynamic growth, benefiting from market share gains, thanks to its positioning on value-added markets in a supportive underlying markets. Southeast Asia was impacted by pandemic-related restrictions, but improved towards the end of the year with continued market share gain in Vietnam. The region achieved a record operating margin of 11.8%, thanks to the good volume dynamic. You have seen that almost all the regions have made very good progress. Now, we have High-Performance Solutions. Like-for-like sales were slightly up versus 2019, but was good growth when you exclude mobility, particularly European automotive market. Our construction industry business outperformed the market with around 12% growth versus 2019, supported by capacity increases in textile solutions and many fast-growing applications in our technologies.
The integration of Chryso is going very well, and they have delivered the results better than what we planned in our business plan and when we announced acquisition in 2021. Our mobility sales remained slightly below 2019 levels, mainly impacted by the European market and the shortage of semiconductors. Otherwise, the sales to the Americas and China progressed well, especially in electric cars. Overall, the sales to the electric cars now represent around 20% of our automotive sales. Therefore, we continue to outperform the global automotive market. Industrial markets saw good trends in surface finishing solutions, decarbonization technologies, like our glass refractories that save energy consumption, reducing the CO₂ emissions. Activities related to our customers' investment cycles have rebounded significantly versus 2020, but are still slightly below 2019 levels.
The operating margin for High Performance Solutions was 12.4%, impacted again mainly by mobility in Europe. To conclude, you have seen what Benoit said. Again, I want to reiterate that we have transformed Saint-Gobain, its profitability and the growth profile, and it is visible in the last three years' performance. Clearly, it's a step change. Given that it is the third year of solid execution of our strategy, solid results, we have delivered exactly what we said or more than what we said, gives me a lot of confidence that Saint-Gobain is now set to deliver a strong performance as we progress in the years to come. Thank you, and I now pass on the floor to Benoit.
Thank you, Sreedhar. Now let me share with you some highlights of our strategic actions. You remember in October, we shared our plan, which rest on four pillars. Acceleration of our underlying markets. Second, expansion of our customer-centric solutions to outperform those markets. Third, sustainability at the core of our business model. And fourth, of course, further strengthen our value creation for our shareholders. Let's start with our main market. You know, Saint-Gobain is at the core or the heart of three world's biggest challenges. Climate change and the need to decarbonize construction, preservation of natural resources, and fast urbanization in emerging markets. These challenges, they call for an acceleration of growth on our three key markets. Renovation, mostly in Europe, shift towards light frame construction, especially in North America and emerging markets, and a call for innovation towards sustainability on global, industrial, and construction markets.
Let's look at renovation of buildings in Europe. It is enjoying powerful tailwinds, and we at Saint-Gobain are ideally positioned. First, on energy efficiency, commitments are now becoming a reality with concrete regulations on minimum energy standards and green stimulus packages. Roughly 35 million buildings will need to be renovated by 2030 in line with the EU Fit for 55 package. Second tailwind, COVID lockdowns have precipitated new building usage, starting with working from home trends. This has triggered an impressive rally in terms of home renovation intentions, powered also by excess household savings accounting for roughly 8% of GDP. As you can see on this slide, and don't worry, I'm not going to comment that in all details. Every country in Europe, all governments are taking action to increase their renovation rates.
The European Commission estimates that in order to achieve carbon neutrality, more than 70% of EU buildings, public, private, need to undergo significant renovation by 2050, which means doubling the renovation rate by 2030. Next, on light construction. The rationale for adoption of light construction is strong, articulated around sustainability and performance. Sustainability because you save on the CO2 of the materials by having less resource-intensive way of building. So you decarbonize construction at the time you build. Second, performance by gaining time, productivity, addressing in the emerging markets the need to build fast and the labor shortages in developed countries. Of course, delivering the well-being benefits, thermal, acoustic, visual, that everyone expects. Light construction adoption is growing fast and is becoming the new standard for many projects.
On the right side of the chart, I take the example of the. It's, you know, we just finished the Winter Olympics, so let's go to the next Summer Olympics in Paris, 2024. Sustainability and performance requirements were key for us to win on the 250,000 sq m project that needs to be built in a very short period of time for this village, which later on will be, of course, converted to permanent housing. We are providing a full set of innovative solutions with also the green delivery from our distribution waterway on the Seine River, benefiting from outlets on the river to reduce the road transport. A full solution of Saint-Gobain towards this Olympic village. We have a complete set of solution on light construction, whether from manufacturing and also all our sales through distribution.
We are well-positioned here also to benefit from this trend. If I switch to the big call for sustainability imperative innovation, this is a fantastic opportunity for our high-performance solutions to deliver impact. We tackle three big needs. Sustainable construction, Adfors, Chryso, they grow double-digit because we offer decarbonization technologies for global construction players. Sustainable mobility, we have cutting-edge technology of glazing and above 40% market share in electric vehicles worldwide. Sustainable industry, our specialty materials help large industrial customers answer their own challenges towards carbon neutrality, both for their processes and also their products. As Sreedhar told you, our backlog on those orders is increasing for new applications because there is a real call and urgency to decarbonize industrial products and industrial processes. We see acceleration of growth on many of those global markets. How we perform on those markets?
Truly, by leveraging our customer-centric solutions. If I take single-family home renovation in France, we are the true one-stop shop for this very large market. We are present all along the value chain. Our solutions tackle all applications of the building, and thanks to our very strong distribution presence, we have regular contacts with more than Q3 of all French craftsmen. We provide them with software for training, for digital quotes, advice, of course, the counter for best energy efficiency solutions, logistics on the job site, and waste recycling services. This full set of solutions and best-in-class omni-channel customer journey allowed us to outperform the market consistently over the last years. In 2021 versus 2019, we grew significantly above the French renovation market. On light frame construction, we have a full spectrum of solutions.
I take one example, ETICS, external thermal insulation in Czech Republic, for instance, for timber framed walls. The reality of Saint-Gobain on the ground. This is a certified system which combines insulation, water barriers from Isover, reinforced gypsum boards from Gyproc, our plasterboard brand, adhesive mortars and decorative coatings from Weber, as well as glass fiber reinforcement mesh from Adfors. In Czech Republic, thanks to this system and thanks to a very structured, targeted key account management, we have grown by 12% in 2021 versus 2020, gaining two points of market share. Within high-performance solutions, our solution bring global solutions of innovative materials and technology to support our customer needs for sustainability. SEFPRO, this is our high specialty refractory business, help energy consumption reduction for glass furnace, but not only in many, many industrial processes, and therefore lower the carbon content.
