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Note 3 Segment Information
The accounting policies of the reportable segments are the same as those set out in Note 1 to the Consolidated Financial Statements. Segment sales include intersegment sales valued at arm’s length prices. The Group evaluates the performance of its operating segments and allocates resources to them based on their operating performance, which is equivalent to the segment result.
Stora Enso changed its organisational structure in 2003 to reflect its strategic principle of being operated and managed as one industrial group, the new structure being streamlined around the core product areas of Paper, Packaging Boards and Forest Products. For management purposes, Stora Enso’s business segments are organised worldwide by Product Area into operating divisions, these being the basis on which the Group reports its primary segment information.
• The Paper product area comprises Publication Paper, Fine Paper, and Merchants. The former Newsprint and Magazine Paper divisions were merged to form the Publication Paper segment, whilst Speciality Papers, which was part of Packaging Boards, formed a new business unit within Fine Paper.
• The Packaging Boards product area remained largely unchanged and comprises Consumer Boards, Corru-gated Packaging, Industrial Papers and Cores and
Coreboards.
• Wood Products (formerly Timber), the Pulp Competence Centre and Wood Supply Europe (formerly Forest) were brought together as the new Forest Products.
Market Services, consisting of the Sales Network and Transport and Distribution, along with Energy and Head Office functions, comprise segment Other.
The activities of the reportable segments are:
Paper
• Publication Paper develops and manufactures both magazine paper and newsprint. It supplies uncoated and coated magazine paper grades to printers and publishers for use in magazines, catalogues, brochures and other printed advertising products. As for newsprint, it supplies standard and speciality grades to printers and publishers to be used in newspapers, supplements, advertising, directories and paperback books.
• Fine Paper develops, manufactures and supplies coated and uncoated fine paper grades for publishers and paper merchants. Coated fine paper is used for advertising material, brochures, high quality books and magazines, whereas uncoated fine paper products are copy and offset paper, envelopes, writing paper and continuous stationery paper.
• Merchants distribute paper to printers, merchants, offices and other agencies, acting as the link in the distribution of the Group’s fine paper products to the graphic industry.
Packaging Boards
• Packaging operations are split into business units for consumer board, corrugated packaging, industrial paper and cores and coreboard, all of which the Group develops, manufactures and supplies to industrial customers, the food industry in particular.
Forest Products
• Wood Products develops, manufactures and supplies sawn wood products used in the joinery, furniture and construction industry, including prefabricated houses; it also has an increasing amount of value added capacity for further processing of the basic sawn timber.
• Wood Supply Europe not only manages Stora Enso’s timberlands, but it also procures and supplies timber to Group mills.
Information on Stora Enso’s reportable segments as at and for the years ended 31 December 2002, 2003 and 2004 is shown in the following tables; comparatives have been restated for the above organisational changes and the restatement of prior year results in respect of the Finnish Statutory Pension Scheme.
