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Seeing 'huge momentum' for our company: Daimler Chairman

Investors may be disappointed after Daimler said it expected to see only a slight rise in revenue and earnings for 2016; however its chairman remains confident, despite the global economic headwinds buffeting the company.

"I'm seeing a huge momentum for our company which we believe will continue in 2016", Daimler's Chairman of the Board of Management, Dr. Dieter Zetsche told CNBC Thursday.

"We release our January sales results for cars tomorrow, and they will prove that we are starting the New Year with a lot of momentum. I'm very positive and optimistic about the further development in this year."

Daimler's earnings before interest and tax (EBIT) from ongoing business rose to 3.458 billion euros ($3.83 billion) in the fourth quarter, from 2.824 billion in the year-earlier period, just below the 3.486 billion euros forecast found in a Reuters poll.

Investing heavily in Daimler's future

Along with EBIT expected to only see a modest rise in 2016, some analysts were surprised after Daimler said its free cash flow would see a "significant" decrease from 2015's 5.9 billion euros ($6.6 billion). On Thursday, shares in Daimler were off as much as 5 percent during trade.

Zetsche explained that the cash flow would naturally be impacted in 2016, as the automaker continues to invest heavily in technology and its product range in all divisions.

"We have accomplished historic levels of performance in our company, due to our prudent investments we made in the past, and we are absolutely committed to continue this positive development for the future."

Daimler recently acquired stakes in the digital mapping business, HERE, and in the U.S. American telematics provider, Zonar Systems, in a step to gain a foothold in the car connectivity space.

"That's (what) I think the market should expect from us, that we put the money into future profits and not just into the bank."

Committed to 40% dividend payout ratio

Daimler announced a record dividend, along with its impressive sales for 2015, with Zetsche telling CNBC that the German firm was committed to a 40 percent payout ratio, following its proposal of its highest ever dividend of 3.25 euros per share for 2015.

"The dividend always should reflect on the one hand the earnings — they're off the last year — and we are committed to a 40 percent payout ratio. However, at the same time it should give a signal to the confidence and to the future and this is exactly what we mean. Our intention is a payout or dividend level which is sustainable with future growth potential, and that's exactly what we see."

A Daimler AG Mercedes Benz M-Class vehicle moves along the production line at the company's international assembly plant in Vance, Alabama, May 28, 2014.
Luke Sharrett | Bloomberg | Getty Images
A Daimler AG Mercedes Benz M-Class vehicle moves along the production line at the company's international assembly plant in Vance, Alabama, May 28, 2014.

Another factor keeping businesses on edge is the increased volatility in markets, however, after Daimler had a "fantastic January" in China, Zetsche saw no cause to worry over China when looking at the business' 2016 outlook.

Aside from China, like many auto companies, Daimler has been benefiting from low gas prices, however, the chairman expected the prices to eventually swing back with time.

"The demand and supply ratio will change over time, this is a typical cycle in all raw material industries we can see. So probably not this year, perhaps beginning of next year, but I'm pretty sure the year after, we will see a swing back of oil prices coming to more used levels again."

Reuters contributed to this article.

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