The Best European Performers

When German auto maker Porsche (PSEPF ) showed its Cayenne sport-utility vehicle at the Geneva car show in 2002, some Porsche connoisseurs turned up their noses. But the company believed there was an underserved market for the powerful new model, based on market research that showed car buyers would pay a premium for the speed Porsche is famous for in the shape of an SUV. The crossover vehicle, which can go from zero to 100 kilometers per hour in just 5.6 seconds, proved a big hit with consumers, especially in the U.S. Brisk demand for the Cayenne helped drive Porsche's sales up 15% last year and push its profits ahead by 22%. Largely because Porsche was in tune with what its customers wanted, the Stuttgart company takes pride of place as No. 1 in BusinessWeek's second annual ranking of Europe's 50 best-performing companies. "The only thing that counts is success and that you deliver what you promise," says Porsche Chief Executive Wendelin Wiedeking.

Scan this year's list of top companies, a ranking of earnings growth and other performance measures based on the Standard & Poor's Europe 350 Index, and a few dominant themes emerge. Carmaker Renault joins Porsche in the top five. Retailers such as Tesco PLC (TWCDY.PK ) (No. 12) are a big presence, thanks to credit-card-fueled shopping binges. And many banks such as HSBC Holdings (No. 5) and France's Société Générale (No. 23) are seeing a boom fueled by record low interest rates and a pickup in loan demand. Energy companies such as ENI (E ) (No. 8) and BP (No. 15) are also among the leaders, thanks in no small part to a surge in oil prices.