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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

features

Interview: Morten Hellevang

Norwegian gym chain EVO Fitness has created a strong set of operating policies for dealing with the business challenges of the pandemic, as its CEO explains to Tom Walker

Published in Health Club Management 2021 issue 2
EVO Fitness CEO, Morten Hellevang
EVO Fitness CEO, Morten Hellevang
While the pandemic has been disruptive, we see this period also as an opportunity

We were given just two hours to close down our businesses,” says Morten Hellevang, describing the day in 2020, when the Norwegian government placed the country in COVID-19 lockdown.

“A very long three months later, the fitness sector was the last industry to reopen,” he says, suggesting the lockdown provided gym operators with plenty of time to plan their return to business. 

What Hellevang and his team did during lockdown has seen the company weather the COVID-19 storm well across all its trading markets – Norway, Finland, Switzerland, Austria and Germany.

“When we were forced to close, we quickly concluded that – as a nationwide chain – we wouldn’t get a lot of sympathy from our members,” says Hellevang. “Therefore, we decided that during the period of closure we wouldn’t charge customers anything – that we would carry the loss entirely. 

COVID-19 LOSSES
“It was a decision that ended up costing us NOK40m (US$4.3m, €3.8m, £3.4m) in revenue during the three months we were closed – a significant loss for us. 

“However, it was a strategic decision. We identified that the most important thing for us was to have as many members as possible when we were allowed to reopen.

“Instead of trying to keep a little money coming in from members – or charging and converting them to some form of digital memberships – we decided to take the loss and keep members happy.”

The decision to not charge for memberships was accompanied by a drive to keep the membership – and the wider Norwegian public – engaged with the brand throughout lockdown. “We furloughed most of our staff, but kept on some of the roles we considered central,” Hellevang says, adding that among those roles were marketing ones. “We felt marketing would be a key factor in the process to plan for reopening.”

“Our strategy was to be very active across social media, pushing the message that ‘we’re still here’. 

“That was supported by offering everyone, not just members, free exercise programmes. 

“We also used the lockdown to refurbish and expand a couple of our clubs – so we promoted the gym development work we were doing on social media.”

While activating itself on social media to keep the brand in people’s minds, one thing EVO didn’t do was spend a lot of time communicating directly with members. This too, was a strategic decision. 

“We were very active on Facebook, Instagram and other platforms – but only sent our members one direct email or text message during the entire period,” Hellevang reveals. “And that was to tell them, at the beginning of lockdown, that we were freezing memberships.

“The reason for this was that every time we sent an email out, we would lose a couple of hundred members. I think it’s because when you send out a direct message, you’re reminding people of something they are paying for – and something they might want to cut. 

“When you speak to customer service or marketing people they normally say it’s important to communicate with your members directly – especially during a period like we’ve just had,” Hellevang explains.

“Well, we decided not to do that, because there is a real cost for doing it – and that cost should not be underestimated.”

SUCCESSFUL APPROACH
Keeping its marketing department operational throughout lockdown also helped EVO map out its plans and be ‘reopen-ready’. 

“At the point of reopening, we had all our ‘return to gym’ campaigns ready to go,” Hellevang says. “Advertising space was booked and social media was all set – all we had to do was push the button and everything began rolling.”

Hellevang says this allowed the company to bounce back quicker than many other operators. 

“Thanks to our approach, we had a couple of tremendously good weeks – in terms of sales – after reopening,” he says.

“Overall, across the Norwegian fitness market, the average loss of members due to lockdown has been around 13 per cent. For us, the figure is roughly 7 per cent. 

“So while we too have lost members – according to the figures we have – we’ve lost less than most of the other operators. So I think the lockdown strategy we chose to follow has been very successful.

“Visits to gyms across our estate are now (at the time of the interview, three weeks after reopening) at 70 per cent of the number of visits compared to last year, which is a great start.

“What’s more, while I can’t give out the exact numbers, I can say that we’re currently at an all-time high in terms of our membership base – so we didn’t just get back the 7 per cent we lost during the three months, we’ve already managed to bring in more than that.”