Sales by Segment
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | |||||||||
| EUR million | External | Internal | Total | External | Internal | Total | External | Internal | Total | ||
| Publication Paper | 4 599.2 | 116.4 | 4 715.6 | 4 179.3 | 116.4 | 4 295.7 | 4 222.3 | 121.0 | 4 343.3 | ||
| Fine Paper | 3 140.0 | 287.4 | 3 427.4 | 2 923.2 | 274.5 | 3 197.7 | 2 906.5 | 266.6 | 3 173.1 | ||
| Merchants | 718.8 | 1.8 | 720.6 | 625.8 | 1.8 | 627.6 | 628.3 | 9.6 | 637.9 | ||
| Packaging Boards | 2 571.9 | 148.3 | 2 720.2 | 2 562.5 | 199.1 | 2 761.6 | 2 552.5 | 219.0 | 2 771.5 | ||
| Wood Products | 1 139.4 | 95.8 | 1 235.2 | 1 294.6 | 105.4 | 1 400.0 | 1 446.8 | 120.0 | 1 566.8 | ||
| Wood Supply Europe | 444.0 | 1 514.7 | 1 958.7 | 492.6 | 1 581.7 | 2 074.3 | 549.7 | 1 931.8 | 2 481.5 | ||
| Other | 169.3 | 663.9 | 833.2 | 94.3 | 469.9 | 564.2 | 89.7 | 453.4 | 543.1 | ||
| Elimination of internal sales | - | -2 828.3 | -2 828.3 | - | -2 748.8 | -2 748.8 | - | -3 121.4 | -3 121.4 | ||
| Group Total | 12 782.6 | - | 12 782.6 | 12 172.3 | - | 12 172.3 | 12 395.8 | - | 12 395.8 | ||
Segment Share of Operating Profit and Associated Companies
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Operating Profit | Share of Results in Associated Companies |
Investment in Associated Companies |
||||||||
| Publication Paper | -762.7 | 47.2 | 144.5 | - | -16.3 | 5.1 | 67.5 | 57.2 | 61.5 | ||
| Fine Paper | 67.9 | 100.1 | 104.0 | -1.0 | -0.2 | 0.2 | - | 3.3 | 0.2 | ||
| Merchants | -24.7 | -8.9 | 9.9 | - | - | - | - | - | - | ||
| Packaging Boards | 332.3 | 280.5 | 339.7 | 5.3 | - | -0.5 | - | 4.2 | 4.3 | ||
| Wood Products | 30.1 | 6.5 | 29.8 | 3.1 | -0.9 | 1.3 | 13.4 | 7.6 | 8.1 | ||
| Wood Supply Europe | 120.5 | 116.5 | 158.6 | -5.5 | 13.7 | 22.5 | 29.2 | 83.0 | 249.6 | ||
| Other | 58.9 | -70.5 | -80.4 | 12.7 | -19.3 | 10.3 | 101.6 | 163.7 | 244.4 | ||
| Group Total | -177.7 | 471.4 | 706.1 | 14.6 | -23.0 | 38.9 | 211.7 | 319.0 | 568.1 | ||
Fixed Assets, Capital Expenditure and Depreciation & Impairment by Segment
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Fixed Assets | Capital Expenditure | Depreciation/Impairment | ||||||||
| Publication Paper | 3 954.5 | 3 898.7 | 3 818.2 | 482.2 | 591.6 | 486.3 | 1 522.6 | 447.6 | 436.1 | ||
| Fine Paper | 4 005.9 | 3 569.7 | 3 366.7 | 134.6 | 219.1 | 198.6 | 532.8 | 340.5 | 356.1 | ||
| Merchants | 59.6 | 66.5 | 76.3 | - | 25.6 | 3.2 | 11.5 | 8.1 | 8.5 | ||
| Packaging Boards | 2 265.8 | 2 230.8 | 2 323.9 | 140.5 | 170.9 | 167.3 | 235.5 | 239.4 | 240.4 | ||
| Wood Products | 376.7 | 685.4 | 674.8 | 53.5 | 141.9 | 68.1 | 54.6 | 74.4 | 78.2 | ||
| Wood Supply Europe | 796.5 | 158.5 | 99.9 | 24.9 | 20.2 | 21.9 | 39.0 | 16.2 | 12.9 | ||
| Other | 481.8 | 337.9 | 291.0 | 41.9 | 78.9 | 29.7 | 45.9 | 74.2 | 39.8 | ||
| Group Total | 11 940.8 | 10 947.5 | 10 650.8 | 877.6 | 1 248.2 | 975.1 | 2 441.9 | 1 200.4 | 1 172.0 | ||
Goodwill by Segment (included in Fixed Assets above)
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Goodwill | Acquisitions | Amortisation/Impairment | ||||||||
