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JULY 28, 2003
A Look at the Leaders [Page 4 of 4]  Ranking No. 30: NOKIAIndustry: Info Tech Sales: € 30 billion Net Income: € 3.4 billion Jorma Ollila, 53 Chairman and CEO since 1992 Being at the top of the heap isn't always an advantage. For one thing, everybody else is out to get you. Worse, the only direction to go is down. All of which makes Nokia Corp.'s continued dominance of the cell-phone business the more remarkable. The Finnish giant has managed to eke out market-share gains in the face of ever-more-determined competitors -- without resorting to profit- crushing discounts. There are plenty of mines still in its path: weakness in CDMA handsets, the fastest-growing standard worldwide; an up-and-coming Samsung Group; and emerging Chinese rivals. But none has yet hurt Nokia, whose global market share hovers near an all-time high of 40%. Indeed, the company might be ranked higher if it weren't for the disappointing performance of its stock -- off 75% from its 2000 peak. Weighing it down are halting take-up of wireless-data services and slow deployment of third-generation mobile networks in Europe, where Nokia earns 60% of its revenues. Even so, analysts consider Nokia fully valued, which means investors can expect it to turn in continued good financials but ho-hum shareholder returns for the foreseeable future.  Ranking No. 32: PERNOD RICARDIndustry: Consumer Staples Sales: € 4.8 billion Net Income: € 412.8 million Patrick Ricard, 58 CEO since 1975 Pernod Ricard has plenty of success to toast these days. Two years ago, the French spirits maker raided Seagram Co.'s liquor cabinet, walking away with some choice brands, such as Chivas Regal whisky and Martell cognac. The 3.7 billion euro acquisition catapulted Pernod to the No.3 spot in the industry, with profits jumping 15% in 2002. CEO Patrick Ricard, the son of one of the company's founders, has engineered a major strategic shift. Besides the Seagram brands, he has picked up a pair of Eastern European vodka and bitters distillers. At the same time, he has been shedding ancillary beverage lines, such as Yoo-Hoo and Orangina. Ricard's goal is to refocus the family business on liquor and wine, which will make up 98% of sales this year, up from 40% in 2000. Under his watch, the company has slimmed down to nine drink divisions, ruled by the whiskies, which account for more than a third of total sales. Pernod's eponymous anise aperitif remains the company's best-seller, with nearly seven million cases shipped last year. And Pernod can drink to this: On July 11, the company was officially inducted into the CAC40, the blue-chip index of the Paris Stock Exchange.  Ranking No. 33: CARREFOURIndustry: Consumer Staples Sales: € 68.7 billion Net Income: € 1.4 billion Daniel Bernard, 57 CEO since 1992 Carrefour means "crossroads" in French, but for a time it looked as if the world's No.2 retailer had taken a wrong turn. After buying French rival Promodès in 1999, Carrefour lost ground to competitors as it was overwhelmed by the logistics of absorbing hundreds of additional stores around the globe. Aggressive discounters began wooing away shoppers in France. Meanwhile, economic problems in Brazil and Argentina were hammering operations there. Now, however, it looks as if CEO Daniel Bernard has Carrefour back on track. Currency-adjusted sales rose 4.6% last year, while profits surged 15%. At home, Carrefour has slashed prices to safeguard its dominant market share against the assault of the discounters. And because there is little room to grow in saturated Western Europe, the retailer is driving hard into new markets -- especially China, where it has 40 hypermarkets and is now adding smaller discount stores. Indeed, while Carrefour's annual revenues are still less than one-third those of Wal-Mart Stores Inc., the French retailer has a stronger record in adapting its operations to foreign markets. For Carrefour, the road ahead looks smoother.  Ranking No. 38: TELECOM ITALIA MOBILEIndustry: Telecom Services Sales: € 10.9 billion Net Income: € 1.2 billion Marco De Benedetti, 40 CEO since 1999 Telecom Italia Mobile (TIM) has long been Europe's cellular darling, with a dominant 46% market share at home and high margins. Italians fell in love with mobile phones at first sight; mobile handset penetration, at 95% as of the end of 2002, is one of the highest in the European Union. And Italians have been among the fastest on the Continent to embrace new features, such as multimedia phones. Italy's love affair with cell phones has helped TIM ring up steady growth in revenues and profits. Net income jumped 22.6% in 2002 despite TIM's writedowns of stakes in several international mobile operators. Yet the giddy days of fast growth in basic mobile voice service are drawing to an end. As new cellular subscribers become scarcer, existing players will have to ramp up marketing -- and sacrifice margins -- to steal customers from rivals. In the first quarter of 2003, average revenue per customer actually declined for the first time since 2000 on a combination of tariff cuts and increased competition. TIM Chief Executive Marco De Benedetti is counting on slick new data services, including video messaging, to juice growth. This investor favorite will have to prove its staying power.
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