Carbon content of a glazing of a window will be reduced, thanks to these materials during their production. Also, we recycle with Valoref the refractories at the end of their life cycle. Another example, of course, is Chryso, which brings low carbon solutions to concrete and cement manufacturers. Chryso has been the first player to propose a complete admixture offer for low CO₂ concrete. All countries are driving customer-centric solutions. We have a powerful multi-local organization, empowered local teams on the ground, full accountability for them and ownership on their P&L and their solutions, adapting to the market. They are driving a lot of initiatives. I'm not going to describe all that. You can see many examples, whether it's the complete offering we are delivering for do-it-yourself in the U.S., other solutions in India and Brazil, and so on.
Now, as a leader on light and sustainable construction, ESG is at the core of our commitment. I will give you a few concrete examples of what we are doing. Innovation is central to creating more sustainable model for buildings. For instance, Saint-Gobain is developing a new disruptive decarbonized wall system using raw excavated earth. This system combines our know-how on ETICS, insulation, construction chemicals, plasterboard. It is a circular economy solution with our local presence of Point.P all across France. It brings many advantages, of course, on the well-being at the end of the day, but also on circular local economy. You just excavate the whole earth almost from your garden, and you build your house wall with zero carbon, thanks to that. It's a new innovative solution with a complete overall system of Saint-Gobain. We have several ongoing projects as we speak.
We invest also in technologies to decarbonize our processes. If I take glass, you know, in glass manufacturing, we are implementing different technologies across our plants. With these technologies, we can reduce already by almost 30% the content of CO₂ in glass manufacturing, and we have active R&D projects to go even further towards low carbon glass. You know that part of our net zero carbon journey is to spend around EUR 100 million of CapEx and R&D per year to reduce our CO₂ emissions, which is what we have done in 2021. We also drive circularity on all our markets. It's not just about sustainability, but CO₂ emissions. It's also preserving natural resources. We are at the core with our solutions of circular economy. Indeed, many of our products, if not all, gypsum, glass, mineral wool, can easily be recycled endlessly.
I take a deeper example of glass wool. We act at every stage of glass wool life cycle, from the manufacturing to distribution to demolition, collecting the waste, and reprocessing. In France, for instance, we have 54% of recycled materials in our glass wool production, and we have also developed, this is what you see on the left part of the slide, new furnace technology to remelt any kind of mineral wool scrap and feed it back into our manufacturing process. In 2021, we continue to make strong environmental and social progress in line with our ambition of maximizing our positive impact. We have 72% of our sales that provide a benefit in terms of sustainability and well-being for end users. We are on our way towards 75% of sustainable sales by 2025. We also continuously minimize our footprint.
In 2021, we, despite almost 12% volume growth, we lowered our total CO₂ emissions. To some extent, it's interesting to see that we have almost decoupled growth from carbon emissions. If I look at the euro of EBITDA generated by Saint-Gobain, euro of EBITDA, we have 50% less CO₂ by euro of EBITDA versus 2017. Overall, we have achieved a 23% CO₂ reduction versus 2017 in line with our 2030 target, which has been, as you know, validated by the SBTi Science Based Targets initiative. Finally, among our ESG highlights, of course, are our teams. I want to mention our progress on gender diversity. In 2020, we have reached last year, 2020, our target of 25% women managers, and now we continue to make progress. We are 26.3%, and we have hired last year 35% of women among new managers.
These actions on diversity and inclusion, they are recognized both externally, for instance, through the Bloomberg Gender-Equality Index, and also internally with 85% of our employees recommending Saint-Gobain to their friends, families, colleagues in other groups and industries. Of course, all those actions are tied to value creation for our shareholders. First, we have a strong commitment for a very disciplined capital allocation. If I take growth CapEx, we selectively deploy our firepower on greenfields and capacity expansion to serve growing markets with an emphasis on investment outside of Europe.
Managing very tightly our maintenance CapEx in 2021 has allowed us to increase our growth CapEx by 40% versus 2020, and we plan in 2022 to do more than a 50% increase on growth CapEx versus 2021 because we have good trends on volumes mid- to long-term, and we need capacity to service our customers. We continue also to be very active on M&A with value-creating acquisitions and targeted disposals of underperforming assets. In this respect, over the last three years, we have acquired around EUR 3 billion of revenues with an EBITDA margin average of over 20%, and we disposed of EUR 5.6 billion of revenues with an average profitability below 5%.
In 2021 alone, to show you the dynamic which is ongoing, we had 37 acquisitions which were signed or finalized, and nearly EUR 2 billion of acquired revenues. While on the other hand, we made 20 divestitures which were signed or finalized for also approximately EUR 2 billion of revenues. I will, together with all the teams of Saint-Gobain, continue to ensure the regular perimeter review with simple criteria of performance and strategic alignment. We have made significant acquisitions in recent years, and I think we have turned the corner and demonstrated our capability to successfully integrate them and create strong value. First is the acquisition of Continental Building Products in U.S. plasterboard. We are one year ahead of plan with value creation in year two, remaining upside on top of that on commercial synergies and more than 30% EBITDA.
Second is the acquisition of Chryso finalized at the end of December, closed on October first. We announced it in May. The results of Chryso. I'm extremely happy with the successful team led by Thierry Bernard. The results are above targets, 26% sales growth versus 2019, and I can tell you that the roadmap to achieve a successful integration is very clear and synergies are already underway. I think it's interesting to note that in both cases, the CEOs of Continental and Chryso, Jay Bachmann, Thierry Bernard, both very experienced and seasoned CEOs, stayed on to lead their business within Saint-Gobain. I'm extremely happy and proud to have them on board. This shows also how much Saint-Gobain has changed culturally, being able to retain and engage CEOs coming from outside, from a U.S.-listed company and a private equity type of environment.
On Chryso and of course, with Chryso and our teams in North America, we are actively preparing the integration of GCP, which we expect by the end of 2022. I finish with our shareholder return. We have created strong shareholder value. In 2021, we have returned EUR 1.2 billion to our shareholders, which is a record, and we have delivered a total shareholder return of +69%. Turning to 2022, we want to set another record above EUR 1.2 billion by combining a strong increase in the dividend that the board has decided to propose to the AGM at EUR 1.63 per share, up 23% versus last year, and at least EUR 400 million that will be returned to shareholders through share buybacks.
This shows our commitment to deliver consistently on the target of EUR 2 billion of share buyback that we outlined during our Capital Markets Day in October. To continue to make all this a success, you can count on our mobilized and renewed management team, which now counts more than 40% women, 50% of international members. I'm also very pleased with the constructive and challenging dialogue with the board that I have, who fully supports our strategy and this plan. We are all also very enthusiastic to welcome the board of directors, Lina Ghotmeh, who is a famous French-Lebanese architect with many forward-looking projects and of course, fully aligned with our sustainable construction targets.
