BudapestBusiness Journal 21/04

BBJ HUF 1,250 | €5 | $6 | £3.5

VOL. 21. NUMBER 04 FEB 22, 2013 – MARCH 07, 2013

Budapest Business Journal

79%

OF GDP WAS HUNGARY’S GROSS STATE DEBT AT THE END OF 2012

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

SPECIAL REPORT

IN TIMES OF CRISIS, TALENT MANAGEMENT PAYS OFF IN THE 〉12-19 LONG RUN

30bln The projected growth (HUF) of the e-commerce segment in 2013, half of which will be generated by industry newcomers.

PAGES 10-11

ECONOMY

SOCIALITE

TRENDS

Victory or defeat?

The latest hype in town

GDP nosedive

After the European Union’s budget talks, the government sees Hungary as one of the biggest beneficiaries of the next EU budgetary period starting in 2014, but opponents say any claims of victory stem purely from juggling numbers.

PAGE 03

The first real life room escape game opened its underground doors in Budapest less than two years ago, and unleashed a frenzy the Hungarian capital hasn’t seen since the opening of the first ruin pubs at the beginning of the new Millennium.

PAGES 20-21

Last year ended in recession, with an economic contraction of 1.7%. PAGE 09

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András Simor’s harried term as head of the central bank is almost over, but the government has no plans to commemorate his term in office by presenting the governor with the proverbial golden watch.

Prime Minister Viktor Orbán has never made a secret of the fact that he isn’t a big fan of Simor, who was nominated to his post by the previous socialist administration. Orbán famously and unflatteringly called him an “offshore knight” for keeping his wealth in foreign bank accounts, and has often criticized the bank on moral and/or professional grounds.

That was until a new central bank law was passed that was widely perceived internationally as an infringement of institutional independence, and sparked what could have escalated into an economic disaster in late 2011. The European Union and market participants eventually forced the government to fully retract the legislation, as it was the key issue that prevented the start of formal credit line talks with the International Monetary Fund.

After that, the prime minster and ranking government officials were reluctant to even mention the central bank in public, as it could be seen as yet another infringement on independence and lead to market pressure on Hungarian assets.

But now, with no further expectation of an IMF agreement being concluded, and with a heavily oversubscribed bond issuance under its belt, government attacks are being directed at Simor once again.

The state auditor ÁSz (led by a former Fidesz MP) identified what it sees as illegalities in the operations of the central bank in the past years, and also accused the MNB of giving confidential information to the IMF in 2008, thus weakening the country’s negotiating position. Simor was summoned to a parliamentary committee to answer the accusations, having rejected the claims in the ÁSz report.

Regardless of how the question of succession turns out next month, it seems fair to say each side will be happy to be rid of the other.

Looking for Hungary’s very best The soon-to-be-introduced new subject in Hungary’s education system teaching pupils morality may bring additional benefits besides rearing a new generation of upstanding citizens. If a conservative group has its way, the selection process for the teachers will show us who the glowing pillars of decency in this country truly are.

The organization calling itself the National Association of Parents has released a proposal, laying out rather specific eligibility criteria for the type of people they would be happy to see planting the seeds of ethics in their children’s minds.

They would prescribe that anyone who teaches morals should themselves lead an exemplary life. The ideal candidate doesn’t smoke, doesn’t drink, is married – civil partnerships excluded –, has children, doesn’t have any sexual perversions (exactly what that covers isn’t specified), and doesn’t even watch erotic movies at home. In other words, said educator should be as holy as,

or preferably holier than, the Pope. Once these paragons are identified, their skills could be put to a whole range of different uses besides the undoubtedly important task of teaching.

They could be rallied to form a corps of morality storm troopers, and deployed in the areas of the economy where they are most needed.

No more corrupt officials, no more misleading advertising, no more shady business executives who wiggle out of paying their business partners, no more pandering politicians. Finally, having the most decent people the country has to offer in the most important places could be the thing to end the prevalent grift that is perhaps a bigger bane to the economy even than drought.

Of course, until the vats that allow the mass production of such people are invented, we’ll have to get by in our own flawed way, and do the best we can.

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Hungarians wouldn’t rush eurozone participation Boosting venture capital for SMEs

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macroscope Prime Minister Viktor Orbán came away from the European Union’s budget talks claiming victory after hammering out better funding terms for Hungary than had been expected.

The government sees Hungary as one of the biggest beneficiaries of the next budgetary period starting in 2014, although its opponents say any claims of victory stem purely from juggling numbers.

BBJ GERGŐ RÁCZ

European Union leaders concluded an unsurprisingly lengthy debate in Brussels early February and agreed on the fundaments of the bloc’s next seven-year budget. As a result of the negotiations, the 2014-2020 period has an allocation of €960 billion compared to the €993.6 bln approved for the previous time span ending in 2013, reflecting pressure from member states such as Great Britain, which had urged the EU to adopt a more stringent approach to its finances.

Orbán stated that Hungary’s negotiators were capable of increasing the country’s central funding framework even as the next budgetary period brought cutbacks to the EU as a whole, this latter fact being unprecedented in the bloc’s history. Hungary has been approved €20.5 bln in cohesion funds for the seven-year stretch plus another €4 bln in agricultural and other subsidies. Orbán told parliament that the agreement means the country will get HUF 712,000 in per capita funding from the EU, up from HUF 660,000 in the previous budgetary period.

“We have never seen such success since Hungary’s accession to the Union in 2004,” Orbán said in his address to parliament.

Orbán’s claims to success are supported when compared to the original plans from last year that would have seen Hungary’s funding reduced by some 30%, meaning the terms are much more advantageous than could have been expected.

The premier has repeatedly stated that the funding coming from Brussels is “our money”.

Photo: European Comission

EU budget debate – victory or defeat?

EU HEADS OF STATE AND SENIOR OFFICALS’ GROUP PHOTO AFTER A SUMMIT

Government officials have made extensive efforts and participated in the Friends of Cohesions initiative that comprises states advocating the need for the European Union to continue its heightened support for EU states that are less economically advanced than their counterparts in the Western parts of the continent.

QUESTION OF PERSPECTIVE The political opposition and some economists have criticized Orbán for juggling with the numbers; changes in the euro-forint exchange rate mean that any gains the government claims to have achieved exist solely on paper without any tangible future benefits for the country.

They note that measuring the aggregates for the previous against the next budgetary period is a mistake, since there have been major changes in exchange rates, inflation as well as demographic conditions, factors that all skew any possible comparisons.

“We were bombarded with seven goals in the first half, and we managed to pull back two or three in the second as consolation,” former prime minister and head of the Együtt 2014 opposition movement Gordon Bajnai said of the deal, deliberately using football terms to reflect Orbán’s self-professed love of the sport.