| Publication Paper | 176.4 | 153.0 | 130.0 | - | - | - | 851.9 | 34.4 | 23.2 | ||
| Fine Paper | 678.9 | 531.3 | 458.4 | - | - | - | 177.7 | 43.1 | 38.7 | ||
| Merchants | 16.0 | 9.1 | 13.8 | - | - | 6.8 | 5.2 | 2.2 | 2.2 | ||
| Packaging Boards | 44.3 | 36.0 | 30.7 | 25.1 | 2.5 | 0.1 | 12.9 | 11.9 | 4.9 | ||
| Wood Products | 123.7 | 173.2 | 155.0 | - | 71.1 | - | 14.5 | 20.0 | 21.2 | ||
| Other | 16.2 | - | - | 1.6 | 0.2 | - | 5.5 | 4.5 | - | ||
| Group Total | 1 055.5 | 902.6 | 787.9 | 26.7 | 73.8 | 6.9 | 1 067.7 | 116.1 | 90.2 | ||
Assets and Liabilities by Segment
| As at 31 December | |||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | ||
| EUR million | Assets | Liabilities | |||||
| Publication Paper | 5 059.3 | 5 018.6 | 5 082.9 | 955.6 | 886.5 | 817.2 | |
| Fine Paper | 4 869.9 | 4 421.9 | 4 347.2 | 566.1 | 547.0 | 509.9 | |
| Merchants | 256.0 | 237.9 | 279.0 | 85.4 | 78.5 | 86.3 | |
| Packaging Boards | 3 011.8 | 2 981.0 | 3 175.3 | 424.3 | 450.9 | 422.0 | |
| Wood Products | 721.7 | 1 018.9 | 1 038.0 | 187.9 | 208.1 | 195.4 | |
| Wood Supply Europe | 1 131.4 | 2 030.4 | 562.0 | 225.2 | 231.7 | 385.5 | |
| Other | 3 164.1 | 2 233.4 | 1 927.5 | 7 704.5 | 7 526.2 | 5 808.4 | |
| Total | 18 214.2 | 17 942.1 | 16 411.9 | 10 149.0 | 9 928.9 | 8 224.7 | |
Operating Capital by Segment
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Reconciliation to Total Assets
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Operating capital ("O" items) is designated thus on the Balance Sheet and represents the sum of fixed and biological assets, unlisted shares, other non-current assets, inventories, short-term operative receivables and liabilities, provisions and other long-term operative liabilities. |
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Average Personnel
| Year Ended 31 December | Year Ended 31 December | |||||||
| Segment | 2002 | 2003 | 2004 | Location | 2002 | 2003 | 2004 | |
| Publication Paper | 13 241 | 12 903 | 12 317 | Baltic States | 382 | 1 561 | 1 630 | |
| Fine Paper | 9 872 | 9 521 | 8 921 | Finland | 14 676 | 14 479 | 13 820 | |
| Merchants | 1 411 | 1 254 | 1 296 | Sweden | 9 187 | 9 068 | 8 848 | |
| Packaging Boards | 9 949 | 10 068 | 10 113 | Germany | 4 761 | 4 785 | 4 734 | |
| Wood Products | 3 745 | 4 626 | 4 856 | France | 1 333 | 1 312 | 1 260 | |
| Wood Supply Europe | 2 265 | 2 599 | 3 157 | Russia | 581 | 741 | 1 710 | |
| Other | 3 370 | 3 293 | 3 119 | Other Europe | 5 378 | 5 267 | 5 349 | |
| Total | 43 853 | 44 264 | 43 779 | Europe | 36 298 | 37 213 | 37 351 | |
| Canada | 850 | 849 | 775 | |||||
| China | 816 | 811 | 849 | |||||
| USA | 5 731 | 5 182 | 4 644 | |||||
| Other | 158 | 209 | 160 | |||||
| Year end personnel | 42 461 | 42 814 | *45 307 | Total | 43 853 | 44 264 | 43 779 | |
* As a result of acquisitions in Poland and Russia in late 2004, which had year end personnel of 1 979 and 2 196 respectively, the number of employees at 31 December 2004 is materially different from the average figure.
