Report by the Supervisory Board

For NS, 2018 was a year in which the organisation could concentrate fully on optimising its performance. NS achieved good results in the franchise KPIs for the main rail network in the Netherlands. It is important to sustain that level of performance, in part in the interests of passengers and the midterm review. NS’s new mission and vision were agreed in 2018. The new strategy this entails is now being developed. To keep NS financially sound in the future, the company has started a programme focusing on improving financial results now that the basic operation is functioning as it should.


The NS strategy Spoorslags Beter (2016–2019) identifies three core tasks: improving performance on the main rail network (including the HSL South), creating world-class stations, and helping the entire door-to-door journey. The Executive Board, supervised by the Supervisory Board, is responsible for implementing the strategy. Please see the report by the Executive Board for a description of the strategy.

Main rail network

The Supervisory Board is updated frequently on progress and developments in the key areas and the performance of NS in the franchise KPIs for the main rail network. The results, developments and ongoing and planned actions and projects are discussed in depth in every meeting. NS achieved good results in the franchise KPIs for the main rail network in the Netherlands. Firstly, it is important to maintain the current results because of the midterm review in 2019. There are also specific operational challenges, including performance on the High-Speed Line. NS is making every effort here to provide the best possible service. Independent research also shows that NS and ProRail have done everything they can to improve performance on this line. However, the current infrastructure and NS rolling stock have their limitations and investment is required. NS is aiming to improve performance over the next few years for example by updating the software and introducing new Intercity trains. Some milestones last year were the start of the Eurostar service between Amsterdam and London along the High-Speed Line and the start of the IC Brussels service. It is becoming increasingly important to have energy-efficient connections between Western Europe’s major cities. The train has an important role to play here, for example as an alternative to plane travel. In this regard, NS is looking at cutting the journey time for the Berlin service.


Stations are an inherent part of NS. The station experience accounts for 25% of the customer satisfaction score. As in the past, NS invested in improvements to stations last year, such as pleasant waiting rooms and upgrades to the toilets. NS is also installing 200 water taps at stations in an effort to reduce the use of plastic bottles.
NS’s retail policy is to let the market do what the market is now best able to do. NS is continuing to operate the Kiosk, StationsHuiskamer, AH to go and Railcatering businesses itself. The NS HEMA shops were transferred to the company HEMA on 1 October 2018 and the Broodzaak shops were transferred to HMSHost on 1 December. The transfer of the Starbucks outlets was completed on 1 January 2019 and the Smullers transfer is expected to be concluded in the first half of 2019. The Supervisory Board finds it important that these procedures are conducted with due diligence and it is monitoring the process to ensure that; after all, the staff working in these outlets are affected too.
Now that the refurbished Eindhoven station has come into operation, passengers can enjoy the space and facilities appropriate for a modern-day and future-proof station. Stations have become centres for economic activity. Large numbers of people work in and around stations. NS sees many opportunities over the next few years for property development, for example buildings above the track.

Door to door

NS is just one of the elements in the passengers’ journeys from door to door. That is why the company also wants to make a contribution to the first and last stages of the journey. Use of the public transport bicycle (OV-fiets) continues to rise; in the past year, NS added thousands of new bicycles. Parking facilities for bicycles and cars are also still expanding. The NS Zonetaxi service was extended last year: as of December 2018, NS Zonetaxi is available at an additional 244 stations and passengers can make use of NS Zonetaxi at 377 stations for their public transport journeys. Despite all this, it remains a challenge for NS to coordinate matters with its partners and to recoup its investments in the transport to and from the station in the longer term.

Abellio’s strategy

The foreign operations, run through our subsidiary Abellio, focus on two deregulated European markets: Germany and the United Kingdom. This means that good public transport is an export product for NS. NS also gains opportunities to acquire know-how and experience in passenger transport in foreign markets and in bidding for and operating franchises. An important precondition is that the risks associated with Abellio must be controllable. We discuss this regularly with the Executive Board and our shareholder, covering such issues as the risks associated with Brexit. The Supervisory Board regularly reviews Abellio’s strategy, paying attention to its markets and performance and what it means for passengers in the Netherlands.
The performance and financial results vary between franchises. The Supervisory Board considers this regularly. In the Greater Anglia franchise, there is a dispute with the franchise authority about the risk-sharing mechanism (CLE), which has led to an increase in the franchise fee. This may have financial consequences for Abellio and also affects other carriers in the United Kingdom. We are monitoring how this develops.