Others in the opposition camp expressed similar views: chairman of the socialist MSzP Attila Mesterházy said that, in euro terms, the government had actually surrendered a €4.6 bln reduction when compared to the €25 bln available in the 2007-2013 period.

Government officials rejected the objections.

Orbán, echoing the words of his Fidesz party’s caucus leader Antal Rogán, said that the main aspect when considering the outcome of the decision is that Hungary remains a net recipient of EU funds, meaning the country still gets more out than it contributes into the central budget.

“What we have toiled to reach is an opportunity, a financial framework that Hungary may claim and put to use,” he said. “The results of the government’s negotiations require no commu-

nication tricks, the numbers reflect the truth,” he added in rejection of opposition claims that the government is showboating. Orbán boasted that, overall, Hungary claimed the second best position of all the EU nations during the negotiations, with only Lithuania reaching better terms.

Whether the budget is ultimately approved is still up for debate, since, for the first time ever, the European Parliament has veto powers over the budget terms agreed upon by the member states.

“We mustn’t give up on this fight,” Mesterházy told parliament, and urged the government to summon Hungary’s EP representatives to prepare them to argue Hungary’s case to fellow MEPs. EVERY PENNY COUNTS Apart from the political gains stemming from reaching more favorable terms than expected, the government is all the more committed to raising the level of available EU funding to the maximum possibly attainable for one simple reason: it’s the only money the country is getting that goes on development.

The 1% contraction to investments planned for this year in the annual budget was to be contained almost exclusively

through the utilization of EU funds, with hardly any private sector involvement foreseen. Even if the funding is available, Hungary has previously produced questionable results when it comes to actually putting the available budget to use. Businesses seeking to take advantage of the tender openings find themselves excluded, unable to raise the necessary co-payments needed to even apply, lacking capital of their own and having difficulties securing bank loans.

State secretary János Lázár said that so far there are valid contracts for 85% of the available 2007-2013 budget, but added that the government will be looking to make major efforts to accelerate the process, distributing some HUF 1.5 trillion this year.

The government has shown its dissatisfaction with the allocation of funds so far, if the disbanding of the National Development Agency (NFÜ) tasked with overseeing EU-funded development projects is any indication, not to mention accusations that millions have been doled out on pointless projects.

Reports citing anonymous inside information have claimed that the government has yet to finalize how the funds in the upcoming budgetary period will be managed. ■

PwC Hungary presents the introductory video message of CEO Nick Kós, who talks about teamwork, the operation of the company and things that employees are proud of.

04 1 News BBJ

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Budapest Business Journal | Feb 22 – March 07

bi-weekly

QUOTE OF THE WEEK

We shouldn’t behave like we were victims or if we were a small country

DEPUTY HEAD OF THE ROMANIAN SENATE CRIN ANTONESCU UPON A DECISION TO DISPLAY THE BANNER OF THE SZÉKELY ETHNIC HUNGARIAN GROUP ON PARLIAMENT IN BUCHAREST, REJECTING ACCUSATIONS FROM BUDAPEST THAT ROMANIA WOULD BE LOOKING TO OPPRESS THE HUNGARIAN MINORITY BY LIMITING USE OF ITS SYMBOLS.

NEWS FOR THESE PAGES IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.

Hungarian soldiers packing up in Afghanistan

ECONOMY CITY: EXTERNAL MPC MEMBERS “BECOMING MORE DOVISH” Hungary’s central bank is becoming increasingly inclined to even deeper interest rate cuts as inflation is heading towards the 3% target and the economy is in recession, London-based emerging markets analysts said.

In a report highlighting key findings of a recent trip to Budapest, released to investors in London, economists at Barclays said they found that the external members of the MPC “had become more dovish.” Following cuts of 150bp since August to 5.5%, “we think they are prepared to continue cutting in 25bp increments by another 150bp until they reach 4.0%.” According to the report, the logic of the external MPC members is that inflation, now 3.7% year-on-year as of January, is within the 2-4% target and likely to decline further. Growth is weak and therefore domestic demand pressures are not contributing to inflation. Furthermore, real rates are now inappropriately high given the

recessionary environment, and Hungary’s risk premium has declined permanently in the opinion of the external MPC members, Barclays’ analysts said.

GROSS DEBT 79% AT END OF 2012 Hungary’s gross state debt, according to the Maastricht definition, was HUF 22.373 bln or 79% of GDP at the end of 2012, the National Bank of Hungary (MNB) said in a first reading of financial account data. The appreciation of the forint reduced the debt

by HUF 690 bln and net borrowing increased it by HUF 373 bln last year, the MNB said. The debt ratio rose slightly from 78.6% at the end of Q3 while it dropped from 81.4% at the end of 2011.

General government net financing requirement reached 3.3% of GDP in the fourth quarter of 2012 and was 2.1% of GDP in 2012.

DOLLAR BOND COVERS MORE THAN HALF OF FOREX ISSUE PLAN A little more than half of Hungary’s foreign exchange issue plan was completed with a $3.25 bln bond sale on February 12, László András Borbély, deputy head of the state debt management agency ÁKK,

Photo: Szilárd Koszticsák/MTI

The Hungarian military will end its deployment to Afghanistan in March and is withdrawing troops. The Hungarian Provincial Reconstruction Team was stationed to the Baglan province for six years and currently oversees the training of Afghani soldiers and helicopter pilots. The extraction of the PRT started in December and is progressing as planned. said on public radio. Borbély said the issue was swapped into euro – worth €2.5 bln – thus the entire cash flow would be in euros. The proceeds compare to this year’s foreign exchange expiries of €5.1 bln, of which ÁKK plans to repay €4-4.5 billion by issuing bonds. The cost of the five-year bond is about 4% in euro terms, while that of the ten-year bond is 5.2%, Borbély said. ÁKK opted for a dollar issue considering demand from U.S. investment funds for higher risk, higher yield papers, he added. Hungary sold $1.25 bln of 5-year bonds at 335 basis points over the corresponding U.S. treasuries, and $2 bln of 10-year papers at 345 basis points over the benchmark. The spreads were at the lower end of the ranges indicated in the final guidance, and 10 basis points under the initial price recommendation.

CPI SLOWS TO 3.7% IN JANUARY Consumer prices in Hungary rose 3.7% year-on-year in January, slowing from a 5% increase in the previous month as tax hikes left the base period, the Central Statistics Office said. The main VAT rate in Hungary rose from 25% to

27% in January 2012. A breakdown of the data shows food prices rose 5.8% year-on-year in January. Alcohol and tobacco prices jumped 13.1% on excise tax increases, but consumer durable prices fell 2.1%.

Household energy prices were up 2.4% and service prices climbed 3.1%, under the headline figure, while prices in the category that includes vehicle fuels edged up 1.3%.