External Sales by Destination and Origin
| Year Ended 31 December | |||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | ||
| EUR million | Sales by Destination | Sales by Origin | |||||
| Austria | 195.4 | 222.0 | 238.6 | 266.9 | 324.8 | 390.4 | |
| Belgium | 301.3 | 267.2 | 258.4 | 244.3 | 182.7 | 263.4 | |
| Baltic States | 28.3 | 89.3 | 135.5 | 163.6 | 280.1 | 310.7 | |
| Czech Republic | 121.7 | 118.9 | 111.1 | 129.3 | 136.5 | 143.8 | |
| Denmark | 297.9 | 276.1 | 262.2 | 79.0 | 68.6 | 66.8 | |
| Finland | 780.6 | 786.9 | 808.5 | 4 205.5 | 4 048.9 | 4 085.5 | |
| France | 965.5 | 862.7 | 835.2 | 432.6 | 378.6 | 347.1 | |
| Germany | 1 673.6 | 1 616.1 | 1 624.6 | 1 505.1 | 1 475.6 | 1 500.9 | |
| Italy | 391.5 | 380.7 | 369.1 | 0.1 | 0.1 | 0.1 | |
| Netherlands | 488.4 | 491.9 | 508.8 | 209.2 | 187.7 | 211.2 | |
| Portugal | 60.9 | 64.9 | 83.2 | 128.0 | 124.9 | 131.1 | |
| Spain | 463.4 | 499.4 | 488.8 | 114.4 | 118.0 | 114.0 | |
| Sweden | 1 034.2 | 994.4 | 1 040.5 | 2 870.1 | 2 814.1 | 2 820.3 | |
| UK | 1 053.4 | 979.3 | 963.8 | 59.1 | 23.4 | 24.4 | |
| Russia | 112.8 | 130.7 | 151.8 | 45.3 | 59.8 | 118.3 | |
| Other Europe | 916.0 | 762.8 | 777.4 | 78.7 | 71.8 | 66.9 | |
| Total Europe | 8 884.9 | 8 543.3 | 8 657.5 | 10 531.2 | 10 295.6 | 10 594.9 | |
| Africa | 118.2 | 146.8 | 149.9 | - | - | - | |
| Australia/New Zealand | 115.6 | 122.9 | 124.3 | 39.7 | 20.2 | 5.6 | |
| Canada | 160.0 | 143.7 | 127.5 | 286.4 | 285.6 | 275.5 | |
| China (incl. Hong Kong) | 257.3 | 267.0 | 281.4 | 120.1 | 107.4 | 107.8 | |
| Japan | 340.6 | 323.2 | 346.2 | 1.1 | 0.5 | - | |
| Other Far East & South East Asia | 272.6 | 310.6 | 382.5 | 14.2 | 11.5 | 12.6 | |
| Middle East | 176.1 | 185.5 | 201.4 | 0.1 | - | 0.2 | |
| USA | 2 267.3 | 1 918.3 | 1 904.9 | 1 789.7 | 1 451.5 | 1 398.7 | |
| Latin America | 128.4 | 126.0 | 162.9 | 0.1 | - | - | |
| Others | 61.6 | 85.0 | 57.3 | - | - | 0.5 | |
| Total | 12 782.6 | 12 172.3 | 12 395.8 | 12 782.6 | 12 172.3 | 12 395.8 | |
Total Assets, Capital Employed and Equity by Location
| As at 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Total Assets | Capital Employed | Shareholder's Equity | ||||||||
| Austria | 233.7 | 238.5 | 235.1 | 162.3 | 175.6 | 165.1 | 61.7 | 134.2 | 141.1 | ||
| Baltic States | 41.3 | 302.0 | 296.4 | 34.0 | 255.5 | 275.4 | 4.6 | 154.7 | 150.2 | ||
| Belgium | 525.8 | 650.0 | 625.1 | 325.7 | 584.6 | 570.2 | 235.1 | 255.0 | 258.8 | ||