I want to leave you with the assurance that the executive committee is determined to deliver on everything we said at the Capital Markets Day with a clear mindset and winning spirit to outperform. Let's now turn to the outlook. In Europe, we expect supportive renovation markets that does require comprehensive solutions to increase efficiency and save time for our customers who are very busy. In the Americas, robust market trends, particularly in residential construction in North America and in Latin America overall, despite a slightly less dynamic environment in Brazil. In Asia Pacific, market growth with continued good momentum in China and India, and a gradual recovery in Southeast Asia with fewer pandemic-related restrictions.
For high-performance solutions, growth in initial markets, supported by key trends in sustainable construction, a demand for innovation and new materials for industry decarbonization and green mobility, despite uncertainties as to the recovery of the automotive market in Europe. In a structurally supportive market environment, Saint-Gobain is targeting a further increase in operating income in 2022 compared to 2021 at constant exchange rates. You have understood, I'm confident in our ability to deliver another strong year of performance in our financial and non-financial parameters. Thank you, and we now turn to your questions. We'll take the question in the room. I think Jean-Christophe was first.
Okay. 3 questions for me, if you don't mind. The first one, could we have the order of magnitude of the flat glass price in December and maybe in January? Secondly, we have a strong improvement of the distribution margin above 6%, probably driven by inflation. Can we have a flavor on the gross margin evolution? Was it stable or increased versus 2020 and 2019? And third, could we have more flavor on the energy and raw materials bill in absolute terms in 2021? Many thanks.
Okay. I will answer on the distribution. Sreedhar, you will take the flat glass and the energy bill. Yes, we have done a very good performance in distribution. It's the result of many actions. Of course, as you know, we have divested the low-performing assets. That's one. Second, you know, we have constantly improved in all geographies the performance of our presence through distribution. It's a combination of many, many parameters. Leading market share, complete solution also across Saint-Gobain by country. It's. I showed you some example, you know, renovation. It's a full set of Saint-Gobain solution, not only distribution by country. A lot of pricing actions. I'll not give you all the details of what we get on the different line, but a lot of pricing actions.
We have been using, for instance, in several countries, big data to optimize our pricing in the last year. It's not only the inflation from the last 6-12 months which has had the benefit. It's a lot of productivity gain, better position, better offer, better overall solution of Saint-Gobain. A lot of digital. You know, we have invested a lot in digital in the last years. We remember what was the impact on some of the CapEx in Saint-Gobain some years ago. We benefit from all that. It's a combination of all factors and of course, also the commitment of all our teams who deliver fantastic results. Yes, we are above best in class in terms of margin in distribution, and I think that's the reflection of all the evolution of the business parameters. You take glass.
Okay. Answering your question of 4 millimeter, I specifically prepare only for you. You have EUR 4.22 for the last quarter. It was an average. We have been increasing the prices in glass almost every alternate month. If you take the sequential price increase, what we had is 17%. If you compare with last year's 2024 Q4 , we're talking about 40% increase. Glass, we have really pushed the prices. I mean, it's not glass. I mean, the pricing you will see everywhere, there is an absolute discipline, decisiveness in the way we have focused on price. Second question is on your energy bill. I mean, energy bill for 2021 was EUR 1.5 billion.
As I said, when I was presenting the results, we have hedged close to 75% for 2021, 2022. March and April, we have hedged close to 85%. Okay. You know, when it comes to hedging, I can tell you, now purchasing is part of my responsibility. I look at every single day, looking at how we take the best opportunity we have. Anytime there is a little bit of opportunity, we try and increase our hedge. We are very well covered to manage this situation, what we are seeing today.
Arnaud and Yves. Oh, Yves I think was first. Sorry. After you, Arnaud. Yeah, sorry.
Sorry, Arnaud. Good morning, Benoit and Sreedhar and everyone. Thank you for taking my question. Yves from BNP Paribas Exane. I'll have three, if I may. The first one, I think Benoit, in your previous update of Q3, you mentioned that your priority was to protect margins with still the expectation and ambition to reach double-digit margin. Can you confirm that this is still a priority and you could achieve double-digit margin in 2022? My second question is on the current situation regarding the Coup de pouce Certificats d'énergie in France. We are seeing some news flow which is quite negative from the association of the insulation industry. Can you comment on this? Is this a risk and a headwind for 2022?
My third question, inflation is a key topic, but we often hear yourself and maybe your competitors talking about the potential impact it can have on demand. For now, everyone is really bullish on demand. In light of what happened yesterday in Ukraine and the gas prices and your need to increase prices further, what is your view in terms of how that can impact demand going forward? Thank you very much.
First answer is simple, yes. This is our ambition to continue on double-digit margin, and this is the way we think and drive all our teams. Second, you know, we are very busy on energy efficiency, renovation across all Europe, including in France. We will announce in the next few weeks some additional investment on insulation in France. I'm not worried about the fact that the demand is very strong, and we need additional capacity. You could have some product changes, one versus the other if I take blowing wool versus the bulk of the offer on insulation. We are in a need of additional capacity in France, and we are going to announce that.
I'm very confident that the trend of energy efficiency renovation, we have seen the success of MaPrimeRénov', you know, 800,000 projects filed in 2021. It will continue in 2022, and what we start to see is the public buildings picking up in 2022 in France. That's what we expected, but we knew it would take more time because you need quotes. We need, you know, public bids, et cetera, when you talk about public buildings, but we are seeing that for 2022. On your third topic, you know, let's keep in mind that, as Sreedhar said, we are very well covered in terms of hedging. Yes, we need to continue to push up prices, and we have done that across many product lines and across the world.
You know, if you take the last quarter, almost all regions were in this double-digit price increase versus Q4 of 2020. We are entering into 2022 with a good position. You know, price cost was neutral already in January. I was seeing on the ground last summer in some countries some delay of projects. If I take timber in the Nordics, you know, we built with a lot of timber in the Nordics. In the short period of the summer when the timber prices were through the roof, yes, there had been a bit of delay of the project. We don't see that now as we speak. Again, all the projects are running full speed.
Housing starts in the U.S., you know, the difficulty in January was to get the workforce on the job site because of the COVID Omicron wave, the workforce in our plants to service the customers. We are not seeing any impact on volumes because of additional inflation. Everyone has understood that when you quote a job, you don't fix your price one year ahead. You have now floating type of quotes. What we have seen end of last year in some occasions is that a job site could be delayed because you had insulation or plasterboard on the job, but not windows. When you put your contractor off, well, let's come back two weeks later when the windows is there, if the windows are late. We are again with a strong demand. The backlog of the craftsmen is strong.