GOVERNMENT HELP
While EVO’s individual strategy for dealing with the lockdown has been at the heart of its successful reopening, Hellevang also credits the central government’s handling of the crisis. 

Norway was among the first countries to lock down businesses and it did so long before the cases of confirmed coronavirus infections had reached alarming levels. In fact, the first confirmed death was reported on the same day that lockdown was initiated. 

At the time of going to press (February 2021), the entire total deaths attributed to COVID-19 in the country during the pandemic stood at less than 600. This signals that the ‘curve’ was quickly brought under control during the two waves, preventing even longer lockdowns.

As well as commending the government for saving lives, Hellevang praises the economic measures it introduced to help businesses. “If you were among the businesses forced to close, you got a good subsidy from the government for the entire period that you had to keep your doors shut,” Hellevang says.

“The compensation was calculated and based on the revenue shortfall you experienced. So, if you had a 90 per cent shortfall, you would get 90 per cent of your unavoidable fixed costs paid by the government. ‘Unavoidable fixed costs’ is obviously not a recognised financial term, so there were some initial debates over what actually would be covered, but in the end, it turned out to be a very good solution and it was put in place very quickly.

“There’s no doubt that this government intervention saved the businesses of fitness operators in Norway. So I think that was a very generous solution that they came up with.”

UNUSUAL WORKFORCE
Business is now returning to normal and EVO has brought back all its employees. And speaking of workforces, EVO’s is a rather unusual one. 

For a chain that has a presence in five countries, the company has a remarkably small HQ team – just 13 employees. Adding to that, it has no frontline fitness staff working the gym floor. 

The EVO clubs are open from 5.00am to midnight each day and are, in theory, unmanned. Rather than have regular staff and gym managers, EVO manages the gyms using its own, bespoke IT system called Credlock. The system enables automated membership contract and payment management, as well as the control of club access. 

Each gym will always have people wearing EVO uniforms, however. Across its Norwegian portfolio alone, 180 personal trainers work the gym floor every day. “When you go into an EVO club, you wouldn’t know that the people there aren’t employees,” Hellevang says. “The way we’ve set it up is that we have a consultancy agreement with the PTs. They pay a small amount of rent every month for getting access to the clubs and our members. In return, we set their price-level based on their education and experience.

“While they can’t set their own price, they do get to keep 100 per cent of what they make.

“They also do a lot of things for us – including inductions. For example, we offer a 14-day free trial, which includes one free PT session, so they give that for free. While they don’t clean the clubs – that is done by a professional company – they do help us maintain the gym floor and equipment. 

“We also schedule their presence to ensure we have people in the clubs between 9am and 9pm every day. We’re very flexible with the PTs too – they are free to work at other gyms if they want. 

“It’s proven to be an extremely attractive model, partly because the PTs get to keep everything, instead of giving away 30-40 per cent of their turnover.”

The flexible, non-staff model is another element which helped EVO get its clubs ready to open, once the government signalled the green light for gyms to emerge from lockdown.

“We opened every club at the same time and with full opening hours,” Hellevang says. “On the day we were allowed to reopen, we threw open our doors at 5.00am until midnight – and have done since, every day of the week.”

“We’ve adopted all the new COVID-19 measures, such as routines for cleaning and disinfection. The social distancing rules are that, for intensive training (such as cardio work and indoor cycling), members need to keep two metres apart. For less intensive workouts – such as strength training – they need to keep a distance of one metre. The PTs are helping with the implementation of it all. They had been out of business for three months so they were very eager to return!”. 

INTERNATIONAL GROWTH
As well as its 44 locations in Norway, EVO Fitness has 26 franchised gyms in Finland. The Finnish sites are owned by health club operator Fressi, which also owns and operates 16 full-service clubs in the country.

The Finnish EVO gyms, while operating exactly like their counterparts in Norway – including the centralised Credlock system – are branded as a Fressi sub-brand, called Fressi 24.

For the rest of Europe, EVO has signed a licensing agreement with Holmes Place, which has resulted in the EVO brand being rolled out across German-speaking countries.