LOCAL COUNCILS POST HUF 132 MLN SURPLUS IN 2012

Hungary’s local governments had net financing capacity of HUF 132 mln in 2012, preliminary financial account data published by the National Bank of Hungary (MNB) shows. Local councils’ debt on loans and bonds fell HUF 145 bln to HUF 1,064 bln, partly on the repayment of small councils’ debt by the central government at the end of last year. The 2012 net financing capacity, which is a good approximation of an accrual-based surplus, com-

pares to a HUF 22 mln deficit registered by the municipalities in 2011. In Q4 alone, local councils had a surplus of HUF 17 bln.

CONSTRUCTION SECTOR STILL ON THE SLIDE The building industry remains in the doldrums, with latest statistics showing yet another 3.1% contraction in December yearon-year. The Central Statistics Office (KSH) said in annual terms, the building

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Budapest Business Journal | Feb 22 – March 07

sector shrank by 5.9% last year. ÉVOSz, the association of construction fi rms, expects the fi rst half of 2013 to bring another 2-3% contraction with stagnation in the second half. The group’s deputy chairman László Koji told business daily Napi Gazdaság that a tumult of newly revised sectorial legislations makes the operation of building fi rms even more confusing and difficult than before.

NUMBER OF REGISTERED JOBSEEKERS INCREASING

TRIGRANIT FORMS PARTNERSHIP WITH MACEDONIAN PEER Hungarian property developer TriGranit has signed a cooperation agreement with Macedonia’s ERA Group Holding. Under the agreement, TriGranit’s property management unit will be involved in operating ERA Group’s Skopje International Exposition and Fair Center and a neighboring events center. ERA Group has plans to build a new shopping, entertainment, office and hotel center in the capital. Macedonia is the tenth country in the region in which TriGranit has

FASTEST OUTFLOWS FROM CEE BANKS RECORDED IN HUNGARY Capital withdrawal by for-

Photo: Attila Kovács/MTI

After deterioration in November and December, the State Employment Service (NFSz) found that yet another 79,000 people have appeared on the

BUSINESS

final license for trains it is delivering for Budapest’s new underground line, the mayor’s office said. The receipt of the license from the national transport authority NKA will allow Alstom to start production and delivery of the vehicles for the number four metro line, which is still under construction, the office said.

The driverless “Metropolis” trains each have four carriages. Alstom is also supplying trains for the capital’s number two metro line, replacing Soviet-era vehicles that are some 40 years old.

albeit this process has already decelerated. It also said that the decline in the Hungarian banking sector’s loan-to-deposit ratio from a 165% peak to around 110% shows that deleveraging has gone a long way but will likely continue until the LTD ratio stabilizes below 100%.

MINISTRY TO NEGOTIATE WITH BANKS ON INCENTIVES FOR INCREASED LENDING The National Economy Ministry will hold talks again with banks and offer them significant preferences for expanding their lending activities, daily Magyar Nemzet wrote, citing state secretary for tax and financial affairs Gyula Pleschinger. The government is trying to reach an agreement with banks that offers incentives for increases in lending activity, Pleschinger told the paper. Lenders could be offered rebates or write-offs on the bank levy, he added. The government wants to offer banks a “more aggressive” system of preferences in the agreement, which could be reached by the end of spring, Pleschinger told Radio G7, the paper said. The Hungarian Banking Association simply said it is preparing for the talks with the ministry when asked about the report in Magyar Nemzet.

MEDIA MARKT, BAUMAX TO LAUNCH ONLINE SALES

BIG NEWCOMER TO BUDAPEST ZOO An elephant was born in the Budapest Zoo on February 14, weighing in at 75 kilograms and a height of 85 centimeters. After an initial scare about whether the newborn would survive, it started feeding unassisted and is healthy. Visitors will shortly be allowed to see it after it grows more accommodated to its environment. job market in January, which marks a 13.9% increase. The statistic means the agency has 648,000 unemployed people in its records. The number of new openings dropped: 3,000 companies announced demand for a combined workforce of 20,500. There were 47,400 unfilled jobs in the month.

a presence. The company has completed more than €2.5 bln of developments and is working on projects worth a further €4 bln.

ALSTOM ACQUIRES LICENSE FOR METRO 4 TRAINS French engineering giant Alstom has acquired the

eign banks over the past four years was fastest in Hungary in the Central and Eastern European region, business site Portfolio reported citing a research note by Citigroup published on February12.

Citi found Hungary to be the most vulnerable, saying deleveraging will continue,

Consumer electronics and household appliance retailer Media Markt and do-ityourself chain bauMax both plan to launch online sales, business daily Napi Gazdaság said. The Hungarian unit of UK retailer Tesco told MTI in January that it would launch its own webshop in the first quarter of this year. Communications directors for the local units of Auchan and Spar told MTI the retailers were considering online sales but had not taken any decisions on the matter. Online pur-

chases by consumers in Hungary came to HUF 155 bln in 2011, according to a survey by GKIeNET and T-Mobile.

ZSOLNAY GETS NEWS OWNER Porcelain maker Zsolnay Porcelánmanufaktúra Zrt has a new majority owner after Swiss-Syrian businessman Bachar Najari paid the city of Pécs HUF 180 mln for the asset. The new owner controls HUF 74.5% of the firm and has pledged HUF 500 mln in fresh capital. Najari said the main driver behind buying the ailing company was the Zsolnay brand, which is widely recognized internationally and holds ample potential.

DOMESTIC STATE AUDITOR FINDS TRANSGRESSIONS IN MNB DEALINGS WITH IMF The state auditor ÁSz has published new criticism in a report on the operation of the National Bank of Hungary (MNB), claiming the central bank violated the limitations of its jurisdictional scope and released confidential material to the International Monetary Fund. The ÁSz report states that the MNB gave the fund confidential business information regarding the operation of commercial banks in Hungary from 2008. ÁSz also identified smaller mishaps in the data management practices of the bank.

Imre Puskás of the governing Fidesz party held a press conference where he criticized the bank, claiming it had acted against the interests of Hungary and only compounded the country’s vulnerability at the height of the Lehman Brothers crisis by strengthening the IMF’s positions during loan talks by giving out the information. He added that Fidesz would summon a committee hearing in parliament where the central bank

will be called on to answer for its actions. The central bank issued a statement in which it fully rejected the accusations released by ÁSz stating that it’s operation was fully legitimate. The bank gives a point-by-point rebuttal to the ÁSz report, claiming that the findings are skewed and produce the perception of irregularities where there are none to be found.

HUNGARIAN PARLIAMENT PASSES NEW CIVIL CODE Hungary’s Parliament approved a new Civil Code on February 11 that incorporates provisions on the rights and responsibilities of companies.

