Lift the Group Head out of the way, it can be pulled to the side if required, now remove the plastic collar from the machine (not pictured). At this stage it's a good idea to clean any old coffee grinds from group head and from the aluminum rim underneath the removed insert.
Now insert the new group collar insert into the housing.
Orientation of the insert is not a concern here, just make sure it is bedded into the housing correctly (small lugs are resting in their respective holes).
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