The operating expenses of NS rose by €661 million from €5,084 million in 2017 to €5,745 million in 2018. This was mainly due to higher personnel expenses (€133 million), higher costs for the infrastructure levy and franchise fees (€350 million) and increased ‘other operating expenses’ (€113 million). The increase was primarily due to the start of the new franchises in the United Kingdom and Germany.
Costs in the Netherlands fell by €32 million. If adjustments are made for exceptional income and expenditure, costs in the Netherlands were comparable to the level in 2017. Despite the influx of new trains and the wage increase of 2.3% based on the collective labour agreement, we were able to improve our result due to the increase in sales, a reduction in overhead and indirect costs, and productivity improvements in various processes. Now that the main performance indicators and customer satisfaction are up to standard, the operating result is being given a higher priority, although this is of course subject to the condition that the operational performance should not be affected so that we satisfy the franchise agreements made with the Ministry of Infrastructure and the Environment and meet our passengers’ expectations.
(in millions of euros) | 2018 | 2017* | | |
| | € | % | € | % |
Wages, salaries and social security charges | 1,973 | 34 | 1,818 | 37 |
Other personnel expenses | 82 | 1 | 69 | 1 |
Staff hired in | 111 | 2 | 146 | 3 |
Depreciation, amortisation and impairments | 361 | 7 | 369 | 7 |
Use of raw materials, consumables and inventories | 527 | 10 | 505 | 10 |
Own capitalised production | -154 | -3 | -161 | -3 |
Subcontracted work and other external costs | 519 | 9 | 475 | 9 |
Infrastructure levies and franchise fees | 1,280 | 22 | 930 | 18 |
Other operating expenses | 1.046 | 18 | 933 | 18 |
Total operating expenses | 5.745 | 100% | 5,084 | 100% |
- *
The 2017 figures have been adjusted to allow proper comparison
Wages and salaries
Wages, salaries and social security charges rose by €155 million from €1,818 million in 2017 to €1,973 million in 2018.
The increase in the Netherlands (adjusted for the sale in 2017 of Qbuzz) was 3%. This increase is primarily the result of the wage rise agreed in the collective labour agreement of 2.3% with effect on 1 October 2017 and 1 October 2018. We also faced a slight rise in the social security charges and supplements for irregular hours. The average number of FTEs of 18,734 was almost the same as in the previous year. The increase in wages and salaries in the Netherlands was offset to some extent by a decrease in the costs of hiring staff in, limiting the combined increase to 0.7%.
In the United Kingdom, wages and salaries increased by €142 million, an increase of 26% after allowing for exchange-rate effects. This is caused by the growth in the franchises. The average FTE count rose by 24.4% to 12,936 FTEs. The increase in wages and salaries and in FTEs is largely explained by the start of the West Midlands franchise in December 2017 (€156 million and an average FTE count of 2,430). The exchange-rate effect was €6.9 million and weakened the increase when expressed in euros.
In Germany, the rise in wages and salaries of 47.3% was caused by the start of the DISA and RRX franchises in December 2018 and the full consolidation of WestfalenBahn with effect from December 2017. The average number of FTEs rose by 49% to 1,657.
Infrastructure levies and franchise fees
The access charges for the rail infrastructure (infrastructure levy plus franchise fees) increased by a total of €350 million to €1,280 million. In the Netherlands, this item increased by 3.4% to €394 million (2017: €381 million). The costs were €741 million in the United Kingdom (€443 million in 2017). This increase was due to this being the first full year for the West Midlands franchise (€134 million) and to an increase in the infrastructure levy for the ScotRail franchise (€86 million). In Germany, the costs were €145 million (2017: €106 million). The increase of €39 million was due to the start of new franchises and the full consolidation of WestfalenBahn.
Other items
The other operating expenditure increased by €113 million in 2018, mainly because of higher costs for the lease of rail rolling stock at Abellio UK (€97 million) and Abellio Germany (€23 million) due to growth in the existing franchises and the start of new franchises.