We are seeing a good momentum on the overall volume market. Also keep in mind, I'm not saying it's easy or not, but our first priority is to service our customers. The first priority, you know, we talked a lot about supply chain disruption last year. In the U.S. alone, we had 260 cases of force majeure. In a normal year, it was four. Our first priority is to service our customers. We have done that well last year. After that, of course, anticipate the price increase. In an overall job site, the cost of material is 30, 40%. It went up 6.7% for the full year within Saint-Gobain. The impact on the full job and project at the end of the day is not as dramatic as you could think. I'm not worried about the volume evolution.
Arnaud now.
Yes. Thank you. Perhaps two questions. The first one on how far are you on your roadmap of portfolio optimization? I'm hearing you on the fact that it's going to be a regular exercise to review your portfolio. You had a certain number of underperforming businesses. Some have been already divested. You still have a lot to do on that side or not? Secondly, obviously, what happened in Ukraine is dramatic. Could you just tell us what is your direct exposure to Russia and this part of the world? Do you see a risk for Saint-Gobain? Hedging of energy is clear, your answer. Do you think a risk to see you know gas shortages if the conflict in Ukraine was deteriorating further?
What can you do if it's happening?
I'll take them one by one. You know, the perimeter thinking is a management routine, and we are doing it very selectively country by country to make sure that we invest in the growing areas and we divest when it's not aligned strategically or not performing as we expect. We'll continue to do that. You know, some of our glass transformation activities have not been so great, so we divested in several countries, Denmark, Estonia, a bit of the U.K. We are working on some projects for that in France for instance. It's not a big deal, but it's important for us to continue to optimize. We have looked at some of our distribution assets. We have seen that we divested some of our specialty secondary brands in the U.K. We continue those strategic reviews.
Jean-Christophe highlighted the very strong performance of our distribution business. Some are above the average, some are below. We push the ones who are below to catch up on the average. There is no taboo. You know, either you catch up with the financial expectation in a reasonable period of time, or we make some strategic decisions. We continue to do that. Don't expect no big announcement, but we are very committed country by country to continue, and this is part of our management routine. Same is on acquisitions. We have, as Sreedhar showed you a strong balance sheet, so we continue to look at niche value-creating with a very strong financial discipline on acquisition. It will continue. I'm not going to give you some specific names.
It's across all group, you know, within the High Performance Solutions with David Molho. We look at some assets where we have a nice business, but is it big enough to be strategic and strong in the next ten years? We are very agile on all this with also good speed of execution. Russia is 0.5% of our sales. You remember that the strengths of the business model and the organization of Saint-Gobain, we have shown that on the COVID, we have shown that on the pricing actions, very fast on the ground. We have shown that on supply chain disruption. We are showing that on the workforce, you know, making sure that all our positions are filled in our plants, in our outlets, is due to our local organization.
It's better to be Polish in Poland to hire Polish people because you know them, you can tell them, you know, "I'm the queen. This is the lady of Poland because I started in Poland years ago." The local organization is very powerful. In Russia, we buy locally from local suppliers, and we service with local plants, local customers. We don't have any import-export issue, and we are local. We service the housing market. I don't expect that to change dramatically in Russia. It's 0.5% of our sales, total group. We are not in Ukraine in terms of physical assets. We have a very small commercial office. We made sure yesterday they are all safe, you know, the 46 employees we have in Ukraine. That's the picture of Saint-Gobain for Russia.
0.5% of our sales and roughly in line in terms of profit. Gas, you know, we are covered because Sreedhar and all the team have been very proactive last year on hedging. It's interesting to see that first, some of our businesses are running with electricity. There was a question on insulation. We run with electricity in France, same in the Nordic countries. Now when you think of gas, we are part of the industries which are prioritized on gas. 'Cause you know, if you shut down the gas supply to float line, you kill it. Country by country, we know we are prioritized on gas supply. You can cut gas for other industries, but you cannot cut gas for some manufacturing processes. We are part of that. I'm not worried about shortage physically.
I would say that's the question of gas supply to our plants. Punctually, we have also the ability, it's not great for the CO2, to switch to heavy oil if need be, but it's not the long-term ESG green solution. That's the picture I would say on gas.
Thank you very much.
Another question in the room? Yes.
Yes. I'm Andréa Cavalès from Moneta. Some more question on gas, please. Can you split the energy bill between gas and electricity? The EUR 1.5 billion you gave us. A second one is, what percentage of the gas bill is in Europe, and what percentage is outside of Europe? Third, on gas, I think you answered a little bit, but I want a precision. Is the gas only used for the glass plants or also for other plants. Thank you.
The split is gas slightly above 50% of the energy bill. Otherwise, it's electricity and steam. Coming to the split between Europe and outside Europe, you know, Europe is slightly above 50%.
On your question, gas is used for flat glass, not always for glass wool. I just mentioned that some of our plants in some countries run with electricity, and we also use it for plaster board. Even though in some areas we told you about this, net zero carbon plaster board plant, we are switching to electricity. You need some gas to dry evaporate water when you dry plaster board, so you need some gas. But we are also switching some dryer to electricity in Norway. We have some projects also in North America to switch to hydropower electricity to have green electricity. It's mainly flat glass and plaster board. You know, it's different also on plaster board. You can switch on and off in a normal year. Right now we are super busy, so our plants run 24/7.
You can switch off a plasterboard plant in the weekends. You cannot do that in a float line. This is why we are prioritized in the industries where we will get supply of gas in any case. Another question? If not, we can switch to the questions on the call, and we can always come back to the room if you have additional questions. We start with Sven. I see Sven on the top of the list. Sven-
Yes.
Your turn.
Yes.
Mr. Sven Edelfelt
Good morning. Thank you.
You have the floor.
Yeah. Good morning.
Sorry.
Thank you. Thank you for taking my question. I had three. The first one, I understood part of the recovery plan in France is dedicated to pipe business. And it seems this has triggered one of your competitor, an Indian player, to set up a business in France. Can you elaborate on the positive prospect here? What kind of growth on profitability, what one should expect? And does that mean you are no longer looking for a long-term solution for Pont-à-Mousson? That's the first question. On the second, sorry, to come back on the energy on raw material bill for 2021. To my knowledge, it should be close to EUR 10 billion. It's the EUR 8 billion you had in 2020 plus EUR 1.5 billion, plus a volume effect of EUR 500 million.
Is it a fair assessment? On the third one, I apologize if it has been answered. Can we have a price on the distribution, please?