There are currently 11 EVO sites in Switzerland, six in Germany and two in Austria and the agreement has allowed Holmes Place to build on the existing EVO model with its “own vision and philosophy” for the clubs.

“It’s not a clear-cut franchise arrangement with Holmes Place, it’s more of a cooperation,” says Hellevang. “They have developed the EVO concept to be slightly different from what we have in Norway. It’s still called EVO, but they have a slightly different logo and slightly different colour schedule. So unlike with Fressi 24, Holmes Place isn’t positioning its EVO offer as a sub-brand, but rather as a standalone business.”

FUTURE PLANS
EVO is looking to expand its foothold in the Norwegian health and fitness market with a strong development plan. There are still significant growth opportunities, as Norway’s market penetration for gyms currently hovers well below the 20 per cent mark. 

“We opened four clubs in 2020 and have five signed for opening in 2021,” Hellevang reveals. 

“We intend to follow our new opening schedule – agreed before lockdown. 
“While the pandemic has been disruptive, we see this period also as an opportunity, as the retail sector is struggling, so we will be able to gain access to better locations than we had a year ago. 

“We still have capital to expand – partly thanks to the government’s COVID-19 support, as it meant we didn’t lose too much cash. 

“The pre-sales for our 2020 openings were pretty good too, so the market is still there. People still want to train at gyms.

“We’re planning five to six openings a year, but we could easily double that if we are able to find the locations. In the longer term, I think we could easily have 70 EVO clubs in Norway.”

EVO FITNESS

Founded: 2009

Turnover: NOK140m

CEO: Morten Hellevang

Ownership: Wholly-owned by private company Fitness Group Nordic AS (FGN). FGN’s largest shareholder (with 32%) is Torkap AS, the family office of the Bertel O Steen group, a major industrial company in Norway. The rest is held by private owners and the current management (10%)

Number of clubs: 
Norway = 44 (five more to open during 2021)
Finland = 26 
Switzerland = 11 
Germany = 6
Austria = 2

EVO Fitness has 44 clubs in Norway, with plans to expand to up to 70
EVO Fitness has big growth plans for its European estate
EVO Fitness has big growth plans for its European estate
The Finnish sites are owned by a company called Fressi and trade under the Fressi 24 brand
The Finnish sites are owned by a company called Fressi and trade under the Fressi 24 brand
Businesses in Norway were well-compensated by the government for losses incurred due to closures
Businesses in Norway were well-compensated by the government for losses incurred due to closures
EVO has a partnership with Holmes Place, which owns 18 EVO clubs across Switzerland, Germany and Austria
EVO has a partnership with Holmes Place, which owns 18 EVO clubs across Switzerland, Germany and Austria
https://www.leisureopportunities.co.uk/images/2021/100365_536833.jpg
Norwegian gym chain EVO fitness is performing well, despite the pandemic. Its CEO, Morten Hellevang, shares the company’s strategies...
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features

Interview: Morten Hellevang

Norwegian gym chain EVO Fitness has created a strong set of operating policies for dealing with the business challenges of the pandemic, as its CEO explains to Tom Walker

Published in Health Club Management 2021 issue 2
EVO Fitness CEO, Morten Hellevang
EVO Fitness CEO, Morten Hellevang
While the pandemic has been disruptive, we see this period also as an opportunity

We were given just two hours to close down our businesses,” says Morten Hellevang, describing the day in 2020, when the Norwegian government placed the country in COVID-19 lockdown.

“A very long three months later, the fitness sector was the last industry to reopen,” he says, suggesting the lockdown provided gym operators with plenty of time to plan their return to business. 

What Hellevang and his team did during lockdown has seen the company weather the COVID-19 storm well across all its trading markets – Norway, Finland, Switzerland, Austria and Germany.

“When we were forced to close, we quickly concluded that – as a nationwide chain – we wouldn’t get a lot of sympathy from our members,” says Hellevang. “Therefore, we decided that during the period of closure we wouldn’t charge customers anything – that we would carry the loss entirely. 

COVID-19 LOSSES
“It was a decision that ended up costing us NOK40m (US$4.3m, €3.8m, £3.4m) in revenue during the three months we were closed – a significant loss for us. 