| Czech Republic | 132.4 | 117.8 | 121.7 | 118.1 | 105.8 | 110.6 | 114.8 | 114.4 | 128.0 | ||
| Denmark | 40.9 | 89.5 | 53.1 | 28.5 | 46.8 | 44.5 | 125.0 | 126.7 | 200.8 | ||
| Finland | 5 625.1 | 5 219.4 | 5 056.9 | 3 682.9 | 3 384.8 | 3 356.9 | 3 418.9 | 2 931.6 | 2 106.8 | ||
| France | 367.7 | 364.5 | 389.0 | 235.0 | 245.6 | 275.7 | 230.6 | 185.3 | 138.1 | ||
| Germany | 1 754.4 | 1 750.7 | 1 778.6 | 783.8 | 893.4 | 878.2 | 622.8 | 642.5 | 648.6 | ||
| Netherlands | 144.0 | 121.1 | 181.7 | 91.0 | 87.6 | 130.9 | 387.4 | 272.5 | 195.7 | ||
| Portugal | 242.6 | 227.5 | 216.8 | 225.5 | 214.8 | 202.0 | 307.4 | 320.7 | 243.8 | ||
| Spain | 106.9 | 127.1 | 121.1 | 70.9 | 91.1 | 84.2 | 67.7 | 70.4 | 73.7 | ||
| Sweden | 3 727.7 | 4 328.9 | 3 270.0 | 1 886.7 | 2 582.4 | 1 571.1 | 813.5 | 1 396.3 | 1 865.7 | ||
| Russia | 36.6 | 96.6 | 127.8 | 32.8 | 82.0 | 119.3 | 8.2 | 25.7 | 33.5 | ||
| Other Europe | 180.9 | 83.4 | 326.1 | 52.7 | 42.0 | 174.4 | 57.8 | 61.4 | 209.0 | ||
| Total Europe | 13 160.0 | 13 717.0 | 12 799.4 | 7 729.9 | 8 792.0 | 7 958.5 | 6 455.5 | 6 691.4 | 6 393.8 | ||
| Canada | 561.0 | 488.1 | 484.2 | 491.1 | 491.7 | 475.1 | 559.0 | 472.2 | 445.6 | ||
| China (incl. Hong Kong) | 224.8 | 180.8 | 174.4 | 203.7 | 157.3 | 147.8 | 28.0 | 28.1 | 39.2 | ||
| USA | 4 166.7 | 3 385.1 | 2 725.2 | 2 654.0 | 2 143.6 | 2 079.2 | 962.6 | 665.4 | 984.5 | ||
| Other | 100.7 | 171.1 | 228.7 | 41.7 | 28.6 | 9.9 | 29.7 | 95.8 | 188.0 | ||
| Total | 18 214.2 | 17 942.1 | 16 411.9 | 11 120.3 | 11 613.2 | 10 670.5 | 8 034.8 | 7 952.9 | 8 051.1 | ||
Total capital employed represents operating capital less net tax liabilities. The increase in "Other Europe" in 2004 was as a result of the year end acquisition of the Intercell Group in Poland.
Fixed Assets, Capital Expenditure and Depreciation & Impairment by Location
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Fixed Assets | Capital Expenditure | Depreciation/Impairment | ||||||||
| Austria | 144.6 | 147.7 | 139.9 | 22.1 | 18.7 | 13.3 | 17.8 | 18.2 | 16.6 | ||
| Baltic States | 14.5 | 207.2 | 208.2 | 0.9 | 39.7 | 28.9 | 2.4 | 22.0 | 24.8 | ||
| Belgium | 377.7 | 557.1 | 506.0 | 290.6 | 209.7 | -11.7 | (1) | 27.1 | 29.5 | 39.8 | |
| Czech Republic | 108.6 | 97.2 | 100.2 | 3.1 | 2.8 | 10.5 | 12.8 | -13.0 | -13.0 | ||
| Finland | 3 164.7 | 3 224.9 | 3 086.3 | 211.7 | 371.5 | 239.3 | 391.6 | 367.0 | 369.2 | ||
| France | 186.6 | 187.8 | 199.6 | 13.9 | 36.3 | 37.7 | 28.8 | 34.9 | 24.0 | ||
| Germany | 1 127.0 | 1 154.6 | 1 177.9 | 55.1 | 126.8 | 187.0 | 138.0 | 155.2 | 163.1 | ||