Before I answer you, we all and you all become specialist on gas. Let's take a bit of a step back because we are delivering fantastic results. We manage with our pricing actions in a quarter to overcome that in 2021. We'll just simply to continue to do that in 2022, and we are very confident about the long-term trend. I want to pause a bit and reflect on the long-term trends of Saint-Gobain and the agility of our teams to overcome supply chain. You don't ask questions about supply chain disruption, but we had hundreds of them last year. We overcame that. The long-term trend that we outlined at the Capital Markets Day, they are there.
There is a new profile for Saint-Gobain, and we should keep that in mind and not overreact to some short-term. The short-term, we have protected it with a very strong hedging. On your question, yes, there was, I think, a project to give a bit of subsidy to a local plant in the south of France. From my understanding, that subsidy has been frozen because there is a renewed anti-dumping investigation from the EU on this Indian competitor. I think it has been frozen. I can tell you the dynamic in terms of volumes on the pipe business is good, mostly in Europe because there are some investments in infrastructure, in water supply in France and in the rest of Europe. That's progressing well.
Yes, also our long-term plan is still to find a solution, a good solution for the pipe business. It was not easy to do that last year because of the raw materials price spread, which was not so easy to cope with when you have a bit of delay on your long-term contracts and the short term impact on pricing. Yes, we are still with that in mind for pipe long term. You take the-
Yes.
the second and the third.
Sven, your assessment is correct. You have to break up what you're trying to work out between the raw material and energy is correct. The other question was on the distribution price increase, right? It's a 6.8% for the year 2021.
In line with the group.
For the whole group, yeah. For the full year.
Okay, thank you very much. Very clear.
After that, we have Elodie Rall from JP Morgan. Elodie, your turn.
Oh, yes. Hi, good morning. Thanks for taking my questions. My first question is on your guidance for an increase in operating profit in 2022. First of all, can you confirm that you are looking for a like-for-like increase in operating profit? Second, what is the scope impact already secured in 2022 in operating profit? And third, in terms of volume outlook, clearly you are positive, but are there any areas where you expect any weakness in 2022? If I can throw in a last one on Grenfell. Lots of different news flows, but like mostly negative obviously over the last few months. What's your actual view on the potential liability of Saint-Gobain with regard to that tragedy? Thank you.
I take the first two and leave the third for Sreedhar. As I said early on, we are confident that the like-for-like improvement on our operating income. That being said, you know, we have been so dynamic, 40 acquisitions last year, 20 divestitures. You know, I don't want to take two years to put Chryso, which is a fantastic company, into my guidance. This is the reason why we want to take this management routine of acquisition divestitures in the next year and make sure that we integrate them fast, that we deal with antitrust when there is antitrust fast, because that's our commitment in terms of value creation. This is the reason we have made a slight change.
Yes, we are confident that the like-for-like OP improvement and the M&A perimeter effect is 1.5% on the EBIT performance for next year. It's not huge. Therefore, in order to make progress on the ROCE, they definitely need a like-for-like. I think it's important to have, you know, the whole picture of Saint-Gobain. We want to deliver growth top-line when we run at 15% ROCE. The motto of Saint-Gobain is accelerate growth. We have strong underlying markets, renovation Europe, new-build in the U.S. and emerging markets, global innovation in our high-performance solutions. For me, running at 15% ROCE, after that you need growth, keeping our double-digit margin and targeting this dynamic of acquisitions and divestitures.
In terms of, I think the second question was any volume weakness we would expect. Well, I think we say that the automotive market recovery in Europe, we don't bank on it. So we are very cautious. We don't expect anything significant before 2023, if I read the experts. So that's one area of weakness or uncertainty for us in 2022. Keeping in mind, of course, that we have a high comparison basis in 2022 first half because of the very strong first half of last year. We are confident about volume growth for the full year. Again, we are confident of the long-term, midterm volume trend of Saint-Gobain. We have delivered 3% yearly volume growth over the last two-three years, and this is again the new trajectory of Saint-Gobain going forward. Sreedhar N., you-
Yeah. On Grenfell, you all know our position, you know the context. We have been extremely transparent, putting everything on the website, every single update, what has happened, the developments. It's important to keep in mind that we are talking about GBP 5 million sales for this building, which you're referring above 18-meter and above, and GBP 5 million sales is for the full lifetime of the product. It's not, we are not talking of any big sales which we have done. The second thing is the new dimension which has come up, which was a discovery, that now they are talking about 11 meters to 18 meters. Even if you take 11 meters to 18 meters, we are talking about around GBP 50 million in the last 15 years that we have sold in this kind of buildings.
You know, Saint-Gobain is very supportive of this process. The government is trying to look for solutions, trying to see how the construction of the building can be safe. You know, Saint-Gobain is participating in all the conversation and discussions. It's important that Saint-Gobain has always been you know, cooperating in every single inquiry process, and it's part of our values, and we really wanna make sure that we cooperate with all the stakeholders in a very transparent and responsible manner. Now, having said that, I'm only hopeful, and I'm really sincerely hopeful that given the fact that we have such a limited exposure in such kind of buildings, we'll find some reasonable solutions, and we just close this topic, but it's a very complex situation.
I think what is important to know is that our products are safe. Products are safe. The question is the overall cladding that has been put on the Grenfell Tower, and that's part of the inquiry. As of now, it's the government and the building regulation from the government which is under the inquiry. This is a question of the cladding. The products are safe. We have made all the tests again and again. On this desire for the government to increase and improve and retrofit some of the buildings from 11-18 meters and improve, you know, the overall thermal efficiency, whatever performance, it's an overall system between the developers, the architects, the cladding system, all the construction players. Our products are safe. If there are some new norms, new standards, we'll participate commercially with our products.
Our products are safe, and we have a very strong product compliance policy within Saint-Gobain. That's very important to keep in mind. Our products are safe. Now, how they have been installed with different type of claddings, with lack of building regulations is another matter. We'll take the question from Arnaud Lehmann from Bank of America.
Thank you. Good morning, gentlemen. I hope you can hear me.
Yes, very well. Thank you.
Excellent. So three questions if I may, and mostly follow-ups, I guess, to comments you've already made. Firstly, you sound very confident about sales and growth in, let's say, European and U.S. housing and renovation activity. However, we are seeing rising interest rates. We are seeing households facing a rising cost of living, in particular, energy bills. Do you feel that creates downside risk to renovation and new housing demands later in 2022? That's my first question. The second question is around European regulation and the slide that you've shown was very helpful, showing all the incentive for each country. But clearly we are moving progressively from incentives to renovate toward enforcement of renovation, if I'm reading that well.
