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At the beginning of the year, a programme of measures was initiated focusing on cost savings, with the aim of reducing capital tied up.

The negative sales and income trend has, however, continued in 2003. Income for the first half-year amounted to MSEK 118 (64). Net indebtedness had however decreased by the end of the half-year period to MSEK 460 (596).

The Board of DIrectors has today decided to implement a new more comprehensive programme of measures. The aims of the programme's activities and earlier programmes are an improvement in income of MSEK 150 a year, and a reduction in capital tied up of approximately MSEK 200. Significant non-recurrent costs will burden the years's income. The measures will result in a considerable improvement in income in 2004, and the full effects of the measures will be apparent in 2005. The cash flow is expected to be positive in 2004.

As one result of the measures in the programme, the total number of employees in the Group will decrease by 150 to 175 over a two-year period.

The programme of measures encompasses the entire BRIO Group with the exception of the BRIO Educational business area. A review of the organisation and business has been conducted, and the measures will lead to increased internal efficiency and improved utilisation of resources, among other things. The main parts of the programme relate to:

- Production. The process of outsourcing production will be intensified. This primarily applies to personnel-intensive production. Production at the Snöflingan unit in Osby will be scaled down during the first quarter of 2004.

- Centralisation of functions. The measures encompass both warehousing and internal services. Moreover, the subsidiary organisations will be reviewed with the aim of creating region-based operations.

- Product development. The measures will aim to relocate product development closer to the market to increase the opportunities for monitoring developments and trends. BRIO will continue to be a leader in accessories for the wooden railway, although a clear focus area is to supplement the wooden railway by developing strong new product lines.

"BRIO is now rapidly entering a new development phase, which will have beneficial results. Following implementation of the programme of measures, BRIO, which celebrates 120 years in business next year, will be well equipped to compete on the international toy market," says Tomas Persson, President & CEO of BRIO.