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JULY 28, 2003
A Look at the Leaders Here are 15 of the best companies in Europe, selected to offer a representative sampling by industry and country  Ranking No. 1: HBOSIndustry: Financial Sales: € 30.3 billion Net Income: € 2.9 billion James Crosby, 46 CEO since 2001 Sometimes you win by losing. In 2000, Bank of Scotland came in second to rival Royal Bank of Scotland in a bitter takeover battle for National Westminster Bank. In what seemed like a consolation prize after that defeat, BOS joined forces with Halifax Group, a mortgage specialist. But the deal with Halifax proved a shrewd move for BOS. The product of that merger, Halifax Bank of Scotland PLC, stands at the pinnacle of the BW Europe 50. Heading the new bank, which is now Britain's biggest mortgage lender, is Halifax CEO James Crosby, a former fund manager who's one of the few financiers credited with successfully cross-selling retail banking products, asset management tools such as mutual funds, and insurance policies. Prior to merging, the two banks were considered undersize. But HBOS now competes with traditional British banking titans Lloyds TSB and Barclays.  Ranking No. 2: GLAXO-SMITHKLINEIndustry: Health Care Sales: € 31.9 billion Net Income: € 5.9 billion Jean-Pierre Garnier, 55 CEO since 2000 What's in the pipeline? That's the question investors always ask of drug companies, which need those fresh blockbuster drugs to keep the cash flowing. For GlaxoSmithKline, the answer is: plenty. GSK is working on more than 61 new compounds and 23 vaccines in its labs. GSK boss Jean-Pierre Garnier hopes to introduce 12 new products and improved versions of existing ones over the next year. GSK's strong outlook puts to rest any lingering skepticism that the 2000 merger of British rivals Glaxo and SmithKline was a surefire way to create a stumbling giant. The world's No.2 pharma company now has more than 7% of the global prescription drug market, and it's growing. An innovative plan to create six individual research centers for various therapeutic areas is paying off in faster drug development. Next up: an ambitious program to automate drug-discovery efforts with three massive new facilities in the U.S., Spain, and England. GSK will need all the innovation it can muster, as two of its best-selling anti-depressants, Paxil and Welbutrin, face imminent generic competition. A new version of Paxil debuted in 2002, and a Welbutrin successor is due out by yearend. GSK had better keep that pipeline humming.  Ranking No. 5: ALTADISIndustry: Consumer Staples Sales: € 9.0 billion Net Income: € 435.2 million Pablo Isla, 39 and Jean-Dominique Comolli, 54 Co-Chairmen & Co-CEOs since 2000 Big cross-border marriages often end in tears. But not for Altadis. It's the product of a 1999 merger between two underperformers: Spanish tobacco company Tabacalera and French counterpart Seita. Co-CEOs Pablo Isla and Jean-Dominique Comolli used the 3.5 billion euro deal as an opportunity to boost productivity. Over the past three years, they've laid off 9% of the workforce, shuttered 8 of 17 factories, and opened two new state-of-the-art plants. At the same time, Altadis has made a big push into new markets. Savvy marketing helped increase overseas sales of its well-known Gauloises brand of cigarettes by 9.5% last year. That came despite tax hikes and curbs on cigarette advertising in many countries. Isla and Comolli have even managed to push through price increases for many labels to position them as premium brands. The company is already Europe's third-largest cigarette manufacturer and the world's largest producer of cigars, including Montecristo and Romeo y Julieta 1875. In June, it beat out archrivals British American Tobacco and Altria Group for a majority stake in Régie des Tabacs of Morocco, one of Africa's fastest-growing tobacco markets. This is one tobacco seller that's acting like a growth company.  Ranking No. 6: RASIndustry: Financial Sales: € 15.4 billion Net Income: € 910.8 million Mario Greco, 43 CEO since 2000 War, floods, terrorist attacks, stagnant equity markets. It's enough to make an insurance man run for cover. Yet Italy's Riunione Adriatica di Sicurtà has gone from strength to strength. While other underwriters have seen declines in premiums, profits, and market share, Milan-headquartered RAS has racked up gains in all three areas. RAS's success is due in part to its formidable sales network: It boasts more than 2,000 agents and thousands more indirect distribution outlets, such as bank branches, mostly in Italy. A reputation for innovative savings products gives RAS strong brand-name recognition. And the company, majority-owned by German financial-services giant Allianz Group, has profited handsomely by selling private retirement plans amid nagging worries about Italy's chronically underfunded state pension system. Analysts credit CEO Mario Greco for RAS's solid performance. The former McKinsey & Co. strategist is the brains behind a three-year strategic plan launched in 2000 to sell off assets such as real estate and focus on core financial businesses like its fast-growing RasBank. Greco also has made staff motivational training a priority. Whatever disasters befall the rest of us, RAS looks poised to thrive.
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