The weaker building with energy ratings at G or F essentially might not be able to be rented or sold over time. You mentioned the example of France on that particular point. Do you believe that all European countries are gonna be moving in that direction? Lastly, if you could give us an update on the asbestos Chapter 11 process in the U.S. I understand there's been a few legal bumps on the road. Any color on that would be helpful. Thank you.
Thank you. I take the first two and Sreedhar, the third. I'm not worried about the volume trend, you know, for 2022 and beyond. When you see the amount, if I take the U.S. of unbuilt, you know, we have 3.8 million of housing needs in the U.S. as we speak, because for ten years we have built well below the necessary average, which is where we are today. We are at 1.6, roughly, million housing starts. Above in building permits, we are still at 10% or 15% above in building permits. For instance, one indicator which is interesting to follow is the number of homes which have been completed. Completion. This is the widest gap between starts and completion.
It could be related to supply chain disruption, it could be related to lack of workforce, but it bodes well. If I take a business like plasterboard, we know we are at the end of the process. You start with the envelope, the roofing, the siding, and you end up with plasterboard. When you have such a gap, and this is the largest in the last 20 years between starts and completion, that means you need to catch up because you need to complete and finish the home. Again, the underbuilt is there. Rising interest rates, when you look at the real interest rate, you know, with inflation, it's not big in the U.S. We have to think about that. Yes, there is rising interest rate, but there is rising inflation and wages. In nominal terms, we have to keep that in mind.
Your other question related to Europe energy bill and the lack of purchasing power for households. Unfortunately, you know, what we call the Passoire thermique, you know, the 5 million homes which are with a very, very bad grade of energy efficiency. Unfortunately, it's not within the households who have saved, and we have excess savings and can spend and are spending on renovation. You know, you have 36% of social housing in France with bad grade of energy performance. It means the social housing owners have to do it in order to reduce the bill for the low-income class. Energy bill is not affecting, you know, all the households the same way and the households who have saved in the last two years with these excess savings representing 88% of the GDP.
It's, you know, it's in France, it's EUR 100 billion. It's roughly one year of renovation market that has been with excess savings. It's going to be spent in durable goods. I'm truly convinced that after the COVID, with everything going on in the geopolitics, we'll spend on durable goods, which makes sense for your children, which makes sense for the planet versus easy short-term, you know, consumer spending. Last comment, I would say, if there is anyone to convince that energy efficiency is good for not only the planet but for your energy bill, the fact that the oil price is at $100 and the natural gas goes through the roof, it means we need to accelerate.
You know, the French government is just spending a lot to lower the energy bill of actually rented house for low-income class. If we had better insulated all those houses, you would not have to do that because you cannot do it indefinitely. It's better to invest in accelerating the home and public buildings renovation versus those short-term measures as a firefighter. I think the energy crisis on the cost side and also geopolitically, the fact that we are in a difficult geopolitical environment will accelerate the need in Europe to think differently about buildings' energy. EU regulation varies by country. I think it's also culturally. You know, in Italy, we have still this 110% cash bonus. It's an incentive. It's not enforcement, but it's an incentive on the cash side.
You are right, Arnaud, to say that in many countries, including coming from Europe ask every single country to renovate at least 3% of their public square meters every year on very low CO2 emissions for public buildings. It's a bit more enforcement than nice to have. It's moving progressively in the U.K. In France, it was already there in Germany and the Nordic countries. Yes, we are progressively moving towards more enforcement versus a nice incentive.
Yeah. Arnaud, on the asbestos, what you're referring is basically the ruling, procedural ruling. You just have to keep in mind, you know, our assessment, because of this ruling has not changed the financial assessment on this Chapter 11 process. The restructuring of the CertainTeed Corp, what we did is as per the Texas law, again, we are doing exactly as per the law. The reason why we are trying to establish this trust under this bankruptcy law, bankruptcy code is all basically to find a fair solution to all the genuine people who have suffered to make sure that they get their claims settled in a easiest possible manner without going through all the stress of the tort system. We just have to keep in mind that this Chapter 11 process, it's a time.
It takes time. We're talking about three-eight years' time. It's not something which will happen very quickly. The DBMP is the entity which is going through this process of Chapter 11. DBMP will defend its position very strongly because it's normal in the U.S. to have that kind of allegations which are baseless. Saint-Gobain, you know, you have, you know Saint-Gobain. Basically, again, the DBMP will stick to the things which are defined as per law, and they will defend their position very strongly.
You know, I've spent several years of my life in the U.S. You need to be patient with the lawyers in the U.S. It's always a bit lengthy than what you expect, but there is no worry. You know, we stay the course. We know it will take several years. We stay the course and, yes, the road will be a bit bumpy. It's not straightforward, but no particular worry. Just be patient. That's the U.S. legal system. Gregor from UBS. Gregor, the floor is yours.
Can you hear me?
Yep, very good.
Excellent. Maybe two questions and then also kind of follow-up. Just to summarize on the cost inflation and kind of the price that you need. Just looking at the math, I think you're seeing EUR 1.6 billion of inflation-ish again this year. I calculate on the EUR 25 billion or so of industrial sales, which are EUR 26 billion rather. Are you kind of saying you need another, I don't know, 6%-7%, call it 6%-7% price increase kind of average on average in the industrial business to be cost price neutral? Is that the right math? Then maybe a question on specifically the Americas, which I think has been sort of in reality the highlight of your year, which has obviously been a great year.
Margins there are 16.5%, you know, I think you gave the numbers for Continental. You know, it's extraordinarily strong, right? EBITDA margins of 31%. I guess the question is how sustainable do you think that performance is in the Americas, please? Thank you.
You take the.
Yeah. Your math is correct. You need to have that, you know, more than 6% to compensate this inflation. You know, it's 6%-7%, whatever range you take. You should apply on this EUR 25 billion + 25 billion, 26 billion sales. This is what it is. You just have to keep in mind that you know what is this. The last quarter was 9.5%, and we continue to put the prices up. We are, again, very confident to pass on this inflation even in 2022.
On the Americas, you know, we are running indeed with a healthy level of margin. I'm confident, you know, we are going to sustain that. If I take North America, we have very strong teams, very fast and extremely good quality of execution. You heard from our CEO, Mark Rayfield, during the Capital Markets Day. One example is indeed the excellent quality of integration from Continental Building Products. Not only, we have also a very strong presence in Canada, where we are gaining share, leveraging all the solutions. You know, we are coast to coast with six plasterboard plants in Canada. The economy in Canada is doing quite well. We have doubled our market share in insulation in Canada just by leveraging the full scope of Saint-Gobain.
