Cash flows and financial position

Borrowing funds for investments

An adjusted and condensed cash flow statement is shown below.

In 2023, NS invested €548 million (2022: €431 million) in the purchase of new trains and the upgrading of existing trains, maintenance and sustainability improvements to workshops, offices and station real estate, improvements to retail chain stores at stations, and in IT to support and implement train services, operations and customer contacts.

The net acquisition/disposal of non-current financial assets mainly concerns the sale of investments of temporarily surplus cash in money market funds. The negative balance of ‘Other’ is mainly attributable to the sale of Abellio UK.

The operating cash flow from operating activities is €229 million (2022: €366 million) and, as in previous years, insufficient to cover capital expenditure. The operating cash flows from operating activities, the capital expenditure and the development of the debt position in the period 2019–2023 are presented below, in millions of euros. Below that chart, the composition of the net debt is displayed.

NS has continued to invest in recent years, in spite of the drop in revenue. Over the period 2019–2023, cumulative capital expenditure exceeded the operating cash flow from operating activities by over €1 billion. Notably, that led to a sharp increase in net debt by over €1.1 billion to €973 million (2022: €755 million) as well as a sharp increase in gross debt by €1.4 billion to over €2 billion (2022: over €1.8 billion). If NS is to continue investing, it is important that operating results and the resulting operating cash flows from operating activities increase.

Creditworthiness remains stable

Standard & Poor’s (S&P) is an independent credit rating agency that has assessed NS’s creditworthiness for quite a few years now. One important indicator is the ratio between cash flows from operating activities and the company’s debt position. The fact that the Dutch State is the shareholder of NS is a positive factor in S&P’s assessment of our creditworthiness. In the most recent assessment (July 2023), the rating was an A with a stable outlook, unchanged from the assessment in June 2022.

Sale of Abellio UK leads to balance sheet contraction

Below is an adjusted and condensed balance sheet of NS.

NS’s assets include trains, inventories, software, company buildings and land for train maintenance activities and the accommodation of staff. In addition, we own properties that we lease out to third parties, for example to accommodate retail outlets at our stations. NS’s liabilities include private loans to banks, lease obligations and creditors.

The balance sheet total decreased sharply in 2023, mainly due to the completion of the sale of the operations of Abellio UK.

The size of the HRN franchise impairment was €1.197 billion at year-end 2023 (€879 million at year-end 2022). Combined with the related deferred tax asset, the impact on the balance sheet total is -€888 million (year-end 2022: -€652 million).