Good morning, everybody. I will take the disclaimer as read. During my presentation today, I will explain how our portfolio is now structurally geared to deliver sustainable mid-single digit organic growth. I will start with a summary of our business profile and our full year 2021 results just as a reminder. Nestlé is the largest food and beverage company in the world with annual sales of CHF 87.1 billion last year. Our portfolio is well diversified in terms of geography, category, and channel, and our strategy is focused on product differentiation and innovation. We have a unique geographic footprint with sales in 186 countries. Marco will cover Zone Europe in more details later. We operate in attractive high growth categories within the food and beverage industry, with leading market positions.
We are also less labor and capital intensive than we were in 2015, with almost 20% less employees and 82 less factories on slightly lower sales. We are also the largest investor in R&D in our industry, with annual spending of around CHF 1.7 billion. Let me now give a quick overview of the full year of 2021 highlights. We delivered resilient financial results in the context of the pandemic and inflationary pressures. Organic growth accelerated to 7.5%, supported by continued momentum in retail sales, steady recovery of out-of-home channels, increased pricing, and market share gains. The underlying trading operating profit margin decreased by 30 basis points to 17.4%, reflecting time delays between cost inflation and pricing actions.
Underlying earnings per share increased by 5.8% in constant currency, and sales growth was the major contributor to the increase. Return on Invested Capital decreased slightly to 14.2%, excluding the Wyeth business impairment. Free cash flow was CHF 8.7 billion as we increased CapEx temporarily to support growth. We returned CHF 13.9 billion to our shareholders through dividend and share buybacks. We also proposed a 27th consecutive increase of our dividend to 2.80 CHF. Over the last few years, we have done a lot of work to position our portfolio for sustainable mid-single digit growth. Our organic growth has steadily increased since 2017, with an acceleration in 2021 to 7.5%, partly due to higher demand in the context of the pandemic.
While we would not expect growth to continue at such exceptional levels, we expect to deliver mid-single-digit growth consistently going forward. The key factors behind our transformation on market share gains have been investments in high-growth categories and geographies, the acceleration of innovation, and the stepping up of digitalization. In addition, we have made a number of important portfolio changes through acquisitions and divestitures, resulting in a more focused portfolio. Within food and beverage, we operate in seven of the Top 10 fastest-growing categories. We command leading position in most of these categories, being the # 1 or # 2 player in five of the Top 10. This is a result of deliberate strategic choices over many years to focus on attractive high-growth categories where we can continuously differentiate our offerings and where we have the ability to win.
Our portfolio has evolved significantly over the last 10 years and is now much more focused on food, beverage, and nutritional health. Fast-growing categories such as coffee, pet care, health science, and plant-based now represent more than half of our sales, compared to a third in 2012. These categories represent an even greater proportion of our underlying trading operating profit. We have also significantly shifted our portfolio towards premium products, where we see faster growth, higher margin, and better protections from commoditization. Today, premium products represent 35% of our sales versus 11% in 2012. Our portfolio has also evolved by channel. Today, 14.3% of our sales are in e-commerce, almost five times more than in 2012.
This portfolio evolution has not happened only through M&A activity, but also through significant developments in our existing business from innovation to premiumization. Our portfolio is well positioned in our largest categories and in segments where we are sowing the seeds for future success. In our two largest categories, pet care and coffee, Nestlé has grown faster than the market over the last five years, and we have been gaining or holding market share in more than 70% of our business sales. We are also investing to build platforms for the future, such as vitamins, minerals, and supplements, as well as meat alternative, where we have also been growing consistently faster than the market. Beyond our largest categories and future platforms, we have done a lot of work to strengthen our market positioning and increase differentiation across all of our categories.
We focus on value added products in categories such as confectionery, infant nutrition, food, and water. We have been shifting our portfolio away from commoditized offerings to focus on differentiation through innovation as well as portfolio management. We are applying our expertise in nutrition, health, and wellness to develop breakthrough nutritional solution. For example, in 2021, we further enhanced our Human Milk Oligosaccharides offering with the launch of an infant formula made with five types of HMOs. In our dairy business in China, we continue to add new premium formulations to the Yinlu collection, including products to support mobility and immunity. Yinlu Senior Nutrition exceeded CHF 100 million of sales and has grown by a factor of 13 over the past 13 years. Local relevance is also an important element of differentiation. We ensure products are tailored to local taste and preference.