The code raises the minimum capital requirement for limited liability companies (Kft) from HUF 500,000 to HUF 3 mln (€10,300), the same level as before 2007. The new code was approved with 245 ayes, 43 nays and 35 abstentions.

The Civil Code it replaces has been amended more than 100 times since it was introduced in 1957.

HUNGARIANS WOULD NOT RUSH EURO ZONE PARTICIPATION About 58% of Hungarians believe the country should wait until after 2018, when the next government cycle ends, to begin preparations to join the euro zone, news agency MTI reported citing a survey by Századvég Foundation. About 56% of those who said the preparations should start after 2018 believe the introduction will require austerity measures and 16% think prices will rise as a result. The survey showed 27% of Hungarians think preparations to adopt the single currency should start during the next government cycle, in 2014-2018. About 15% of those surveyed said they did not know or declined to answer. The survey of 500 adults was conducted at the end of January. ■

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energy

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Budapest Business Journal | Feb 22 – March 07

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, ENERGY TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

HUNGARY’S MOL STARTS DRILLING IN OMAN BLOCK Hungarian oil and gas company MOL started drilling its first well in Oman’s Block 43/B in December, and is working on publishing a tender for geological and seismic measurements in the country’s Block 66, Zoltán Fetter, managing director of MOL’s local unit told MTI on February 12. MOL signed an exploration and production sharing agreement for Block 43/B in 2006. A similar agreement for Block 66 came into effect last December. MOL earlier said that total unrisked prospective recoverable resource potential of Block 66 could reach 200 million barrels of oil equivalent. Fetter said about 100 million barrels of oil equivalent was assumed to be in Block 43/B. The drilling of the well should be completed by mid-summer or early fall, he added.

regional SLOVENIA TO GIVE GREEN LIGHT TO CROATIA’S EU ACCESSION, PRESIDENT SAYS Slovenia will ratify Croatia’s entry into the European Union, the Croatian Times reported on February 18, citing Slovenian President Borut Pahor.

After a meeting with parliamentary leaders in Ljubljana, Pahor told journalist that he had managed to persuade all seven parliamentary parties “to agree to try to ratify Croatia’s accession treaty in good time.” Slovenia, beset by a financial and government crisis, is the only EU member that has shelved the ratification, due to a dispute over Ljubljanska Banka, a Slovenian lender that closed down when the two countries declared independence from Yugoslavia in 1991, without reimbursing its Croatian depositors.

The two former Yugoslav republics’ foreign ministers came within reach of a deal earlier in February and a final meeting was set for February 19. Croatia is set to join the EU on July 1 this year.

POLAND TO EASE ENVIRONMENTAL RULES SLOWING SHALE SEARCH Poland’s Environment Ministry plans to ease regulations that slowed exploration for shale gas and boosted costs for investors.

A number of rules will be clarified, while environment impact assessment reports will be required only for a drilling site rather than the whole acreage of a license, the ministry said on February 15 in a statement.

Rules requiring investors to seek permits any time they want to drill deeper or in a different direction than originally planned have slowed down Poland’s goal of cutting its dependence on Russian gas. “Our goal is to start shale gas production as soon as possible and that requires regulation that will be friendly for investors,” Environment Minister Marcin Korolec told Bloomberg. The Eastern European country has granted 113 exploration licenses to

companies including statecontrolled PGNiG SA and Chevron Corp to tap shale gas resources estimated at about 50 years of consumption.

PUTIN CALLS FOR ‘GRADUAL’ END TO GAZPROM MONOPOLY ON LNG EXPORTS Russia’s President Vladimir Putin called for a “gradual” end to Gazprom’s monopoly on exports of liquefied natural gas as OAO Novatek and the state-owned OAO Rosneft seek the right to ship fuel abroad. “It’s necessary to think about gradual liberalization,” Putin told an energy commission meeting with industry leaders February 13, quoted by Bloomberg. Russia risks losing LNG markets to its international competitors unless the country acts, he said. Putin needs to balance calls from Novatek, Russia’s second-largest gas producer, and Rosneft to open exports and encourage investment in new fields, with protecting government interests represented by Gazprom. Russia is seeking routes

SHARE OF RENEWABLE ENERGY IN EACH SECTOR IN THE EU 27 2030 SCENARIO

SECTOR

Share of renewables in final energy consumption

Industry Buildings Transport Total

Amount of renewable energy (EJ)

41% 49% 36% 41%

4 7 5 16

Total amount of energy (EJ)

10 14 15 39

EU CAN BE 100% RENEWABLE BY 2050, WWF SAYS A new World Wildlife Fund (WWF) report found that the European Union could be fully powered by renewable energy by 2050, if Europe could reduce its energy consumption by over one third and generate almost half of its energy from renewables by 2030. According to the report, Putting EU On Track For 100% Renewable Energy, the region has significant untapped potential for reducing its energy use and maximizing indigenous power sources that could provide cheaper and more secure energy. However, this potential is hindered by the “lack of political ambition”, the report said. With the 2030 recommendations applied, the EU could also reduce its €573 billion ($888.72 bln) external fossil fuel bill and cut its greenhouse gas emissions by 50% compared to 1990 levels. In a survey conducted by WWF, it is found that about eight out of ten Europeans believe that addressing climate change can usher economic growth and create jobs. Meanwhile, 70% of Europeans agree that investment in renewable energy should be a priority in the next three decades, unlike other alternative energy sources such as shale gas, nuclear and carbon capture and storage plants.

Source: WWF report ‘Putting the EU on track for 100% renewable energy

to supply Asia, where demand is growing, to counter weaker European markets.

GAZPROM PLANS $4.7 BLN REFUND TO EUROPEAN CUSTOMERS Russian gas monopoly Gazprom expects to hand $4.7 billion in price cuts to European

consumers this year, company officials said on February 8. Customers and competitors have been pressing the state-controlled company to cut its prices in Europe, where it generates nearly 60% of its revenues from gas sales. In response to falling demand due to Europe’s economic slump,

energy efficiency drives and competition from liquefied natural gas, especially in its main market Germany, it has amended long-term contracts with some European clients.

Gazprom set aside RUB 133 bln ($4.4 bln) for 2012 refunds, and said it paid out only $2.7 bln. ■

makes up some 10% of all consumed spirits, the report said, citing estimates from the respective ministries.

REAL ESTATE PRICES IN SLOVENIA DROP TO 2006 LEVEL IN 2012 Average housing real estate prices in Slovenia reached the lowest level since 2006 at the end of 2012 and continue sliding, the Slovenia Times reported citing the Slovenian Surveying and Mapping Authority (GURS). GURS said, however, that one could not say that this was an indication of a crisis in the real estate market. The average price of existing f lats dropped by nearly 4% in 2012 and continues to slide slowly.