Very good team, a full set of solutions and leveraging all that. I think I highlighted one or two years ago everything we are doing on cross-selling with our different product lines in North America and the fact that we are the number one building materials when you take the full scope of our offer in North America. Latin America is always a bit more bumpy. You know, Argentina had high inflation in the last years. Brazil could be, as we highlighted, a bit more difficult in 2022. But the opposite, Mexico, Northern Latin America is doing nicely. We are very strong in Mexico. We have made some recent moves adding a third float line in Mexico. I can tell you our float operations, our glass operations are running exceptionally well in Mexico.
It was not easy, and this is a tribute to our teams to start a third float line in the COVID in March and April last year, but it's already full and running very well. We added plasterboard in Mexico. We added a recent waterproofing and construction chemical acquisition in Mexico, which we expect to close in March. So northern of Latin America is growing. We have added a lot of small positions in Peru, in Argentina on all the offers. So basically, we are ramping up the full spectrum of Saint-Gobain in those geographies, and this margin is something we intend to sustain. Based also of course, on strong volumes. You know, I highlighted the strong dynamic of the U.S. housing market.
No surprise, you know, you have seen it was also part of our long-term ambition during the Capital Markets Day to increase the exposure of the group in North America. We are already at 24% of our EBIT in North America. We want to be there in sales. No surprise that in the last two-three years, I've pushed acquisitions in North America, whether it is Continental or GCP. I can tell you that we have had a lot of integration presentation teams to teams between GCP and our teams, including in North America, including David Molho with Thierry Bernard, were in Latin America some two weeks ago. The excitement on both sides, we are competitors, so we make sure that on the legal side we are safe.
The excitement on both sides to join forces is extremely high. I'm confident about what we will bring to GCP in North America, but not only, across the world. After that, we go to Nabil Ahmed from Barclays. Nabil, this is for you.
Yes, good morning. Can you hear me?
Yes.
All right. Thank you for taking my questions. I actually had three. First one maybe coming back on the mobility business within HPS. I believe you had several adaptation measures last year. So the question is, how happy you are with what you have done? Should we expect more in 2022, maybe again denting a little bit profitability? And if not, how much benefits you believe you're gonna get on profitability side from the adaptation measures you've done in the last few years? The second question was on CapEx. So you're guiding on EUR 1.8 billion, which is more or less where we were in 2019. How should we think about that? Is that a new norm for the group?
You know, if I think over the coming three or four years, is the EUR 1.8 billion enough for the sustainability investment and also the capacity investment you are making, especially when you consider the significant growth that may be coming from the renovation wave in Europe. Lastly, one final question maybe about Asia Pac, which, if I recall well, has been probably one of the most difficult regions in terms of passing on pricing and getting to neutral price-cost. I was wondering if you could comment and maybe break down your comment between, you know, the three main areas. You know, what is the price-cost situation in China, India, and maybe Southeast Asia as well.
I take the first one on High-Performance Solutions. You know, yes, we did over the last two years some restructuring, notably in the mobility market, but not only. We are happy about what we have done and the benefits. We see that very strongly on our share of High-Performance Solutions towards sustainable industry, improving nicely on profitability and delivering also on increasing backlog. Within mobility, if I stay just on that, we cannot go to the bone, I would say, because we know at some point the market will bounce back. If I were to know that, which I don't expect, the current automotive market in Europe is going to remain as depressed as it is today, yes, we will have additional restructuring measures.
Everyone expects it to rebound, and we know that when it will rebound, it will rebound strongly. We'll be asked to deliver a 30%, 50% growth on a particular product line for XYZ in terms of model. We are adapting our setup, but also keeping the competencies and the ability to restart when the rebound will come, even though we don't think it will be big before 2023. We are also investing, of course, on technology innovation for electric vehicle, where we have a very good run in terms of double-digit growth. HPS overall will increase in profitability in 2022 versus 2021. We are confident about the further improvement of profitability of High-Performance Solutions all in all in 2022. The CapEx, Sreedhar.
Coming to the CapEx, Nabil, as we guided in Capital Markets Day, our range would be 3.5%-4.5% of the sales. I would not guide on absolute figure because it will depend on the growth. We will proactively invest, especially when we see a potential to grow in a country which is a growing market. Growth will be the focus. As Benoit said, it's important to invest and ensure that we are able to serve the customers and not miss any opportunity of gaining the market share. Having said that, you have seen, we have demonstrated in the last three years there will be absolute discipline on CapEx. It will not be just spent without thinking through.
The criteria of having this financial criteria, of having the IRR of 20% is something which will be stringently applied on every single project. You have also seen, Benoit talked about in his presentation, that we are focusing on optimizing the maintenance CapEx. The focus is all about growth. That's about CapEx. Coming to the price-cost, I mean, again, you have seen. If you look at the Q4 is a good reflection of where we are. You have seen that again, double-digit almost in every single segment, other than the High-Performance Solutions. Again, we just have to keep in mind that High-Performance Solutions had the relatively lesser inflation than all other regions. You just have to keep that in mind.
The second thing is we do have challenge in High Performance Solutions, particularly again in mobility. I mean, the mobility has been, you know, while it has outperformed, but it has also been little disappointing because of the business model, the way it works, we have a challenge to pass on the price increase the way the inflation in a very short period of time. It happens with lot of effort, and we are pushing.
I think the question was specifically on Asia Pacific, if I understood it well.
I'm coming. I was giving.
Sorry, you are coming to Asia Pacific. Okay.
I'm giving the whole region.
That's all right.
Coming to the Asia Pacific.
India.
India.
Talk about India.
India has always managed to get the prices up. You know, just the fact that we have a brand, we have a brand recall, which is much more than anywhere in the world. India is a success story, so we have been able to push the prices up. China, we have been able to push prices up in certain pockets, clearly, where we are growing, in the light construction solutions, construction chemicals. Southeast Asia, you know, historically has been challenging, but we have been able to push the prices up, not to the satisfaction of what I would have liked to have. But it's a market which is like that. You know, it is challenging. But the teams are pushing the prices up.
Frankly speaking, you know, the challenge in Asia Pacific last year was more the COVID situation because we suffered also, whether it's Southeast Asia, India, for several months on lockdown restrictions, which was more this parameter than anything else. On energy in Asia, we have a lot of regulated markets.
Yeah.
It's not the same situation as Europe.
Okay. Benoit, if I could squeeze-
Follow-up?
Yeah. Yeah, I mean, just maybe if I could squeeze a follow-up on, you know, what you just said about Southeast Asia. Does it make you think about the footprints you have over there and whether this is worse for Saint-Gobain having a presence in Southeast Asia, given, you know, you had secularly poor pricing discipline and, you know, some inability to fully reflect cost inflation in your pricing?