Our work to increase affordable offering is a good example. To make good nutrition affordable and accessible, we adjust processes and recipes, use local raw materials, and fortify products with locally relevant macronutrients. As a result of our focus on differentiation and accelerated innovation, we have seen a step up in market share performance across our businesses. For the third year in a row, more than 60% of our business sales are gaining or holding market share. We have also been focusing on businesses where we have strong market positions. Today, we have around 80% of our sales where we are the market leader or close follower. As I mentioned, innovation has been a key driver of our organic growth acceleration and market share gains. There has been a major shift to the way we approach innovation at Nestlé.
We have significantly reduced the time to market to capture consumer trends faster. To translate science into products more quickly, we use enhanced prototyping capabilities in our R&D centers, and we fund fast track projects. In 2021, more than 60 fast track projects resulted in launches in six-12 months. We have also been increasing the number of multi-market launches with greater sales impact. Innovation takes different shapes and form, and we are focusing on the following key consumer trends: premiumization and offering new benefits to consumers. Affordable offerings, particularly those that meet nutritional needs in emerging markets. Plant-based, both in born pure brands like Garden Gourmet, as well as more broadly across our portfolio with brands such as Stouffer's. We have around CHF 800 million of sales in plant-based food with strong growth.
Sustainability, with a key focus on carbon reduction and sustainable packaging. We have several brands that achieved the carbon neutral milestones in 2021, including Garden of Life. Other brands are expected to follow and become carbon neutral by the end of 2022, including Nespresso, Garden Gourmet, and S.Pellegrino. Digitalization. As discussed at our recent Investor Seminar, data and technology are a key driver to accelerate growth. Sales in e-commerce grew by 15.1% in 2021, following a high base of comparison in 2020. We have been stepping up our investments to support growth opportunities. In recent years, CapEx has been between 4%-5% of sales. In 2021, CapEx reached 5.8% of sales, and we expect it to be in the 6%-7% range in 2022, reflecting accelerated demand in some of our categories.
In 2022, around two-thirds of CapEx is expected to be allocated to pet care and coffee. The level of CapEx should start to normalize from 2023 onwards. Portfolio management has also played an important role in positioning our portfolio for growth, ensuring we focus on categories and geographies with attractive dynamics where Nestlé has an ability to win. Over the last five years, we have rotated around 20% of our portfolio, including buying and selling. There has been a steady stream of activity with more than 85 transactions. Significant recent actions have included the transformation of our global water business, including the sales of mainstream water brands in North America, and the acquisition of Essentia Water in functional water.
We also continue to build Nestlé Health Science into the leading global nutrition and health platform through targeted acquisition, including the core brands of The Bountiful Company in VMS and Nuun in Functional Hydration. Overall, portfolio management has had a meaningful positive impact on our financial performance. Acquired businesses since 2017 generated sales of CHF 6.8 billion in 2021, growing on average by 18% and contributing 80 basis points to organic growth. Acquisition and divestitures have also supported our margin expansion, contributing around 30% of our progress since 2017. We continue to look for opportunities and are determined to remain disciplined to protect and increase our ROIC, as we have demonstrated over the last few years. Through our actions, we have been creating significant value for our shareholders.
We believe strongly in being dependable and have a practice of providing sustainable year-on-year dividend increases in Swiss francs, a currency that typically revalues against others. In line with our capital allocation priorities, we undertake share buybacks when we have excess cash. Our share buyback programs have reduced our share count by 40% since 2005. The average share buyback price over this period was around CHF 63 compared to a share price which is almost twice as high today. Since 2005, the total cash return to shareholders from dividends and share buybacks was CHF 182 billion.
Overall, we have delivered a strong total shareholder return over the last 15 years with a compounded annual growth rate of 14%, significantly exceeding the STOXX Food and Beverage Index of 10%. To summarize, we believe we have a portfolio that is now structurally geared to deliver sustainable mid-single-digit organic growth. We have achieved this through sharpening our focus on food, beverage, and nutritional health, accelerating innovation, and increasing differentiation across our portfolio. Delivering mid-single-digit growth forms part of our value creation model that is based on having a balance between sustainable growth, profitability, and capital efficiency. Ultimately, in the long term, we will be successful by creating value for both society and our shareholders. Thank you for listening, and I will now hand over to Marco, who will cover regenerative performance in Zone Europe.