The average price of f lats sold in 2012 reached the lowest level since the authority started monitoring real estate prices in 2007.

A more or less strong trend of declining real estate prices was recorded in cities throughout the country the authority said. The average price of f lats sold in the final quarter of 2012 in the capital Ljubljana was down 6% year-on-year.

For the first time since the launch of monitoring, the price in Ljubljana dropped below €2,300 per square meter. ■

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, REGIONAL TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

BULGARIAN PARLIAMENT AMENDS CASH-FORCITIZENSHIP LAW Bulgaria’s Parliament amended parts of a new law offering citizenship to foreign investors on February 13, watering down some of the permanent residency requirements after the president vetoed them, AFP reported. The law, which was initially adopted by Parliament last November, offered Bulgarian citizenship to any foreign investor willing to pour BGN 1 million (€510,000) into the country’s ailing economy. Apart from the investment, the applicant had to be a permanent resident for at least a year – a status that in itself required an investment of at least BGN 4 mln in a Bulgarian company that created 50 jobs. Parliament changed the permanent residency requirements, significantly lowering the investment sums for several different categories of applicants. Under the new regulations, permanent residency will be granted to anyone who invests BGN 600,000 in Bulgarian property, BGN 500,000 in a

company that opens at least 10 jobs or BGN 250,000 in a fi rm that opens five jobs in an economically underdeveloped region.

scale. Gestamp’s clients in the four countries concerned include Audi, Fiat, Ford, GM, Hyundai, Mitsubishi, PSA, Renault-Nissan and VW.

EBRD LENDS €150 MLN TO GLOBAL AUTO-PARTS SUPPLIER The European Bank for Reconstruction and Development will back the investments of Gestamp Automocion SA, one of the world’s leading manufacturers of auto parts, with a long-term loan of €150 million, the London-based lender said in a statement on February 11.

It is aimed at upgrading Gestamp’s Russian, Polish, Hungarian and Turkish plants which supply assembly lines set up by major international car manufacturers in these four markets, the EBRD said.

Gestamp, a Spanish-registered and family-controlled group, plans to invest €255 mln in capital expenditure up to 2016. This will enable the company to move closer to its key customers in these countries, a key goal to increasing its competitiveness and part of a strategy to foster long-term relationships with such major clients on a global

CZECHS SPEND $1 BLN ON DRUGS AND PROSTITUTES Czechs annually spend about CZK 20 billion ($1 bln) on drugs and prostitutes in spite of the ongoing economic crisis, news agency CTK wrote, citing a report by daily Pravo. Czechs spend CZK 12 bln on drugs and CZK 8 bln on prostitution, though many citizens’ incomes are decreasing, the report said.

The number of occasional marijuana and hashish users who took the drug at least once a year, is put at millions in a country with a population of 10.5 mln. Hundreds of thousands more occasionally use pervitine (methamphetamine), cocaine, ecstasy party drugs and LSD. Czech Republic leads the standings in pervitine production and the drug is exported from the country, according to the report. Czechs also spend billions of crowns annually on smuggled or illegally produced alcohol, which

POLISH PRODUCER PRICES DROP, INDUSTRIAL OUTPUT REBOUNDS IN JANUARY Poland’s producer prices decreased at a slightly faster rate than economists expected in January, a Statistical Office report shows.

The producer price index dropped 1.2% on an annual basis in January, after falling 1.1% in December.

Economists had forecast prices to fall 1.1% in January too. Mining and quarrying prices dropped 5.9% year-on-year, while prices in the manufacturing sector dropped 1.7%. Output prices of utilities, meanwhile, rose 5.7% compared to January 2011. On a monthly basis, output prices edged up 0.1% in January. Separately, the agency in Warsaw said Poland’s industrial production increased at a significantly faster rate of 5.4% yr/yr in January than 2.7% forecast by economists. Month-onmonth, industrial production moved up 0.3%.

1 News 07

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Budapest Business Journal | Feb 22 – March 07

Boosting venture State seeks control of flu shots capital for SMEs State-owned fund to disburse HUF 3.5 billion for SMEs in 2013.

BBJ GABRIELLA LOVAS

Access to financing is essential to enhance and increase the competitiveness of small and medium-size enterprises. However, in response to tougher economic conditions, bank loans remain out of reach for most SMEs. Financing through the stock exchange is currently not a viable option, as investors have grown cautious of firms with small capitalization and the funds of institutional investors are shrinking. One promising alternative financing source could be venture capital.

With the launch of the EU’s JEREMIE II program and the planned introduction of three new instruments by the state-owned Széchenyi Capital Fund Management Zrt in March, new financing options appear to be opening up for SMEs. Under the JEREMIE II program, announced by the Hungarian Development Agency (NFÜ), ten new VC funds will have a total of HUF 41 bln to invest in seed and growth stage startups in 2013-2015. The beneficiaries of the four new Joint Seed Funds will be micro-and small enterprises, which were established less than three years from the first investment decision and whose consolidated net sales do not exceed HUF 200 million in any fiscal year preceding the application for grant. The target beneficiaries of the six new Shared Growth Funds are SMEs founded less than five years from the investment decision and with consolidated annual net turnover not in excess of HUF 5 bln in the proceeding business year.

Under the framework of the JEREMIE I program, eight venture capital funds started investment activities in the second half of 2010. They have until the end of this year to invest their funds. JEREMIE I funds targets SMEs no older than five years with net annual income of less than HUF 1.5 bln.

FILLING A NICHE The state-owned Széchenyi Capital Investment Fund (SzTA), which began operations in July 2011, provides capital for businesses operating in sectors deemed important for Hungary’s economic policy, but which fall outside the scope of private equity and venture capital investors. These typically include traditional sectors such as the metal industry, plastic processing and packaging. The primary target sectors of the JEREMIE programs, but contrast, are healthcare, biotechnology, services, alternative energy and IT. “We do not want to compete with the JEREMIE funds, because there are major

SZÉCHENYI CAPITAL INVESTMENT FUND INVESTMENT DECISIONS BY SECTORS SECTOR

NO. OF COMPANIES

Manufacturing

13

Human services Health

6 5

IT Packaging Food Other

4 3 3 8

Getting the flu is never fun, but the sniffles are, needless to say, in vogue at this time of the year, with vaccines consequently in high demand. After spending around HUF 1.5 billion on inoculations every year, the state is now looking to take control of supply.

After energy, manufacturing and the banking sector, the state is now looking to strengthen its presence in the health industry.

According to a report published in political daily Népszabadság, the state is about to become the majority stakeholder in a new firm that will be tasked with producing and supplying the nation’s flu jabs.

