Melissa Schaeffer
Senior Vice President and Chief Financial Officer at Air Products and Chemicals
Thank you, Seifi. We have made great strides at building our growth strategy this year, completing multiple projects and winning exciting new projects. At the same time, we continue to focus our base business and deliver excellent results for the quarter and the year. We grew our EPS 8% this year, overcoming various external challenges and absorbing the cost of additional resources needed to support our growth strategy. Our distributable cash flow remains strong at $2.7 billion. Furthermore, these large-scale projects currently under development will substantially add to our earnings once we bring them on stream. I share Seifi's conviction that for Air Products, the best is indeed yet to come. This is a testament to the hard work and commitment of the people of Air Products. And I, too, want to thank them.
Now please turn to slide 15 for more details on our full year results. Sales grew 17% to more than $10 billion. Volume and price together gained 7%. The 5% volume growth was primarily driven by our EMEA and Global Gases segment. Although the adverse impact from the pandemic has eased through the year, it still had a negative impact on FY '21. Price improved every quarter in all three regions and across most major product lines. Overall, price increased 2% and our merchant price was up 5%. EBITDA was up 7%, approaching $4 billion due to favorable price, currency and equity affiliate income, which was partially offset by higher costs. EBITDA margin declined 330 basis points, of which 200 basis points are attributed to higher energy pass-through, which increases sales but negatively impacts margin. ROCE was 160 basis points lower. The increase in the denominator from our additional $5 billion of debt raised last year reduced ROCE by about 300 basis points. Adjusting for the cash on our balance sheet, our ROCE would be 14.2%. We expect ROCE to improve as we deploy the cash and bring projects onstream. Now please turn to slide 16 for a discussion of full year EPS. Our full year adjusted EPS from continuing operations was up $0.64 or 8%.
Price net of variable cost was again strong, favorable $0.34, the fourth consecutive year of double-digit EPS net price improvement. Volume was flat as acquisitions, new plants, merchant recovery and higher sale of equipment activity were offset by lower contribution from Lu'An. Different business mix caused volume to have a positive impact on sales but minimum impact on profit. Our costs were $0.46 unfavorable, primarily due to the addition of resources to support our future growth and higher planned maintenance costs. Currency was favorable $0.35, primarily driven by the Chinese RMB, euro, British pound and South Korean won. Our equity affiliates also had strong underlying business results, adding $0.23, with several joint ventures reporting stronger medical oxygen sales. Nonoperating income was $0.16 favorable, primarily due to lower pension expense. Interest expense was $0.12 favorable due to the $5 billion of debt to support our future growth projects. Our effective tax rate of 18.9% was roughly equal to last year, and we expect an effective tax rate of 19% to 20% in FY 2022. Now please turn to slide 17 for a brief discussion on our fourth quarter results. Compared to last year, sales increased 22% to more than $2.8 billion.
Volume, price, energy pass-through and currencies were all up. Volume improved 9% as strong hydrogen and merchant demand and new assets more than offset reduced Lu'An contribution. Prices were up again with improvement in all three regions. This is the 17th consecutive quarter of year-over-year price gain. Overall, prices were up 3% in total, which equaled a 6% increase for the merchant business. We experienced significantly higher energy costs in our merchant business this quarter. The situation is particularly challenging in EMEA due to the extremely high natural gas and electricity costs. Our onsite business, about half of our total company's sales, has contractual protection from energy cost fluctuations. We are actively executing additional price actions across product lines to recover the higher energy costs impacting our merchant business. EBITDA climbed 11%, exceeding $1 billion mark as favorable volume, price, currency and equity affiliate income more than offset higher costs. EBITDA margin declined 380 basis points primarily due to higher energy pass-through, which negatively impacted margins by about 300 basis points. Sequentially, sales were up 9%, supported by 5% stronger volumes and 1% higher price.
