Financial results

Another negative underlying result from operating activities

The following table shows and explains the income statement up to the result from operating activities. In the income statement, non-recurring items and exceptional accounting items, such as main rail network impairments, have been removed from revenue and costs. A reconciliation is then made to the result from operating activities as reported in the financial statements.

The result from operating activities amounts to -€148 million (2023: -€427 million). However, this result is heavily influenced by non-recurring and exceptional accounting items. This is why the development of the underlying result from operating activities is a more reliable measure of the development of our financial performance compared to the previous year. The underlying result from operating activities amounted to -€141 million in 2024 (2023: -€187 million). This is a limited improvement compared to the year before, but, as in previous years, inadequate for a financially sound NS. The following chart shows the changes in the underlying result from operating activities in the period 2019-2024, in millions of euros.

Insufficient revenue growth due to low passenger-kilometres

Ordinary revenue from passenger transport increased by 10% to €3,178 billion (2023: €2,887 billion) and revenue from Stations increased by 8% to €520 million (2023: €483 million).

The number of passenger-kilometres rose by 4.3% in 2024 compared to 2023. However, the level remains below the level in 2019, the last year before the COVID-19 pandemic, mainly due to the continuation of working from home. The number of passenger-kilometres in 2024 was 92% of the figure for 2019.

NS has raised fares for most train tickets and season tickets by less than the inflation NS has faced in recent years. In the period from 2021 until May 2023, the ‘indexation gap’ rose to 8.9%. In accordance with concession agreements and together with the expected inflation in 2024, a partial catch-up increase would result in a 8.7% rise in fares in 2024. However, at the government's request, NS did not raise fares at all for domestic trains within the main rail network concession in 2024. To compensate for lost revenue in 2024, NS received a one-off compensation payment from the government of €120 million. The other public transport providers receive this contribution on a long-term basis. For NS, a structural solution has not yet been found to prevent rising costs and the already incurred ‘indexation gap’ from having to be (partly) charged on through fare increases in the future. On top of low passenger growth, NS is also increasingly experiencing loss of revenue and additional costs due to external factors, such as strikes with a cause outside NS and infrastructure problems such as works, disruptions and speed limits.

Increased operating expenses due to high inflation

Excluding non-recurring and exceptional accounting items, operating expenses increased by more than 8% to €3,841 million (2023: €3,546 million). The rising costs are due to inflation and due to NS's focus on operational performance by taking measures such as expanding the timetable and ensuring sufficient colleagues and rolling stock to implement the timetable in a robust manner.

Personnel costs, which account for almost half of our operating expenses, increased by almost 9% to €1,723 million (2023: €1,587 million). The increase is partly due to the filling of vacancies among operational staff in particular (average staffing level increased by 4%) and the increase in wages (6.6% on average as of 1 January 2024) and pension contributions. In addition, the concession fee, high-speed line fee and infrastructure fee payable to the Ministry of Infrastructure and Water Management also rose to €533 million (2023: €463 million) – an increase of 15%¹ due to price increases and expansion of the timetable. Furthermore, €25 million in depreciation costs were taken early in 2024 due to certain software packages having a shorter lifespan than previously expected. Finally, 2024 saw a sharp increase in rates particularly for traction energy of the rolling stock at €136 million (2023: €109 million).

• 1This comparison excludes the €10 million high-speed line fee which was recognised in 2023 and related to previous years.

Impairment of main rail network concession

In 2020, NS recognised an impairment of the non-current main rail network assets due to the impact of the COVID-19 pandemic on NS. The impairment was mainly due to the limited expected earning capacity compared to the market rate of return and was partly reversed in the years 2021 and 2022. Following the award of the concession in December 2023 by the Ministry of Infrastructure and Water Management for the period 2025-2033, a reassessment was necessary. Reasons for this included the terms of the new concession, adjusted passenger number forecasts and increased interest rates. A downward adjustment in the forecasts and increased interest rates also prompted a €90 million increase in impairment in 2024. Combined with the €113 million lower depreciation in 2024 due to the impairment recognised so far, the net effect on the result from operating activities is €23 million positive (2023: €318 million negative). The HRN impairment does not generate any cash flows.

Net loss

The following table is the second part of the income statement.

Thanks to the result from operating activities and the exceptional items it includes, in combination with the above, NS is reporting a net loss of -€141 million (2023: -€380 million).

NS decided to capitalise construction period interest in relation to investments with effect from 2024 (a sum of €47 million in 2024), which had a positive effect on the net financing result in 2024. The net financing result for 2024 also includes a gain of €14 million (2023: €66 million) due to the release of provisioned liabilities and guarantees in relation to the restructuring in Germany. The result from discontinued operations mainly relates to the completion of the sale of the operations in Germany.

The effective tax rate is -5% (2023: 29%) and deviates from the corporate income tax rate of 25.8%, mainly due to a €37 million downward adjustment of the tax asset. The reason for the downward adjustment is the projected tax profits for the years up to and including 2033, which lead to the expectation that the receivable cannot be fully realised.