“However, it was a strategic decision. We identified that the most important thing for us was to have as many members as possible when we were allowed to reopen.

“Instead of trying to keep a little money coming in from members – or charging and converting them to some form of digital memberships – we decided to take the loss and keep members happy.”

The decision to not charge for memberships was accompanied by a drive to keep the membership – and the wider Norwegian public – engaged with the brand throughout lockdown. “We furloughed most of our staff, but kept on some of the roles we considered central,” Hellevang says, adding that among those roles were marketing ones. “We felt marketing would be a key factor in the process to plan for reopening.”

“Our strategy was to be very active across social media, pushing the message that ‘we’re still here’. 

“That was supported by offering everyone, not just members, free exercise programmes. 

“We also used the lockdown to refurbish and expand a couple of our clubs – so we promoted the gym development work we were doing on social media.”

While activating itself on social media to keep the brand in people’s minds, one thing EVO didn’t do was spend a lot of time communicating directly with members. This too, was a strategic decision. 

“We were very active on Facebook, Instagram and other platforms – but only sent our members one direct email or text message during the entire period,” Hellevang reveals. “And that was to tell them, at the beginning of lockdown, that we were freezing memberships.

“The reason for this was that every time we sent an email out, we would lose a couple of hundred members. I think it’s because when you send out a direct message, you’re reminding people of something they are paying for – and something they might want to cut. 

“When you speak to customer service or marketing people they normally say it’s important to communicate with your members directly – especially during a period like we’ve just had,” Hellevang explains.

“Well, we decided not to do that, because there is a real cost for doing it – and that cost should not be underestimated.”

SUCCESSFUL APPROACH
Keeping its marketing department operational throughout lockdown also helped EVO map out its plans and be ‘reopen-ready’. 

“At the point of reopening, we had all our ‘return to gym’ campaigns ready to go,” Hellevang says. “Advertising space was booked and social media was all set – all we had to do was push the button and everything began rolling.”

Hellevang says this allowed the company to bounce back quicker than many other operators. 

“Thanks to our approach, we had a couple of tremendously good weeks – in terms of sales – after reopening,” he says.

“Overall, across the Norwegian fitness market, the average loss of members due to lockdown has been around 13 per cent. For us, the figure is roughly 7 per cent. 

“So while we too have lost members – according to the figures we have – we’ve lost less than most of the other operators. So I think the lockdown strategy we chose to follow has been very successful.

“Visits to gyms across our estate are now (at the time of the interview, three weeks after reopening) at 70 per cent of the number of visits compared to last year, which is a great start.

“What’s more, while I can’t give out the exact numbers, I can say that we’re currently at an all-time high in terms of our membership base – so we didn’t just get back the 7 per cent we lost during the three months, we’ve already managed to bring in more than that.”

GOVERNMENT HELP
While EVO’s individual strategy for dealing with the lockdown has been at the heart of its successful reopening, Hellevang also credits the central government’s handling of the crisis. 

Norway was among the first countries to lock down businesses and it did so long before the cases of confirmed coronavirus infections had reached alarming levels. In fact, the first confirmed death was reported on the same day that lockdown was initiated. 

At the time of going to press (February 2021), the entire total deaths attributed to COVID-19 in the country during the pandemic stood at less than 600. This signals that the ‘curve’ was quickly brought under control during the two waves, preventing even longer lockdowns.

As well as commending the government for saving lives, Hellevang praises the economic measures it introduced to help businesses. “If you were among the businesses forced to close, you got a good subsidy from the government for the entire period that you had to keep your doors shut,” Hellevang says.

“The compensation was calculated and based on the revenue shortfall you experienced. So, if you had a 90 per cent shortfall, you would get 90 per cent of your unavoidable fixed costs paid by the government. ‘Unavoidable fixed costs’ is obviously not a recognised financial term, so there were some initial debates over what actually would be covered, but in the end, it turned out to be a very good solution and it was put in place very quickly.

“There’s no doubt that this government intervention saved the businesses of fitness operators in Norway. So I think that was a very generous solution that they came up with.”