Thank you, François. Our business in Zone EMENA represents 24% of the group. With a workforce of less than 70,000 people, we operate in all key Nestlé categories, with significant share of coffee, pet care, food, and confectionery in our portfolio. Our iconic brands are Nescafé, Felix, KitKat, as well as NAN, S.Pellegrino, and Perrier, and of course, many others. We operate a manufacturing base of above 100 factories. Over the last few years, we have undergone a significant transformation to become more focused, competitive, and agile. To strengthen our consumer centricity and achieve an edge in category expertise, we have reshaped our organization with the establishment of seven categories with full P&L responsibility. This has enabled stronger portfolio management, resource optimization at the regional level.
As markets anyway remain the place where business is happening, we have evolved our way of working to a true matrix, leveraging the most out of the expertise of both sides. Some of the smaller countries in our region have been federated in bigger markets, achieving significant efficiency while maintaining consumer and customer proximity. This new organization, including above-market decision rights and operations, has enabled strong efficiencies in the value chain, delivering over CHF 600 million cost savings over the last four years. Our model is proving itself through the improved operational results, delivering stronger growth, reduced structural costs, and increased profitability with market share gains in most of our categories. We have also enhanced our portfolio with new business models in the rapidly growing segments, specifically in pet care and food, and also accelerated carbon neutrality achievements.
We have passed our carbon peak in 2019, and have further reduced total CO2 footprint last year, with 0.9 million tons in CO2 reduction and 2.6 million tons in CO2 removal. We are fit and ready now to start the new chapter of our growth as of January this year in the scope of Zone Europe. Consumers in Europe are demonstrating many of the same dynamics as in the rest of the world, but are quite special in one important dimension, their stance on environmental and social agenda. Already today, eco-active consumers who are highly concerned about the environment and feel responsibility to behave more sustainably, represent a larger share of population in Europe, up to half in Germany, for instance.
These consumers take more responsible behaviours personally, and the gap between I wish and I do on such behaviours is the smallest in Europe. This has strong implication for the brands, as those which succeed with eco actives enjoy much faster growth rates. We also observe a large share of population choosing better impact brands versus alternatives. Much as personal active behaviours is high, European consumers attribute responsibility for environment related challenges almost equally to the business and to the government. The government is tending to these expectations. Europe has ambition to become the first climate neutral continent, and is putting action and money to where the discussion is. Already now, the European Union is spending 25% of its budget on climate and is accelerating its Green Deal agenda with strong legislation, with rewards and penalties on key environmental and social dimensions.
We are seeing legally binding net zero targets for countries, and specifically in the food and beverage industry, introduction of eco-labelling, support to sustainable agriculture, and strong efforts towards collection and recycling infrastructure with extended responsibility for brand owners. Being the middle of this dense external context evolution, but most importantly, fulfilling our company purpose and regenerative promise, we are laying out our way forward towards regenerative performance. For many years, Nestlé has been strong in its sustainability journey. We realize, however, that to move will require the acceleration. We must integrate sustainability in each part of our businesses on a daily basis and in all areas of decision making. Going beyond the strong financial performance of the business to fund sustainability investment to a model in which delivering better impact on environment and society drives better business performance, and then in turn amplifies the positive impact we can deliver.
To move in the direction of regenerative performance, we had to evolve our operating model, the engine of our business, the virtuous circle. From investing in growth platforms, we will invest in growth for good. These include innovation, driving consumer relevance, brands with purpose to take the consumer with us towards more sustainable choices and behaviours, portfolio choices, driving growth of less carbon-intensive businesses, and sustainability investment to improve impact of our products. From focusing directly on market share gains, we will target to grow faster with our consumer and customer, and importantly, with external counterparts to advance those areas of change which are only collaboratively solvable. This will drive favourable consumer choice and lead to organic growth and share gains.
From successfully delivering profitable growth, we will target to grow total shareholder value as a return to all shareholders, stakeholders from moderate improvement of underlying UTOP margins to reduction of CO2 emissions and contributing to better diets. To close the circle, remaining an independent commercial organization, we will strive to generate resources internally to enable our performance. How? Through discipline in structural costs and via growth leverage, all as one team, the categories, the markets, and the functions. Our portfolio is a key element on the way to regenerative performance. Its evolution will take place along three areas. For all our products, we will work to reduce their environmental impact through acceleration of sustainable sourcing, evolution of packaging, use of renewable energy and logistics. While these efforts are part of our sustainability program globally, in Europe, we have an accelerated roadmap for their completion.