The future for NS

NS is concentrating first on delivering good performance in the interests of passengers and the midterm review in 2019. The Supervisory Board is closely involved in formulating the strategy of NS for after 2019. A temporary committee was put together with three members (Marike van Lier Lels, Pim van der Feltz and Gerard van de Aast) that was closely involved in the formulation of the new mission and vision. We consulted regularly with groups of NS staff headed by Executive Board member Tjalling Smit. In this process, we gave recommendations. The new strategy is now being developed; that process is due to be completed in mid-2019. In a meeting with 30 CEOs and directors, the Supervisory Board and the Executive Board discussed themes such as the business model, innovation, data, the political context, the NS ‘signature’ and other themes of social relevance. The recommendations that NS received on that evening will be taken into account in the development of the NS strategy for the future. NS’s goal is to keep the Netherlands accessible for everyone.


On 20 September, an appalling accident occurred at a level crossing with barriers in Oss, in which four children died. This was a tragedy for the victims, an unbearable loss for the families, relatives and friends and an incredible shock for the NS colleagues who were directly involved. On behalf of the Supervisory Board among others, NS offered its condolences to all those involved.

Individual redress for the Second World War

NS operated trains during the Second World War on instructions from the occupying forces. This is a black page in the history of the country and of our company. A past that we should not avert our eyes from. Various conversations with Mr Salo Muller, a Holocaust survivor, have shown that people still feel the need for individual compensation. NS does not believe that anyone benefits from lengthy legal proceedings. A committee started work in January 2019 under the chairmanship of Job Cohen. It has been tasked with handling individual compensation on moral grounds to an as yet undefined group of survivors and their direct descendants. The Supervisory Board endorses this.


It is crucial for NS to remain financially sound in the future as well. NS has invested substantially in new trains and IT, among other things. These investments are much needed but the outlay needs to be recouped. Passenger numbers are growing. However, NS only has limited options for growing its income. Fares for train tickets are subject to agreements with the government. However, NS has made a great effort in the past year to achieve savings and improvements in financial results, for example reducing the costs for overheads and the head office by €50 million and by implementing savings worth €100 million over the next few years in its operations through more efficient business practices. The Supervisory Board attaches great importance to this because of its focus on keeping NS future-proof.


Safety is a topic that is regularly on the Supervisory Board’s agenda. The Supervisory Board considers personal safety as well as railway safety and terrorism. Safety affects both passengers and staff. By attending internal exercises in this area, Supervisory Board members can see how it functions in practice. Last year, the Board also looked at the Tilburg staff project tROM. In this project, people on unemployment benefit worked between 2004 and 2011 on trains belonging to NS and the Dutch Railway Museum at the former NedTrain workshop in Tilburg. An independent committee has drawn conclusions based on the results of an investigation by the National Institute for Public Health and the Environment (RIVM), and made recommendations. According to the committee, the municipality of Tilburg, NS and the Dutch Railway Museum all cut corners. That is why all the parties worked together to come to an arrangement at the start of February 2019, each taking their share of the responsibility, with the aim of providing clarity to the people affected as soon as possible.

The question of whether NS staff may have been exposed to hexavalent chromium in the past (and if so, to what extent) is also being investigated.


NS is investing substantially in new trains and IT, among other things. The FLIRT trains and first New Generation Sprinter trains are now running. The new Intercity trains will be brought into operation from 2021 onwards. The decisions to make those investments were taken before 2018. In the past year, the Supervisory Board considered proposed investments in 88 additional Sprinter trains and bids for new franchises in Britain and Germany.