The vaccine shots are currently supplied by two companies, according to the state health

Although Omninvest retains its leading position on the vaccine market, the last few years have seen the company faced with financial adversities. Despite substantial state support, plans in the middle of the past decade to cash in by being one of the first producers of avian flu vaccines proved to be a failure, with minimal returns.

The firm was (and still is) criticized for being an offshore company with ownership relations that are consequently unknown, and yet still receiving sizable state subsidies to oversee a key segment of public health. Eventually, charges were raised against the company, which – albeit denying any wrongdoing – eventually paid back the HUF 2 billion it got from the state with interest in 2011.

According to Népszabadság the plan to assume state control over vaccine manufacturing was partially proposed by Omninvest itself, which told the government late in 2011 that it lacks the finances required to perform its contractual duties.

service ÁNTSz. Omninvest provides 1.3 million doses that are distributed free of charge to adults with preexisting conditions, and who are consequently vulnerable to the virus.

Another 7,000 vaccines are targeted at people with hemophilia, as well as children who are deemed at risk; Sanofi Pasteur provides these.

The newly reported plans would considerably change the current chain of supply. As ÁNTSz told the Budapest Business Journal, Omninvest will continue to deliver the inoculations based on a long-term contract signed with the previous government, while Sanofi Pasteur won its niche commission via a public procurement tender.

The reported plans would see MNV Zrt, the state asset management company, overseeing the majority state control in the partnership with Omninvest, with the firm being overseen by a four-member panel with delegates from MNV, ÁNTSz, the Human Resources Ministry and Omninvest.

The government has yet to confirm the news and there are no concrete facts about what this would mean in terms of costs. ÁNTSz said the state currently spends slightly more than HUF 1.5 bln on the procurement of the mandatory vaccines, a cost level that is unchanged from 2011. ■

BBJ GERGŐ RÁCZ

Source: SzTA

differences between our investment policies,” emphasized SzTA chairman-CEO Imre Csuhaj. Rather than focusing only on a company’s profitability, the fund aims to boost national economic growth, increase employment and support the development of economically depressed regions.

The SzTA provided close to HUF 1 bln in funds to Hungarian SMEs in its first year of operations. With the planned introduction of three new instruments, Széchenyi Capital Fund Management Zrt, the fund manager, aims to invest an additional HUF 3.5 bln in 2013. Csuhaj noted that the maximum investment value of the new products will be raised to €750,000 from the current €200,000. The fund has a total of HUF 14 bln available for the program until the end of 2015. In comparison, the maximum investment amount of the JEREMIE I funds is €1.5 million/company in one year.

The JEREMIE funds aim to acquire a more than 50% stake in the target company and are involved both in the management selection process and the business operations of the target. The SzTA, however, does not aim for majority ownership and acts more like a financial investor. Its participation in the decision-making process is limited to controlling use of the funds and monitoring the operations of the target.

Exit rules are different, too. JEREMIE aims to sell its shares through tenders or on the stock exchange; the program does not support the redemption of the business shares by the company itself. With SzTA, on the other hand, original shareholders and the company itself enjoys preferential treatment in the case of an investor buyout. ■

08 1 News BBJ

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Budapest Business Journal | Feb 22 – March 07

From net nomads to serious firm Policy Solutions, founded in 2008, is still a newcomer on the political research and consultancy scene, but is already gaining fame and market share where older rivals are turning into the red. We talked with Tamás Boros, political analyst and director of Policy Solutions about the beginnings, becoming a “serious firm” and, of course, about the three elections of 2014.

WE DIFFERENTIATE VERY CLEARLY TO OUR CUSTOMERS THE ANALYTICAL AND ADVISORY WORK. OUR ANALYSES ARE FOR THE PUBLIC, FREELY AVAILABLE TO ANYONE AND ABSOLUTELY INDEPENDENT OF ANY COMPANY, POLITICAL PARTY OR THE STATE.

BBJ KRISZTIÁN KUMMER

Q: Policy Solutions has been founded by two men: András Bíró Nagy and you. It must have taken courage to enter a market where many firms were already present, some of them with significant political tailwinds and funds.

A: Well, we had both worked abroad before, we both came back to Hungary at the same time and we both thought that we wanted to capitalize on our acquired experiences in Hungary. When we were looking around, we couldn’t find any institute in Hungary where high professional knowledge and good communication requirements were met. There are several institutes with academic level knowledge that are able to make deep, professional and thorough analyses, but neither multinational nor domestic firms nor politicians can utilize them. On the other side of the market there are mainly PR agencies, which are very good at understanding the language of politicians or enterprises, but lack the necessary professional background.

What we mainly wanted to do was to combine these two factors together. In the beginning, we started to work with only one politician and one civil sector client; after a little while, they both indicated they wanted a long-term cooperation with us and we became an “institute”.

We started with two laptops and word of mouth advertizing who we are, and what we do.

In a year and a half, we became a small enterprise with an office, five analysts and all the services we offer actually: political analysis and forecast, consulting, communication, opinion polls, speech writing and public affairs. We also work together with a series of external experts on specific policies and issues. This allows us to stay flexible but work effectively. We have transformed from original net nomads into a serious firm.

Q: Policy Solutions and its analyses appear ever more often in the mainstream media. Is this a side effect of your work or dedicated image building?

A: Well, we spent the first two years as consultants to state actors, non-governmental institutions, companies making policy and policy communication analyses, forecasts, etc. In the last two years we tried to approach the media a little more.

We started to build our non-profit branches and publish papers on topics and issues that are important to us. For example, the shortening of the period of availability of unemployment benefits a few years ago didn’t affect companies directly, but it affects Hungarian society and the

CURRICULUM VITAE Tamás Boros is political analyst, co-director of Policy Solutions. Previously, he worked as a specialist in European affairs and communications for the European Commission and the Hungarian Ministry of Foreign Affairs. He had also served as the director of a non-profit organization, Pillar Foundation, for four years. Boros was awarded the “Young European of the Year” prize for his work by the Schwarzkopf Foundation, Germany. He studied International Relations and European Political Analysis at Corvinus University of Budapest. Boros speaks English, French and Hungarian. economy seriously overall, so it was important to us to write and publish a research document.

Q: And it was also beneficial from a marketing and PR point of view, I think.

A: Yes, but as far as I can see, clients still come to us based on our products, not on our media presence.

Q: Talking about clients, were your services created based on customer demand or were they your own offerings?

A: Both. An example of the latter is the daily trend monitoring, which was created specially for politicians. If you are not following a sufficiently wide spectrum of media, you might have a distorted image of public opinion – that’s where our services could provide help. On the other hand, we started to follow changes in energy policy issues specifically on customers’ requests.

Q: Political research institutes and think tanks in Brussels were sharply criticized a few months ago for using EU funds to prepare “independent” working papers. How can you remain independent while working for state actors?