UNUSUAL WORKFORCE
Business is now returning to normal and EVO has brought back all its employees. And speaking of workforces, EVO’s is a rather unusual one. 

For a chain that has a presence in five countries, the company has a remarkably small HQ team – just 13 employees. Adding to that, it has no frontline fitness staff working the gym floor. 

The EVO clubs are open from 5.00am to midnight each day and are, in theory, unmanned. Rather than have regular staff and gym managers, EVO manages the gyms using its own, bespoke IT system called Credlock. The system enables automated membership contract and payment management, as well as the control of club access. 

Each gym will always have people wearing EVO uniforms, however. Across its Norwegian portfolio alone, 180 personal trainers work the gym floor every day. “When you go into an EVO club, you wouldn’t know that the people there aren’t employees,” Hellevang says. “The way we’ve set it up is that we have a consultancy agreement with the PTs. They pay a small amount of rent every month for getting access to the clubs and our members. In return, we set their price-level based on their education and experience.

“While they can’t set their own price, they do get to keep 100 per cent of what they make.

“They also do a lot of things for us – including inductions. For example, we offer a 14-day free trial, which includes one free PT session, so they give that for free. While they don’t clean the clubs – that is done by a professional company – they do help us maintain the gym floor and equipment. 

“We also schedule their presence to ensure we have people in the clubs between 9am and 9pm every day. We’re very flexible with the PTs too – they are free to work at other gyms if they want. 

“It’s proven to be an extremely attractive model, partly because the PTs get to keep everything, instead of giving away 30-40 per cent of their turnover.”

The flexible, non-staff model is another element which helped EVO get its clubs ready to open, once the government signalled the green light for gyms to emerge from lockdown.

“We opened every club at the same time and with full opening hours,” Hellevang says. “On the day we were allowed to reopen, we threw open our doors at 5.00am until midnight – and have done since, every day of the week.”

“We’ve adopted all the new COVID-19 measures, such as routines for cleaning and disinfection. The social distancing rules are that, for intensive training (such as cardio work and indoor cycling), members need to keep two metres apart. For less intensive workouts – such as strength training – they need to keep a distance of one metre. The PTs are helping with the implementation of it all. They had been out of business for three months so they were very eager to return!”. 

INTERNATIONAL GROWTH
As well as its 44 locations in Norway, EVO Fitness has 26 franchised gyms in Finland. The Finnish sites are owned by health club operator Fressi, which also owns and operates 16 full-service clubs in the country.

The Finnish EVO gyms, while operating exactly like their counterparts in Norway – including the centralised Credlock system – are branded as a Fressi sub-brand, called Fressi 24.

For the rest of Europe, EVO has signed a licensing agreement with Holmes Place, which has resulted in the EVO brand being rolled out across German-speaking countries.

There are currently 11 EVO sites in Switzerland, six in Germany and two in Austria and the agreement has allowed Holmes Place to build on the existing EVO model with its “own vision and philosophy” for the clubs.

“It’s not a clear-cut franchise arrangement with Holmes Place, it’s more of a cooperation,” says Hellevang. “They have developed the EVO concept to be slightly different from what we have in Norway. It’s still called EVO, but they have a slightly different logo and slightly different colour schedule. So unlike with Fressi 24, Holmes Place isn’t positioning its EVO offer as a sub-brand, but rather as a standalone business.”

FUTURE PLANS
EVO is looking to expand its foothold in the Norwegian health and fitness market with a strong development plan. There are still significant growth opportunities, as Norway’s market penetration for gyms currently hovers well below the 20 per cent mark. 

“We opened four clubs in 2020 and have five signed for opening in 2021,” Hellevang reveals. 

“We intend to follow our new opening schedule – agreed before lockdown. 
“While the pandemic has been disruptive, we see this period also as an opportunity, as the retail sector is struggling, so we will be able to gain access to better locations than we had a year ago. 

“We still have capital to expand – partly thanks to the government’s COVID-19 support, as it meant we didn’t lose too much cash. 

“The pre-sales for our 2020 openings were pretty good too, so the market is still there. People still want to train at gyms.

