We delivered robust organic growth reflecting the good market conditions and the benefits of our strategy. Our focus on four faster growing markets (semiconductors, healthcare, clean energy and clean transportation) is showing results with 11.7% organic growth in those markets during the year.
These four markets represent 19.6% of our revenues. Operating margins expanded with the drop through on the volumes and the remaining benefits of our 2020 restructuring programme coming through. Free cash flow was lower than the prior year reflecting increased capital expenditure and higher working capital primarily reflecting growth of the business and increased inventory holdings to mitigate supply chain risk.
Pete Raby, CEO
Our purpose is to use advanced materials to make the world more sustainable and to improve the quality of life. In 2021, we set out five long-term goals for our business together with intermediate goals for 2030.
In light of Russia’s invasion of Ukraine, we took the decision to stop our trading activity with Russia in February of 2022.
Over the last six years we have significantly improved the health and performance of the Group, improving growth rates and profitability, and substantially reducing liabilities. Continuing these improvements, we completed a payment of £67 million into our UK pension schemes at the end of 2022 to move those schemes to a fully funded position on a long-term objective basis.
This eliminates the £17 million per year we were due to pay to the scheme over the next three years and gives us an expectation of modest or zero payments after 2025, and is an important step on the way to an eventual buyout of the scheme.
We held our first capital market event in nearly 10 years in December of 2022 during which we laid out our investment proposition and the medium-term targets for the Group. There are four reasons to invest in us:
In early January 2023 we experienced a significant cyber attack on our business. While the attack was detected relatively quickly, and we were able to limit the damage through rapid compartmentalisation of the network, the attack resulted in the encryption of a number of our applications and data storage systems, and damage to network devices.
Following the incident, we have been progressively restoring our networks and systems including rebuilding of certain applications and file systems where they were not recoverable. We have engaged a number of specialist organisations to help us with the restoration and with wider network security. In addition to restoring our systems and infrastructure, we are also accelerating our IT modernisation programme to improve our cyber defences and to provide greater resilience in the event of a subsequent attack.
During the first quarter we continued to experience good levels of demand in most market segments. Looking at the whole of 2023, we are expecting slowdowns in the large industrial economies as inflation and the impact of central bank tightening hit consumer and business activity.
We expect some improvements in China following the end of COVID-19 restrictions and that may support growth in South Korea and Japan, and we expect good growth in India. We expect to make further progress in our faster growing markets given the strong underlying demand drivers and the investments we have been making there. We expect inflation to reduce as we go through the year. We will continue to pass on inflation in higher pricing to our customers and expect our pricing and continuous improvement efforts to more than offset inflation as they have in prior years.
Pete Raby, CEO