Risk management
Our operations involve a number of uncertainties. Risk management is all about targeting uncertainties that could impede the achievement of the strategic objectives.
Organisation of risk management
To ensure permanent integral management of risks, risk management must move along with internal and external developments. We use planning schedules and analyses to present a realistic picture of the future impact of uncertainties and risks, so as to gain better insight into the reliability of project-related plans, policy choices and risk budgets. This supports our decision-making.
Recording and reporting
We have recorded identified risks, including the risk owners, in risk registers and assign quantitative scores to those risks using a single, uniform risk matrix. Every three months, NS reports the main risks for each business unit; those reports are discussed in the Executive Board as part of the planning and control cycle. Any risks that fall outside our risk appetite are reported immediately and escalated where necessary. The Executive Board reports on and renders account for the risk management and internal control system to the Supervisory Board after discussing it in the Risk and Audit Committee.
Risk appetite and risk tolerance
The risk appetite and risk management we are aiming for in six risk themes at NS can be found in our ‘risk appetite statements’. Each risk theme is linked to specific performance indicators with a quantitative bandwidth. Every year, the Executive Board evaluates and, if necessary, adjusts the risk appetite for each theme. The risk appetite of NS in 2024 has not changed compared with 2023.
|
Theme |
Risk appetite |
NS top risks |
|
Safety |
Averse |
Cyber, Public safety and Psychological absenteeism |
|
Compliance |
Averse |
|
|
Operations |
Averse |
Infrastructure, rolling stock and staff |
|
Finances |
Averse |
Revenue and Costs |
|
Reputation |
Averse |
|
|
CSR |
Tolerant |
The individual risks have been included in a risk matrix. The more to the right the risk is positioned (from A to F), the more likely it is to materialise. The higher its position in the matrix (from 1 to 7), the greater its impact on NS’s objectives should the risk materialise. The colours show how each risk relates to NS’s risk appetite and at which level within NS any residual risk should be accepted if no further mitigating measures can be taken. Click on a risk for a pop-up explanation.
Key changes in the risk profile compared with 2023
The risk profile within the themes of operations, finance and safety remains high. An improvement can be seen within the themes of compliance, reputation and CSR, where measures have reduced the risk.
Operations: the biggest risk is the infrastructure risk, which is leading to increasing disruption for train passengers and impact on product steps. Rolling stock and staff shortage risks remain high due to delays in deliveries and maintenance in the case of rolling stock and long-term labour market shortages in the case of staff. The combination of risks within this theme makes operations highly vulnerable.
Finances: in 2024, revenue developed less than expected. Passengers are returning to rail travel slower than expected. People are continuing to work more from home on a permanent basis and many people's purchasing power has decreased. In addition, the cost of salaries, rolling stock, materials, components and financing increased again in 2024 due to inflation, which NS is not passing on fully in train fares. As a result, the 'inflation gap' has become wider still.
Safety: However, we are noticing the effects of increasing coarsening and aggression in society and internal staff shortages on public safety. In addition, cybersecurity-related risks are increasing.
Group risks
The table below presents the current risk appetite for each risk theme plus the most important group risks.
Compared to 2023, the risks in relation to ERTMS and Digitalisation have been omitted from the risk list in the annual report. This is because the risk profile has improved in both of these areas, for example due to the adaptation of the ERTMS roll-out strategy and internal progress in digitalisation.
|
Group risk |
Development 2024 |
Control measures |
|
1. Infrastructure |
Infrastructure quality and availability were under huge pressure in 2024. Problems like temporary speed limits (TSL), track stability and safe usability increased. The number and duration of service interruptions increased as well, leading to full schedules and little scope for setbacks. Projects often experienced delays due to mounting ambitions, shortage of contractors, budget deficits and the implementation of ERTMS. Without a fundamental review of priorities, pressure on infrastructure will continue to increase. |
• Discussions with ProRail and the Ministry of Infrastructure and Water Management: align ambitions more to reduce pressure on infrastructure. |
|
2. Revenue |
In 2024, transport revenues fell short of expectations. Passengers are returning to rail travel slower than expected. Reduced purchasing power and the fact that more people are structurally working from home are both major causes. Operational issues on the tracks in 2024 are likely to have played a role as well. |
• Measures (that NS can take) to improve and sustain operational performance |
|
3. Rolling stock |
The availability of rolling stock was largely in order in 2024; there were enough trains to operate the timetable. However, robustness continues to be vulnerable, especially at peak times in autumn and for the longer term. The ICNG delivery schedule was adjusted in collaboration with Alstom and additional measures have been taken. |
• Measures for risk reduction and the robustness of (maintenance and repair of) rolling stock. |
|
4. Costs |
In 2024, the financial results of NS were under pressure due to rising costs for salaries, rolling stock, materials, parts and financing. |
• Savings initiatives since 2020. |
|
5. Staff |
NS will continue to face staffing challenges in 2024, mainly due to structural labour market shortages and staff retirement. Risks in respect of driving staff have improved in part but specific bottlenecks remain. The shortage of technicians is expected to last until at least 2027. A great deal of effort will also be necessary to avoid shortages in Safety & Service. |
• Extra efforts to recruit and retain relevant positions and offer an in-house training programme. |
|
6. Cyber |
The cyber threat level remains high and the frequency and complexity of (hybrid) attacks are increasing. The attack surface of NS is increasing too, due to the growth of (train) digitalisation. NS is also set to become subject to additional cyber legislation from Europe. |
• Systematic implementation of laws and regulations, including NIS2, CER and AI ACT. |
|
7. Public safety |
Passenger experience of public safety remained high, but employees’ perception of safety fell. The number of incidents due to aggression, threats and physical violence increased again in 2024 (by 5%). The number of injuries as a result of aggression has increased by an even higher percentage. |
• Intensive approach to the Leiden-Dordrecht, Zeeland Line focus areas and local specials like Breda, Zwolle and Maarheeze. |
|
8. Absences due to mental health issues |
Absenteeism levels at NS improved in 2024 but remain high; psychological absenteeism accounts for 3-4% of absenteeism. A positive trend is evident, e.g. the achievement of the targeted 60% of staff scoring NS an 8 or higher, although operations still require attention. |
• Conduct company-wide Risk Assessment and Evaluation of Psychosocial Workload. |