Continental showed sales of 22,2 billion euros for the first half of 2017, an increase of 10% compared with the same period last year. The company is therefore increasing its projections for the coming months by approximately 1%, bringing these up to 44 billion euros.

Rubber Group segment operation results, however, dropped to 2,3 billion euros, a result the company attributes to the steep increase in the cost of raw materials.

“Our company—with its innovative automated driver assistance technologies for efficient and connected driving—has once again outperformed the world market for private and utility vehicles,” stated Dr. Elmar Degenhart, President of Continental’s Executive Board.

“Our Tire and ContiTech divisions have also increased their combined sales by more than 9%. As expected, gains made by both these divisions have been offset by the steep increase in the cost of raw materials, which had a negative impact of 300 million euros on Rubber Group gains for the first half of the year,” he added, stating that rising costs should decline throughout the rest of the year.

The company forecasts an overall negative impact of approximately 450 million euros for the end of the year—50 million less than the amount originally forecasted at the beginning of 2017.

“This increase in capital expenditure takes into account our strong growth,” said Wolfgang Schäfer, Continental’s Head of Finance, to explain the 5,3% increase in capital expenditure—chiefly in software and equipment—as compared to last year’s 4,6%. For example, in the first half of 2017, expenditure on research and development increased 9,5% as compared to 2016.