EBITDA grew 7% sequentially as better volume, price and equity affiliate income more than offset higher energy costs. Now please turn to slide 18. Our fourth quarter adjusted EPS was $2.51, which is $0.32 or 15% above last year. Volume was a favorable $0.19 and price, net of variable costs contributed $0.04 as our price increases exceeded variable cost inflation driven by higher power costs. Like the prior few quarters, our plans to add resources and strengthen our organization to support growth have increased our costs. We also saw higher costs due to disruptions across the supply chain in all three regions. Currency and foreign exchange contributed $0.06, primarily due to the Chinese RMB and British pound. Equity affiliate income added $0.09 on strong underlying business results. The $0.04 of nonoperating income was primarily driven by lower pension expense. The effective tax rate of 18.1% was 130 basis points higher than last year due to the last year's higher share-based compensation benefits and a tax benefit associated with the PBF acquisition. Now please turn to slide 19.
The stability of our business allows us to continue to generate strong cash flow. Over the last 12 months, we generated about $2.7 billion of distributable cash flow or almost $12 per share. From our EBITDA of about $3.9 billion, we paid interest, taxes and maintenance capital. Note that our maintenance capital is a little higher than usual, driven in part by spending on our new global headquarters, which is essentially now complete. From the distributable cash flow, we paid $0.45 or about $1.3 billion as dividends to our shareholders and still have about $1.4 billion available for high-return industrial gas investments. This strong cash flow, even in uncertain times, enables us to continue to create shareholder value through increasing dividends and capital deployment. Slide number 20 provides an update of our capital deployment. As we discussed last quarter, we've extended our time horizon another five years to fiscal 2027. We see tremendous project opportunities beyond 2022 and the investment potential far exceeding the original capacity of $15 billion. Based on this updated view, we see our capital deployment potential reaching approximately $34 billion through fiscal 2027.
The $34 billion includes roughly $10 billion of cash and additional debt capacity available today, almost $17 billion we expect to be available by 2027 and about $7 billion already spent. We still believe this figure is conservative given the potential for additional EBITDA growth, which generates additional cash flow, and therefore, additional borrowing capacity. We will continue to focus on managing our debt balance to maintain our current targeted A/A2 rating. So you can see we have already spent 21% and have already committed 67% of the updated capacity we show here. I should note that this is as of September 30, so it does not reflect the closing of the Jazan Phase one but does include the Louisiana project. Before I turn the call back to Seifi, I would like to share with you that we plan to reorganize our reporting segments starting in Q1 of FY '22. Our EMEA segment will be separated into Europe and a Middle East and India segment to reflect the addition of the significant Jazan project in the Middle East segment and to provide more visibility for our geographic regions. In addition, our Global Gases and Corporate segment will be combined. We will provide historical resegmented financial information before the year-end.
Now to begin the review of our business segment results, I'll turn the call back over to Seifi. Thank you very much, Melissa. Now please turn to slide number 21 for our Asia results. Sales increased 6% compared to last year on 5% favorable currencies and 1% positive price increase, the 18th consecutive quarter of year-on-year price improvement in this region. Volumes were flat with new plants, mostly outside of China, offsetting the lower Lu'An contribution. Regarding Lu'An, there is no change for the -- from the previous updates that we have given you. The plant continues to operate at full capacity despite the coal shortage in China. As I said last quarter, under the interim supply agreement, we are recognizing reduced fees through fiscal year '22 before we return to the full year fee in 2023. This quarter, China's effort to reduce energy usage and intensity, the so-called dual control had a modest adverse effect on our results. It reduced some merchant customers' demand and caused isolated disruptions in operations. We continue to monitor this developing situation very closely. In the long term, though, we do see positive growth opportunities as China continues to focus on reducing its carbon intensity. EBITDA for this region grew 3%, supported by favorable currencies and price. Costs compared unfavorably primarily due to higher variable energy costs, resources needed to support project and start-ups, the timing of China government incentives last year and the disruption called by its dual control policy to reduce energy consumption. Sequentially, EBITDA and margins were lower as higher costs more than offset better volumes. Price is up but rounded to zero. Now I would like to turn the call over to Dr. Serhan to talk about our Americas results. Dr. Serhan?