A: We differentiate very clearly to our customers the analytical and advisory work. Our analyses are for the public, freely available to anyone and absolutely independent of any company, political party or the state. On the other hand, advisory papers are made upon clients’ demands. We do not consider ourselves absolutely independent of values or sides, but that can only appear at an advisory level. So far, this rule has never caused a conflict.

Research institutes and think tanks usually declare their editorial independence, i.e., the sources they use don’t affect the resulting material. Of course, it’s a big question how far this is realized in practice.

Q: Your company started very dynamically with a wide range of services and products offered. Which way will you go in the future?

A: One of the paths we want to follow is training It is a fact that Hungary was totally unprepared for the appearance of political extremism. How should the media handle extremist events? Transmit it because it’s important, do not transmit because it’s extremist, need to comment, do not need to comment, etc. There is no training in Hungary for that, so we started one to present

how similar events are published in the English, French, German media.

Also, we want to start a specific service for foreign businessmen working here in Hungary, to help them to keep up with the fast-changing political scene with personal consultation and monthly political forecasts.

Q: We still have got more than a year until the parliamentary elections, but betting on the likely outcome has already started. How do you see events?

A: Basically there are two core events that might influence the outcome of the elections. First is the excessive deficit procedure (EDP) Brussels has driven on us. The Orbán government intends to introduce a number of measures that can significantly increase their popularity, like growing wages and reducing household overheads.

However, their introduction is not depending on political will, but on a decision from Brussels, if they drop the EDP or not. Will there be enough room for an ‘election budget’ or not? So far, the communication of the government shows that if we are released from the EDP, the 2013 budget won’t be as tight as the currently valid one. Just think about the idea of the additional 13th month of pension payment.

Another important issue is how the almost 20 small opposition blocs and parties will manage to work together and which two or three parties will grow big enough to stand and fight Fidesz. The question is whether there will be a big socialist party with smaller satellite parties around it, or whether one or more of the smaller parties manage somehow to strengthen and become an equal partner of the MSzP. These smaller groups are not expected to fight Fidesz until the end of summer, but each of them, like all the participants, are trying to rally as many followers as they can before sitting down to negotiate the fundamentals of a cooperation.

These two events must take place before the end of summer, and after that it is likely we will be able to speculate on the election results with a good chance of getting the result right.

Q: What do you feel is the likelihood of sanctions (such the EDP) from Brussels in an attempt to indirectly influence the actions of Fidesz and the results of the elections?

A: The IMF/EU loan agreement failed on one hand due to the resistance of the Orbán government but also due to the stance of the EU, which is trying to prod Hungary to stick to the traditional democratic rules of a legal framework. It is no coincidence that the Hungarian government turned to Russia and the Far East for financial support.

During the EDP, the EU investigates both the extent of measures to comply with EU regulations, and the sustainability of them. In the latter, there is room to maneuver. Although the Commission had so much conflict with Hungary that it may seem to be in its interest not to release us from EDP, do not forget that Prime Minister Viktor Orbán and the President of the European Commission, José Manuel Barroso, are both members of the European People’s Party. However, Hungary’s reputation is very poor from the point of view of the Commissioners. So, if Hungary wants to confront the European Union at all costs, Brussels is able to harden itself as well. ■

1 NewsTrends 09

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Budapest Business Journal | Feb 22 – March 07

GDP nosedive

Virus spreaders

Work with distractions

Economy sinks into heavier recession than anticipated

Most attacks caused by ignoring updates

Work in cafés is popular but ineffective in the long run

1.7%

18.07%

ECONOMIC CONTRACTION IN 2012

Top 10 most common computer infectants 1. INF/Autorun virus 2. HTML/Iframe.B.Gen virus 3. HTML/ScrInject.B trojan 4. Win32/Qhost trojan 5. Win32/Sality virus 6. Win32/Conficker worm 7. Win32/Ramnit virus 8. Win32/Dorkbot worm 9. JS/TrojanDownloader.Iframe.NKE trojan 10. Win32/Sirefef trojan

Source: KSH

Source: Eset

SAY THEY ARE DISTURBED BY NOISY PATRONS

Going away from home but not having to endure the confines of a regular office is a common preference for people who only need a laptop and/or a telephone to do their jobs. Cafés and eateries are the most widely favored venues, but despite their trendy feel, it seems that a public place may not be the best work environment.

The appeal of “coffee shop working” is fairly obvious and undeniable, according to research conducted by flexible workplace solutions provider Regus. The surroundings are pleasant, there is usually free Wi-Fi and of course, a wide range of coffee and snacks to choose from.

Still, the survey conducted in 90 countries with the participation of 26,000 people found that such settings aren’t appropriate for handling business for a longer period of time.

Hungarian respondents in the survey were most concerned about protecting information contained in documents used or spoken about during negotiations, a concern shared by 72% of the local sample. Some 70% of them also worry about protecting their items, while 67% of them complained about being distracted by the noise from other patrons’ conversations.

Other disadvantages listed by respondents who argued against coffee shop working included the absence of office equipment such as a scanner or a printer, while the majority agreed that cafés aren’t the proper venue to hold business negotiations.

The survey found a divide between how different age groups perceive the benefits and disadvantages of coffee shop work. The older respondents, born in the ’50s and ’60s, were more likely to reject cafés as a good venue for work than their younger counterparts, who were born in the ’70s and ’80s. BBJ

The same widespread viruses still cause the majority of computer attacks worldwide, a regular survey by antivirus software maker Eset has found. And while there has been little change in the list of viruses in circulation, there has unfortunately also been limited improvement in the reasons why they are able to spread in the first place: the users.

Eset found that the spread of the same viruses is mostly due to negligence or carelessness. The INF/Autorun virus has now topped the list of most widespread viruses for nine straight months. Eset notes that Microsoft has taken steps to address the situation, but users who forego installing the available updates remain vulnerable and, judging by the prevalence of malicious code, that is often the case.

In fact most viruses still expose various vulnerabilities that have been around for some two years.

However, the most common cause for the proliferation of harmful code is still a lack of circumspection from users. It is still very common that the recipients of letters from unknown senders that should be suspicious are opened, voluntarily exposing computers to attacks.

Eset notes that it is still typical that computer users are not familiar with the spread of the numerous attacks, scams and hoaxes that are circulating. It cites a hoax arriving through an email with the subject ‘Simon Ashton a Hacker’ as something users still tend to not only to open but actually forward to others, allowing the proven misinformation to survive even after two years.

