Foreword by the CEO

2022 was a problematic and difficult year, both for our passengers and our employees. After the COVID-19 pandemic, we were confronted with incidents on the rails, problems in our timetable and - like other sectors in the Netherlands - severe staff shortages. It was not until 2022 that things largely stabilised once again. Despite these adverse events, we are confident about the future and the major role for NS in keeping the Netherlands accessible in a sustainable manner.

And we should bear in mind that the Netherlands was still in lockdown during the first few months of 2022 - with far-reaching consequences for NS. Fewer passengers, fewer peak-hour trains, very quiet stations and a host of restrictions, including face masks and social distancing rules. When the pandemic finally subsided, it was everybody's guess what passengers were going to do, NS was facing a major financial challenge, and shortages in the labour market made themselves felt even sooner than expected. Despite clear signs by the end of 2021 that the number of main guards was becoming insufficient, actual shortages had not yet been registered. We expected to be able to solve the problem, without realising that we actually had to scale down the timetable. When train frequencies began to increase after the lockdown period, the gap between the available number of employees and the numbers actually required grew rapidly, driven in part by persistently high sickness absence rates due to COVID-19 infections. Labour shortages meant it was more difficult to find new colleagues, while the number of people moving on within or actually leaving NS only increased. As we were unprepared for that situation, we were overtaken by developments. We tried to compensate for that by making adjustments on a daily basis, for example by cancelling train services. Before long, however, it proved impossible to schedule trains and staff when and where they were needed. On some routes, peak-hour trains were too short, which necessarily resulted in overcrowding. An ever-shrinking group of colleagues found themselves under ever higher levels of work pressure. This, and the cumulative effects of a major IT failure (3 April), a high-impact incident involving a high-voltage cable in the province of Flevoland, several accidents and regional labour disputes and strikes, meant that the company was under considerable pressure for a prolonged period of time. Passengers and employees alike suffered the negative effects of that.

We have failed our passengers

Scaling down the timetable

My colleague Bert Groenewegen, who was Acting CEO at the time, visited many employee offices in that period. These talks with colleagues made him understand that measures had to be taken. Due to the variety of interests involved and the resulting dilemmas, my colleagues on the Executive Board made some choices that were hotly debated. While everybody was eager to keep the trains running for our passengers, we were also aware of the enormous pressure on our colleagues. Added to that was the fact that following the COVID-19 pandemic, we witnessed an increase in incidents involving aggression both in our trains and at the stations. This felt like a red line that was crossed: treating our colleagues like that is simply unacceptable. In this complex situation, the Executive Board had no choice but to defend and protect its employees. This resulted in the decision to scale down the timetable from September 2022. The choice was right, but it was not a pleasant message for our passengers. As we scaled down the timetable, we resumed our structural recruitment efforts and introduced measures to alleviate the burden on our people. We relaxed our selection criteria and accelerated the recruitment process to attract as many candidates as possible. However, it took a while for these measures to produce visible effects. As a result, it was not until the last weeks of the year that the situation finally began to stabilise.

The past year's events brought home to us, the Executive Board, how important it is to listen to our colleagues. While NS employees do not expect us to be able to solve every problem, they do wish to be heard and for their interests to be taken into account in the decisions we make.

Persistent financial challenge

Over much of 2022, the need to overcome operational challenges took priority over our financial performance. We have now left the COVID-19 crisis behind us, but passenger numbers are still below the level required to balance our books. The increase in energy prices and the soaring inflation rate have not made things any easier. We are nevertheless making every effort to keep train fares affordable, so that rail travel remains available for as many people as possible. For example, this is why train fares only rose by an average of 4.3%, compared with an inflation rate of 10%. NS has been pursuing a cost-savings programme worth €1.4 billion since 2020. At the same time, however, we need to continue investing on behalf of our passengers. We ordered 60 new Intercity trains in 2022 to accommodate the anticipated growth in passenger numbers. We also invested in digitalisation and IT, in innovation and in our employees. Conditions on the labour market and the increasing numbers of people moving up within NS or leaving the company made us decide to further increase our recruitment and training efforts. Negotiations on a new CLA with the trade unions resulted in agreement on a pay rise of 8.45% - a record high for NS.

We are now in a position to start building a new balance

Driving trains across the border and in foreign countries

The non-domestic operations of Abellio should promote the interests of Dutch passengers. In that context, Abellio UK was no longer of strategic interest to NS. This is why the operations of this subsidiary will probably be transferred to the current management board of Abellio UK, via a management buy-out, in the first half of 2023. ScotRail’s operations were discontinued and transferred to a public entity on 31 March 2022. In Germany, the restructuring project for NS subsidiary Abellio Germany is almost complete. Since the first half of 2022, Abellio components have been fully operational as part of NS. In Germany, Abellio will continue to operate a limited number of franchises, in Lower Saxony and in central Germany.
In addition, we have retained our ambition to carry out cross-border operations. We want to add more destinations in the east. For destinations within a 700-kilometre radius, the train is becoming ever more attractive as an alternative to travel by car. Passenger numbers reflect this trend, with the train being quite popular among international travellers, especially during the summer period.

Staying on course towards the future

Since October we have ‘passed the curve’. We now have a basis for more robust and more predictable operations. Passengers should be able to rely on NS as they did before. While we still expect a major increase in passenger numbers in the period up to 2030, travel patterns and behaviours will be different. For our timetable to be effective, it should be adapted accordingly. This does not necessarily concern service frequencies; it may also concern train lengths or train departure times. Things will be different from what they were. This is inevitable, if NS is to become a crucial part of the solution to a range of challenges that society is facing - including the mobility agenda, the climate agenda and the need to ensure accessibility for a million new houses. This is why we will retain our focus on further improving our services, our stations and our sustainability and circularity performance. Needless to add, we will do so in close partnership with ProRail. Our collaboration on the Station Agenda is already proving successful, as reflected in a further rise in passenger appreciation ratings for our stations last year.

Proud

Even though I joined NS only relatively recently, I have already seen how proud my colleagues are of NS and how devoted they are to the company. This has generated the resilience and ongoing commitment that enabled us to weather the storms of the past year. On behalf of the Exercutive Board, I would like to sincerely thank all our employees for this. I am also grateful to the employee representation bodies, the Supervisory Board and our shareholder for their dedication and for the trust that they have shown in us.

On behalf of the Executive Board,

Wouter Koolmees
Chair and CEO