"In the second half of the year, we will start to benefit from a kind of deflation on raw materials, on shipping, and probably from energy costs that are slightly lower than in 2022 (...) which will help us," Chief Financial Officer Yves Chapot told Reuters.
The group, whose tyres are also used in bikes and industrial equipment, now sees 2023 segment operating profit at over 3.4 billion euros ($3.76 billion) after previously guiding for over 3.2 billion.
Michelin, one of the world's leading tyre manufacturers along with Japan's Bridgestone and U.S. group Goodyear, also lifted its forecast for free cash flow excluding mergers and acquisitions to more than 2 billion euros from more than 1.6 billion.
Michelin's segment operating profit rose 11.4% to 1.70 billion euros between January and June, helped by price increases for its SUVs, sports cars and planes tyres.
Tyre volumes fell 3.7% in the period as customers were still reducing inventories in view of rising interest rates and a challenging market environment, the group said.
Michelin's net profit increased 44.7% to 1.22 billion euros in the period. The termination of its operations in Russia following Moscow's invasion of Ukraine, which weighed mainly on 2022 results, had a residual impact of around 50 million euros in the first six months of 2023, the group said.
($1 = 0.9040 euros)
(Reporting by Diana Mandiá and Gilles Guillaume, editing by Kirsti Knolle)