Transformation of our portfolio will also take place through prioritization along our virtuous circle of growth that has a better impact footprint, as well as entry and growth of born pure products. Along all these three areas, the fundamental effects of strong consumer relevance and differentiation remain at the core as we stay in the business of driving consumers. At the same time, in more and more categories, our sustainability performance will be an important choice driver for consumers and customers. In the next few slides, I intend to show only a few examples in what is happening already in our business. The first area illustrated with coffee, second with pet care, and the third with plant-based food category. Coffee. Coffee is a fantastic category, enjoying continued growth momentum and strong consumer involvement in Europe.
Taste, pleasure, convenience are driving the consumer choice, and albeit not much volume momentum, coffee is very well penetrated in Europe. Coffee continued to grow via premiumization. Sustainability has certain awareness in this category but is only emerging as a differentiating factor for consumer. In fact, beyond this vibrant facade, the broader coffee industry is facing also challenges, packaging, like everybody, green coffee sourcing specifically, and livelihoods of farmers. These are all issues that are only partially solved. Nestlé has sustainability at the core when it comes to coffee. As market leader with strong innovation that drives category growth, mega brands which shape consumer expectations, and scale and robust execution capabilities, we have taken the leading role to address these industry challenges and ensure long-term health for the category.
With many years of work behind us in this area, in 2022, we are 100% sustainably sourced, and by the end of the year, 100% of energy in our 14 plants will be renewable. With major initiative underway for recycling-ready packaging, regenerative agricultural practices for coffee, and contribution to farmers' livelihoods, we are building a regenerative future for coffee and shaping consumer choices for positive impact with the strength of our brands and their communication. As laid out in our virtuous circle of regenerative performance, making choices to drive growth of better impact products is a key element in our portfolio transformation. This is a live example of Lily's Kitchen, a beautiful modern pet care brand born in the U.K.
Already today, a Certified B Corp, Lily's Kitchen provides thousands of pet parents with 100% natural and healthy meals that enable family mealtimes with their furry friends. Lily's Kitchen has found a way to a millennial skewing audience, catering to their humanized relationship with their pet and delivering through an omni-channel presence, including a strong direct to consumer relationship. With strong capability complementarity in our Purina business, Lily's Kitchen has for sure a large space ahead for growth. Born pure products will play an increasing role in the evolution of our portfolio, and plant-based is a great example of our progress. In Europe, plant-based segments continues to enjoy strong double-digit growth driven by solid underlying consumer pool, with increasing penetration and high willingness to try among total population.
With consumers who retain plant-based products in their diets, we observe a doubling of purchase frequency with each next year, and a strong indication of this of future category growth. Nestlé has all capabilities needed to win. Already market leader with growing share, further geographical expansion potential, we have an advantage on taste and sensorial properties that is critical in cooking plant-based meals, as well as strong nutritional advantage with majority of our products with A and B Nutri-Score. Strong route to market and manufacturing capacities enable us to continue the growth for our Garden Gourmet brand, which by the way will become carbon neutral in 2022. Across all our business, our regenerative performance value creation is enabled by these important levers. Starting with people and organization, we realize and invest in capability and talent to drive our sustainability effort to scale while upskilling our total organization.
Our brands play an immense role to drive consumer choice and nudge towards better behaviours. Over 10 of our brands will become carbon neutral by 2025. Premiumization is key to drive relevance and performance in Europe, demonstrated by last year performances. This part of our portfolio enjoys accretive growth since years. Digitalization plays many roles, both in winning where our consumer and shoppers are, but also importantly in enabling a sustainability transformation with technology for speed and scale. Growing consumer relevance remain at the heart of our business, where innovative business models, including sustainable by design as well as strong R&D capabilities are critical. Relying on organic growth leverage, structural cost discipline to deliver total share value, we are taking our employees, consumer, customer, as well as stakeholders and shareholder with us towards regenerative performance, which we believe is the future for business.
Thanks a lot to all of you for listening and see you soon for the Q&A session.