We are doing extremely well in Southeast Asia.
Exactly. I think, you know, many times you need to take a broader view. Sometimes, you know, you have to reason it out based on the return on capital employed in that region. It's a growing-
I think that's a great message to.
Yeah, it's a growing market. It's important that we participate. Again, pricing is something to do with the local market dynamics, and you need to be just mindful of that. Just because you have certain challenging market, you don't walk out of that. As long as you're able to get the return on capital employed, you need to continue to invest.
You know, I'm very happy with our performance in Southeast Asia, India, of course, and China as well. Southeast Asia, we are leader in Vietnam, and we are adding product lines. We opened some construction chemicals plants. We entered, thanks to Chryso, in the Philippines. By the way, GCP is also in the Philippines, so that will strengthen our presence. We are strong in Thailand. Indonesia, we have 6 plants of construction chemical ready to host Chryso as additional product line. All those countries are profitable for us with a huge population. For me, if I think long term, Indonesia, Philippines could be, in the next 20 years, the Brazil of Saint-Gobain in terms of momentum. We are profitable, strong teams, local managers. We have a lady from Singapore managing Singapore and Malaysia. We have a Indonesian woman managing Indonesia.
Strong teams of Saint-Gobain. We are happy and growing, and I can tell you, whether it's also Hong Kong and both places, they are hotspots for us. Not easy last year because of the COVID, but the long-term trend on population is significant.
Understood. Thanks a lot.
Thank you. We go to Cedar Ekblom from Morgan Stanley.
Morning. Thanks very much, gentlemen. Two questions from me. On the energy and raw material cost inflation guidance for 2022 of EUR 1.6 billion, could you give us the energy component of that number? There's obviously a lot of debate around volume growth potential in the industry in 2022, considering the really strong 2020 and 2021 growth that you and the industry have also delivered. Can you let us know if in the Q1 to date you have achieved positive volumes in your Americas business, your Southern Europe business and your Northern Europe business? Thank you.
You take them?
Yeah, I mean, I already answered. You know, energy bill for 2021 was EUR 1.5 billion.
So-
No, I mean the inflation for 2022. You guided to EUR 1.6 billion of cost inflation in 2022, and I wonder if you could give us what the energy component is of that number?
Okay, it will be around EUR 500 million. Yeah.
We have basically the same inflation in 2022 versus 2021 compared to what we had in 2021 versus 2020. We manage it. We continue to do it. We have managed it in January. We have been proactive 12 months ago to anticipate some of the hedging. Let's move on. What is the next question, Cedar?
The next question was, did you see the trend of Q1? You know, she's referring to Southern Europe and Americas. It's too-
Well, it's premature, you know, January. We have a good January, but January is low in our business. We are confident, Benoit, on the volume growth for the full year, knowing indeed in the first half, it's not a secret that we have a high comparison basis. For the full year, we are confident about the volume growth. Beyond that, in the mid- to long-term, this kind of 3% volume growth we have seen and delivered in the last two-three years. That's a good dynamic on the ground, and the teams are fully mobilized. We are ready to meet and deliver on our customer demand. Was it-
Thanks so much.
Did we answer all your questions, Cedar Ekblom?
You did. Thank you very much.
Thank you. I think there is a question, I guess, on the Internet, from Patrick Millecomb from Value Square. Why you don't copy the successful one-stop shop for energy efficiency renovation in France to other important countries in Europe? We are doing that. Next time I should highlight what we are doing in the Nordics. What we are doing, I took some Czech example. I could take Poland, I could take Germany, I could take several, what we are doing in the UK as well on off-site manufacturing. It's not just energy efficiency, it's the complete renovation of buildings. Every country is doing a lot in terms of solutions.
You know, the motto, and it happens to be exactly in France, the motto of our fantastic brand of La Plateforme du Bâtiment, "Gagner du temps et de l'argent." Save time and money for the craftsmen. This has been the brand signature of La Plateforme du Bâtiment for the last 25 years. This is exactly what we are delivering in France, and we inspire other countries. Yes, we are pushing that, and there is a lot of best practice sharing on solutions across all Europe, but not only. There is one question from Glynis from Jefferies, again on the call. We'll take, I think after that, and after that back to Société Générale on internet. Glynis, the floor is yours.
Lovely. Thank you very much. I'll try and be short and sweet. Can you just give us a little bit of color just in terms of what you're seeing in terms of labor inflation within your own business?
Yes. Labor inflation has been, you know, again, depends on the country to country. It will be in the range of 3%-4%.
It's basically 1 point above what we had in the past. The very good thing, because for me it's extremely important, is to have everyone in good health. That was our priority for the last two years. Everyone fully motivated, and I can tell you that the employee satisfaction survey, the commitment of our team is super high, and they are all proud of the results we have delivered. They are all proud of the purpose of Saint-Gobain. It makes sense. We don't face at all what I hear from other industries about this big resignation or whatever. Our teams are mobilized on the ground in every country, including in the U.S., because they see that we have a purpose, we have a strategy, we have a plan, Grow and Impact, and we have the organization empowering our teams with full accountability.
For me, yes, there is a bit of inflation, but more importantly, the teams of Saint-Gobain are fully engaged, everywhere on the ground, delivering on our targets and strategy. That makes a difference.
Thank you.
Thank you. I go back to the internet, a question from Manish Beria from Société Générale. Can you remind us where you are very happy with price cost and areas where you are not satisfied and areas where you are happy and very happy?
I already answered that question.
I can tell you everyone is dedicated to that. Everyone is focused. To tell you also that things have radically changed structurally. In the U.S., for years, we were used to increase prices every second month when there is a need and where there is an opportunity. We did that, you know, last year on plasterboard, on roofing. In Europe, it was not so much the case in the past. It was more the once a year. Plasterboard last year in France, in Europe, was every quarter. Glass was every month. So we have structurally changed the dynamic of the markets. Of course, all the distributors are also moving up fast on this price realization.
It has changed structurally because everyone has adapted fast in this inflation environment, including in Europe, where we started a bit from behind versus U.S. or Latin America, where, for instance, hyperinflation in Brazil, Argentina was also well entrenched into the culture of the teams. I think we have covered all your questions. Thank you very much for your time, and I want to leave you again with the confidence that we are riding strong underlying trends for all our markets, that we have a clear strategy and a plan that we execute, and we are very committed to that. That we have a new Saint-Gobain in terms of business profile, in terms of financial performance on growth and profitability, and that we have teams extremely dedicated with a clear mindset to outperform and to have a winning spirit.
With that, I'm confident for 2022, and thank you very much.