“We’re planning five to six openings a year, but we could easily double that if we are able to find the locations. In the longer term, I think we could easily have 70 EVO clubs in Norway.”

EVO FITNESS

Founded: 2009

Turnover: NOK140m

CEO: Morten Hellevang

Ownership: Wholly-owned by private company Fitness Group Nordic AS (FGN). FGN’s largest shareholder (with 32%) is Torkap AS, the family office of the Bertel O Steen group, a major industrial company in Norway. The rest is held by private owners and the current management (10%)

Number of clubs: 
Norway = 44 (five more to open during 2021)
Finland = 26 
Switzerland = 11 
Germany = 6
Austria = 2

EVO Fitness has 44 clubs in Norway, with plans to expand to up to 70
EVO Fitness has big growth plans for its European estate
EVO Fitness has big growth plans for its European estate
The Finnish sites are owned by a company called Fressi and trade under the Fressi 24 brand
The Finnish sites are owned by a company called Fressi and trade under the Fressi 24 brand
Businesses in Norway were well-compensated by the government for losses incurred due to closures
Businesses in Norway were well-compensated by the government for losses incurred due to closures
EVO has a partnership with Holmes Place, which owns 18 EVO clubs across Switzerland, Germany and Austria
EVO has a partnership with Holmes Place, which owns 18 EVO clubs across Switzerland, Germany and Austria
https://www.leisureopportunities.co.uk/images/2021/100365_536833.jpg
Norwegian gym chain EVO fitness is performing well, despite the pandemic. Its CEO, Morten Hellevang, shares the company’s strategies...
Latest News
Fully vaccinated people in the US no longer need to wear a face mask whether ...
Latest News
Anytime Fitness UK has revealed that April was its busiest month for new memberships since ...
Latest News
HCM understands that Fitness International, which operates more than 700 health clubs under the LA ...
Latest News
A court has given Virgin Active the green light to erase the rent arrears it ...
Latest News
The Swimming Teachers' Association (STA) has partnered with a psychologist to provide new mindfulness and ...
Latest News
A report commissioned by Parkrun has estimated that allowing mass-participation outdoor events carries an "exceptionally ...
Latest News
Jan Spaticchia, founder and chair of énergie Fitness has died aged 51 following a short ...
Latest News
A new pioneering approach looks to help cancer patients prepare for and respond to treatment ...
Latest News
Peloton is recalling all of its Tread and Tread+ machines in the US, after striking ...
Latest News
Health club operator Bannatyne is repositioning itself as a wellness provider, as it looks to ...
Latest News
Health clubs and leisure centres in Northern Ireland reopened their doors on Friday 30 April, ...
Opinion
promotion
The UK’s first dedicated leisure development framework has completed its first four-year term with £144m committed investment in public leisure projects.
Opinion: UK’s first leisure framework celebrates £144m investment in public leisure
Featured supplier news
Featured supplier news: Connect for success with Precor
Members are returning post-lockdown expecting a fully integrated service, meaning digital connectivity has never been more important.
Featured supplier news
Featured supplier news: Marc Jones joins Fitronics in new head of commercial role
Marc Jones has joined Fitronics, the company behind The Retention People (TRP) and CoursePro, in a newly created role of Head of Commercial.
Company profiles
Company profile: Incorpore Limited
Incorpore Ltd is a leading fitness and wellness company which has been successfully delivering solutions ...
Company profiles
Company profile: Parkwood Leisure
Parkwood Leisure is a family-owned leisure management company working with local authority partners across England ...
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Fitness equipment
Octane Fitness: Fitness equipment
Architects/designers
Zynk Design Consultants: Architects/designers
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Salt therapy products
Himalayan Source: Salt therapy products
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Spa software
SpaBooker: Spa software
Exercise equipment
Matrix Fitness: Exercise equipment
Wearable technology solutions
MyZone: Wearable technology solutions
Property & Tenders
Pendine Sands, Carmarthenshire
Carmarthenshire County Council
Property & Tenders
Diary dates
07-09 Jun 2021
Virtual summit,
Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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