Risk management

The Supervisory Board concludes that NS has made significant progress in the past two years in developing a more professional approach to risk management. The Supervisory Board was able to supervise these developments in part through the meetings of the Risk and Audit Committee. The target set by the Executive Board in 2016 of having a mature risk management system has largely been achieved. As part of this, the (quantified) risk appetite was recalibrated and extended in 2018. The Supervisory Board receives a report every quarter on the risk appetite. Changes had already been made to the risk governance setup at NS. The Supervisory Board and Executive Board concur that risk awareness has increased at NS and risk management is increasingly embedded as a control instrument in the organisation.
Over the course of 2018, the Supervisory Board discussed the development of an internal control framework (ICF) on a number of occasions. The necessary preconditions, such as a supporting IT system, have been delivered. The ICF has been implemented for a number of processes. It will be rolled out further over the next few years. The Supervisory Board will play close attention to developments in the ICF in 2019. The Supervisory Board arranged to be informed in detail on the risks NS faces in cybersecurity and how it tackles them. NS has drawn up an action plan aimed at making progress in controlling this risk by the end of 2019. Cybersecurity is one element of the risk reports that the Supervisory Board receives.
A key point for attention in the first half of 2018 in particular was how NS was implementing the new GDPR legislation. Progress and the implementation were on the agenda on several occasions.

Corporate governance

Functioning of the Supervisory Board

The Supervisory Board reflects regularly on its functioning (both the board as a whole and the individual members) and how the board as a whole and its committees fulfil the supervisory task. This topic is also addressed in contacts among members and verbal evaluations that take place between the formal meetings, which fits with the Supervisory Board’s aim of making continual improvements. The Supervisory Board performs a self-assessment every year and conducts an evaluation with external support of how it functions every three years. That evaluation took place again in 2018. The Supervisory Board has discussed the findings in detail. The general conclusion from the investigation is that the Supervisory Board functions well. One point for improvement that has been implemented is the introduction of a ‘non-executive session’ prior to meetings with the Executive Board. In this session, the Supervisory Board members discuss the agenda for the meeting and update one another on contacts with NS colleagues, for example in working visits.

The functioning of the Executive Board and collaboration with the Supervisory Board

The Executive Board has functioned satisfactorily and performs its tasks well. The Supervisory Board has confidence in the Executive Board and professional relations between the two boards are good. Both the Supervisory Board and the Executive Board keep to their roles in the performance of their tasks. The Supervisory Board finds it important not to try and do the Executive Board’s job; instead, it challenges the Executive Board’s members, monitors decision-making keenly and supervises this process. At the suggestion of the Supervisory Board, the Minister of Finance, Mr Wopke Hoekstra acting in his role as shareholder, extended the appointment of Roger van Boxtel as Chairman and CEO of NS by one year to August 2020. This means that NS will be able to complete the midterm review under the leadership of Roger van Boxtel.

Changes to the Executive and Supervisory Boards

Executive Board

NS changed its senior management structure in 2016 in line with the Spoorslags Beter strategy. The Executive Board was expanded from two members to five. The Executive Board was at full strength with the intended five members for the whole of 2018. There were no changes in the members.
On 21 February 2019, Susi Zijderveld announced that she would be leaving NS on 1 May. As Chief Governance, Risk & Compliance Officer in the Executive Board, she is responsible for improving the level of professionalism of operations and risk management within NS. She is also responsible for NS Stations. Under her leadership, all the points for improvement have been dealt with vigorously that were identified following the irregularities in the tendering process for public transport in Limburg and the recommendations by the committee for the parliamentary inquiry into Fyra. Furthermore, the GDPR was implemented in NS and a privacy office set up. She has also made significant progress in the areas of safety and crisis management. The Supervisory Board thanks Ms Zijderveld for her hard work and contributions over the past few years and wishes her every success in her further career. The Supervisory Board has now started a procedure for finding her successor.

The Supervisory Board

The Supervisory Board has been back at full strength, with six members, since 2017. There were no changes in the members.