| Netherlands | 61.0 | 55.7 | 80.6 | 6.4 | 4.3 | 5.2 | 10.5 | 9.7 | 9.9 | ||
| Portugal | 192.9 | 133.3 | 127.3 | 18.5 | 5.8 | 4.5 | 11.7 | 11.9 | 9.9 | ||
| Spain | 50.2 | 73.4 | 69.0 | 3.6 | 2.5 | 2.4 | 4.8 | 5.1 | 6.7 | ||
| Sweden | 2 660.6 | 1 965.0 | 1 959.8 | 141.0 | 197.3 | 283.8 | 208.8 | 220.6 | 207.9 | ||
| Russia | 23.5 | 63.9 | 82.2 | 9.9 | 45.5 | 12.3 | 1.8 | 3.2 | 5.4 | ||
| Other Europe (2) | 125.2 | 56.5 | 195.7 | 1.8 | 28.4 | 3.0 | 4.6 | 35.2 | 36.3 | ||
| Total Europe | 8 237.1 | 7 924.3 | 7 932.7 | 778.6 | 1 089.3 | 816.2 | 860.7 | 899.5 | 900.6 | ||
| Canada | 406.0 | 422.5 | 404.4 | 12.7 | 45.3 | 29.4 | 85.7 | 45.0 | 28.9 | ||
| China (incl. Hong Kong) | 179.5 | 138.1 | 121.5 | 4.7 | 1.3 | 3.7 | 14.8 | 13.1 | 11.1 | ||
| USA | 3 081.3 | 2 449.8 | 2 185.1 | 74.4 | 109.0 | 123.8 | 1 479.5 | 240.4 | 229.9 | ||
| Other | 36.9 | 12.8 | 7.1 | 7.2 | 3.3 | 2.0 | 1.2 | 2.4 | 1.5 | ||
| Total | 11 940.8 | 10 947.5 | 10 650.8 | 877.6 | 1 248.2 | 975.1 | 2 441.9 | 1 200.4 | 1 172.0 | ||
1) An EU subsidy of EUR 23.5 million was received on the Langerbrugge development for the total use of recycled paper.
2) Fixed assets amounting to EUR 147.2 million were acquired in the Intercell Group in Poland at the year end.
Goodwill by Location (included in Fixed Assets above)
| Year Ended 31 December | |||||||||||
| 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | 2002 | 2003 | 2004 | |||
| EUR million | Goodwill | Acquisitions | Amortisation/Impairment | ||||||||
| Austria | 52.4 | 49.3 | 43.0 | - | - | - | 6.3 | 6.4 | 6.3 | ||
| Baltic States | - | 65.2 | 57.8 | - | 71.1 | - | 0.6 | 6.0 | 7.0 | ||
| Belgium | 18.3 | 14.0 | 12.0 | - | - | - | 4.5 | 4.2 | 2.4 | ||
| Czech Republic | 71.3 | 58.7 | 54.2 | - | - | - | 8.1 | 7.7 | 7.9 | ||
| Finland | 12.6 | 5.0 | 4.0 | 0.7 | - | 0.1 | 8.2 | 4.5 | 1.1 | ||
| Germany | 138.1 | 174.0 | 146.0 | 1.6 | 2.1 | - | 18.1 | 21.0 | 27.6 | ||
| Sweden | 74.8 | 15.9 | 13.9 | 22.6 | - | - | 10.2 | 15.1 | 2.1 | ||
| Other Europe | 24.7 | 4.1 | 9.8 | 1.8 | 0.6 | 6.8 | 13.5 | 12.9 | 1.2 | ||
| Total Europe | 392.2 | 386.2 | 340.7 | 26.7 | 73.8 | 6.9 | 69.5 | 77.8 | 55.6 | ||
| China (incl. Hong Kong) | 34.4 | 23.9 | 17.7 | - | - | - | 5.4 | 5.2 | 4.9 | ||
| USA | 628.9 | 492.5 | 429.5 | - | - | - | 992.8 | 33.1 | 29.7 | ||
| Total | 1 055.5 | 902.6 | 787.9 | 26.7 | 73.8 | 6.9 | 1 067.7 | 116.1 | 90.2 | ||
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