IBERSOL Annual Report and Consolidated Accounts 2017

Consolidated financial analysis Other operating revenue amounted to 9.8 million euros, 0.7 million euros higher than in 2016. In 2017, almost two-thirds of the value was contribut- ed by Eat Out Group, of which an important component corresponding to supplier contributions. In 2016were considered the alreadymentioned com- pensations for the traffic losses ,caused by the implementation of tolls on the ex-Scuts, amounted to 2.4 million euros. Operating Costs Consolidated operating costs reached 425 million euros, an increase of 70,9% over theprevious year. The incorporation of a substantial component of the franchise business and the increase of activity in concessions, characterized by higher rents, contributed for higher costs than the increase inactivity. Without EOG, increaseof 16.5%, representing90,9%of turnover (2016:90,4%). Gross margin Gross margin increased from 76.1% in 2016 to 77.1% in 2017, reflecting the ef- fect of the consolidation of the business of Eat Out Group, which by its typol- ogy has a higher gross margin , in particular by the contribution of royalties from the franchise business. Without consideringEatOutGroup contribution, thegrossmarginwas 75.6% (2016: 76.2%). The effect of the VAT rate reduction in Portugal, in the gross margin, was absorbed by the increase in the promotional aggressiveness levels and the weight of counters and catering events in total sales, charac- terized by lower margins. 108