Meetings of the Supervisory Board and its committees

The Supervisory Board met seven times in 2018, of which two meetings were by phone. With the exception of one member who was absent on one occasion, all Supervisory Board members attended all the meetings. The average attendance of these meetings was 95%. One away-day took place with just the Supervisory Board members. The Supervisory Board has two permanent committees, namely the Risk and Audit Committee, and the combined Remunerations and Appointments Committee. All the committee members attended all committee meetings (100%). The Supervisory Board also set up an ad hoc committee for strategy in December 2017. This committee advises the Executive Board on formulating the strategy for after 2019. The current strategy (Spoorslags Beter) applies up to 2019.

Risk and Audit Committee

The Risk and Audit Committee consists of Gerard van de Aast, Pim van der Feltz, Jeroen Kremers, Marike van Lier Lels, Paul Rosenmöller and Janet Stuijt. Jeroen Kremers, the Supervisory Board’s financial expert, is the chairman. The committee met four times. The Chairman and CEO, the Finance Director and the Chief Governance, Risk & Compliance Officer, Audit Director and the external auditor are also invited to these meetings. Depending on the agenda, other individuals such as the directors of Legal, Group Control & Expertise and Risk are also invited. The main topics were the financial statements, the annual report, the six-monthly figures, the budget, the group plan for 2019-2023, risk management (including the outcomes of the stress tests) and risk appetite, audit plans and reports, reporting and management letters from the external auditor, progress in IT projects and risk control, the tax position and progress in the project implementing the recommendations made by Alvarez & Marsal (NS in Control).

Remunerations and Appointments Committee (combined)

The Combined Remunerations and Appointments Committee has Paul Rosenmöller as its chair and Gerard van de Aast and Janet Stuijt as members. The committee met three times in 2018. As of December 2018, the Chief Governance, Risk & Compliance Officer joined the meetings alongside the Chairman and CEO because the HR reporting line has changed at NS. The topics discussed included filling the profiles for successors to members of the Executive Board, talent development, a new and more extensive process for evaluating the Executive Board, the remuneration policy and the functioning of the Executive Board, both as a team and as individual members.
All members of the Supervisory Board are independent, as defined in the Dutch Corporate Governance Code. The Supervisory Board broadly subscribes to the best practice stipulations 2.1.7 through to 2.1.9 in the 2016 Code.


The Supervisory Board continued to be on good terms with the shareholder in 2018. We are in regular contact in a professional setting.

Employee participation

In 2018, elections were held within NS for the employee participation bodies. The collaboration with the new Works Council still needs to be fleshed out but relations are good.

Relationship with the external auditor

The external auditor attends all meetings of the Risk and Audit Committee as a matter of course. The external auditor also attends the meetings of the entire Supervisory Board when the financial statements and six-monthly figures are discussed. The Risk and Audit Committee also talks to the external auditor without the Executive Board present. The functioning of the external auditor is evaluated meticulously.

Financial results

NS achieved a net profit of €106 million this year, compared to a profit of €46 million in 2017. The underlying profit (disregarding one-off items) rose from €131 million in 2017 to €205 million in 2018. A proposal has been made to pay a dividend of €37 million, which is 35% of the result for 2018. The Supervisory Board critically assessed the results and discussed them with the external auditor.
NS has an ambitious investment programme of nearly €4 billion euros in the Netherlands over the coming years. These are long-term investments, largely in new rolling stock, that NS will finance partly with loan capital. As a result, NS will improve quality for passengers. NS is also investing €3.5 billion abroad, in particular in the lease of rolling stock.

About this report

The financial statements for 2018, as prepared by the Executive Board, were discussed by the Supervisory Board. The external auditor (EY) was present during the discussion. The financial statements are accompanied by the Executive Board’s report. We invite the General Meeting to adopt the 2018 financial statements. We also invite our shareholder to discharge the Executive Board and the Supervisory Board from its liabilities. The profit appropriation proposed by the Supervisory Board can be found in explanatory note 24 of the financial statements.
Thanks to the efforts and the contributions made by all NS staff in the Netherlands and abroad, NS has been able to concentrate once again this year on delivering the best possible performance for its passengers. NS ended the year on a positive note by achieving all the franchise KPI targets. The Supervisory Board would like to thank all staff and the Executive Board, and hopes it will be able to count on their great dedication and enthusiasm in 2019 as well.

Utrecht, 21 February 2019

The Supervisory Board