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Risk 9: Inadequate operating result


The risk that, due to costs rising faster than revenues, NS fails to achieve the required return on investment. This would lead to NS generating inadequate operating results and operational cash flows, rendering the company unable to finance its strategy in the future.


In the past few years, NS has invested substantially in order to achieve systematic improvements in operational performance. NS is also investing in new rolling stock and upgrades to existing rolling stock to cope with the growth in passenger numbers and the forecast growth in the years ahead. NS’s cost structure is relatively fixed because of the company’s capital-intensive nature. Over the next few years, NS will have to invest substantially to facilitate the growth in passenger numbers and fulfil its franchise obligations and undertakings to its stakeholders. As a result, costs will increase, putting additional pressure on the result, although the operational cash flow will remain stable. Retaining a good rating is important if we are to attract financing.


Using integral coordination based on clear-cut company objectives, NS has started initiatives in the financial functions, support staff departments and business units aimed at improving results and promoting a cost-aware culture. As well as financial interests, we also take account of the interests of society and the commercial sector, looking at staff, the deployment of rolling stock and the service model.

Risk control trend

NS takes measures to improve the results, aimed at increasing productivity and revenue as well as reducing the costs of indirect and support staff activities. In recent years, improving the result had lower priority than improving the operational performance. To that end, major investments will be made in the next few years, for example in rolling stock and IT. In 2019, the need to have healthy returns was given a higher priority again now that our operational performance is up to standard; this will enable NS to continue financing its investments and plans for the future independently and keep rail fares affordable. However, the initiatives to improve our returns have not been fully implemented yet.

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