IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 Gross margin The gross margin was 74.5% of business volume, 1.4 percentage points below the previous period (2019: 75.8%), demonstrating, on one hand, the effect of losses in terms of perishable raw material in the month of March, following an abrupt interruption of restaurant activity and, on the other, the limitation of operation to concepts requiring more ag- gressive promotion, and thereby with lower margins. Personnel costs Costs with personnel dropped 29.9%, with this caption having increased during 2020 to 36.9% of business volume (2019: 31,3%). In order to protect jobs, in the face of this abrupt drop in activity, the Group’s companies signed on to the ERTE in Spain and the simplified and normal lay-off policies in Portugal. The ERTE in Spain began on 18 March and still applied to 42% of staff as at 31 December 2020, which resulted in grants in the total amount of approximately 6.8 million Euros. In Portugal only 67 employees remained in a state of normal lay-off at this same date (1.2% of the total workforce). The simplified lay-off re- gime applied between April and June, during which the group obtained gants of approximately 3.5 million Euros. External Supplies and Services External Supplies and Services costs dropped 33.7%, to 24.1% of busi- ness volume in 2020, which represents an increase in the relative weight of this caption of 2.5 percentage points when compared to the percent- age of 2019, which was 21.6% After the second quarter, some service agreements were cancelled and renegotiated, which allowed for the mitigation of some of the losses due to the closing of restaurants. However, the increase in sales through delivery forestalled any further reduction of the weight of this caption. Due to the application of the “IFRS16 Practical Expedient” for dealing with benefits to previously agreed leases, this caption reflects 10.4 mil- lion Euros of definitive rent discounts for 2020, agreed with the les- 31