It advises users to handle unsolicited incoming mail, which usually contains warnings or notifications about various raffle offers, with caution. It’s best to delete them unread. BBJ

Even pessimistic analysts were shocked to learn the full extent of the slump Hungary’s economy produced in the fourth quarter of 2012. Despite a general expectation of a 2% of gross domestic product contraction, the slump came in at a whopping 2.7%, according to preliminary figures published by the Central Statistics Office (KSH). The result confirms that last year ended in recession, with a contraction of 1.7%.

“With this result we have practically canceled out the economic growth seen since the drastic economic slump of 2009,” István Horváth, investment director at fund manager K&H Alapkezelő, said in a comment.

The National Economy Ministry blamed an unusually harsh drought which alone led to GDP shrinking by 1% through damage to the agricultural sector, compounded by the prolonged euro zone crisis and setbacks for Hungary’s trade partners, which weighed heavily on exports and industrial production.

It cited government achievements such as keeping the budget deficit under control and increasing the number of active participants on the labor market and expressed confidence that 2013 will provide a rebound.

The bigger-than-expected drop in performance is also set to impact monetary policy, since rate-setters will likely be all the more anxious to continue with the cutting cycle commenced last year, taking the indicator to 5.5% in January from a starting point of 7% that had been in effect since late 2011.

“Growth expectations for 2013 are around 0.5%, but the recession could continue in the first half of the year which strengthens the possibility of further rate cuts in the coming months,” Horváth said, while expressing cautious optimism on the future recovery of the euro zone as well as the arrival of new automotive production capacities. BBJ

Changes in Hungary’s GDP

67%

OF ALL COMPUTER INFECTIONS CAUSED BY 10 VIRUSES

Main setbacks of working at cafes - % agreeing

72 70 67 Protecting confidential documents and information

Source: Regus

Minding personal belongings

Distracting niose from fellow patrons

2 Business

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Enterprise

Virtual business still means real profit It is easy to assume that the crisis knows no exceptions, but it is difficult to ignore that some sectors were hurt more than others.

Those that were best off were the ones built on cost savings: using better or cheaper technology, more streamlined processes, savings on real estate and labor costs. Like, for example building a webstore instead of running a bricks and mortar version in the real world.

BBJ ZSOLT BALLA

“Please raise your hand if there’s a free seat next to you,” the lecturer asks: the mid-sized conference room in the office building of a Buda shopping mall is packed well before the beginning of the presentation. Although it’s a registration-only event, those arriving late will have a hard time finding a place to sit down. The presenter, István Róbert Kulcsár, a dynamic man in his early 30s, is about to begin his speech on something every entrepreneur or wannabe entrepreneur longs to know: how to build and run a successful webstore on the Hungarian market.

“Of the 5.4 million Hungarians with Internet access, some 92% say that they research the web before making shopping decisions, and 36% claim that they have already spent money online,” Kulcsár begins. He represents Webshop Experts, a company that sells and leases e-commerce solutions to clients, but he doesn’t need to be too pushy. It seems as though the figures and trends do all the hard work for him. “Please raise your hand if you have a webstore or if you want to open one in the coming year?” he asks the audience. I am practically the only one in the room who keeps my hand down.

AVERAGE VALUE PER TRANSACTION

STILL ON THE WAY UP In a shrinking economy this hype should be of no surprise. From an aggregate turnover of HUF 155 billion in 2011, the Hungarian e-commerce sector grew to HUF 180 bln in 2012, and 2013 projections are in the neighborhood of HUF 210 – 220 bln.

Industry experts expect that some 50% of the estimated growth of HUF 30 bln this

year will come from newcomers; in other words, from people like those sitting in the room, aiming to take their fair share of the e-commerce booty.

To gain a little broader perspective, the current figure roughly equals 2.4% of Hungary’s retail volume. Take a look at a more advanced market, the UK, and you’ll see that e-commerce’s current share is around

WEBSTORE TECHNOLOGY CHANGING The dotcom bubble of the early 2000s clearly showed that the laws of the real-world economy also applied to online market players. But due to various attributes, and particularly to the pace of technological developments, virtual stores still have slightly different paths than brick and mortar businesses.

Payment methods are a good indicator of how much customers trust an online business, and also of how virtual they are willing to go when making shopping decisions online. Looking at the Hungarian market figures, we might conclude: not too much. Collect on delivery is by far the predominant payment form used in the Hungarian e-commerce scene. Even if you take out food delivery (which almost exclusively relies on c.o.d. via cash or vouchers), this payment form is responsible for 91% of total online spending (73% by cash and 18% by bank cards swiped at the time of delivery). Other payment forms include bank wires (4%); use of bankcards online (4%), with all others, including PayPal and other third party services totaling just 1%.

All seem almost insignificant compared to the old fashioned “I’ll pay for it when I have it in my hands” attitude.

Based on the above figures, one could argue that the costs of maintaining a P.O.S. terminal and accepting a bankcard online are almost not worth it for the owners of online businesses, but there are a few factors that suggest otherwise. For one, the logos of wellknown banks and bankcards on a webstore’s checkout pages clearly increase the shop’s reputation and credibility. And also, transactions via bankcard carry a slightly higher average value (approximately HUF 9,000) than traditional c.o.d. purchases (HUF 7,700).

CLOUDS PROVIDE A CLEARER PERSPECTIVE As technologies change rather frequently, a major challenge in running a webstore is keeping the application up to date. To tackle this issue, more shop owners are deciding to replace their standalone applications and use cloud-based SaaS solutions instead like Webshopexperts’ product, ShopRenter.

All three major webstore types have their pros and cons. Building and running a webstore based on an open source application requires significant technical knowledge, and a massive amount of time, but keeps costs low. Purchasing a premium application still requires some knowledge for customization and maintenance tasks, although these are usually more user-friendly and less time consuming means of developments. Renting an online store from an SaaS provider is generally the best compromise between saving time and money for those who don’t have the sufficient technical skills to build everything for themselves – but it has its downside of limited customization options, and standardized functionality.

On the other hand, the maintenance costs of cloud-based solutions are usually very affordable, and include continuous updates, ensuring that the store always uses the latest technology available.

All in all, while opening a webstore is still significantly cheaper than opening one in the real world, the limited technical knowledge of would-be shop owners and the relatively low cost barriers both fuel a tendency towards e-commerce solutions going in the direction of the cloud.

2 Business 11

BBJ

SOCIAL MEDIA WEBSITES USED BY WEBSTORES (%)

12%, a number that is expected to increase to around 23-25% by 2020. This, more or less determines the trends of the Hungarian market as well. And, as if it wasn’t enough, it is important to highlight that the above numbers only cover B2C commerce. Both B2B and C2C volumes are estimated to be much larger than that – although these are much more difficult to measure as certain areas will necessarily remain hidden.

Professionals say that there are three distinct types of markets. First, the well established markets, which are already highly competitive. Examples would be books, home entertainment, computers, and even sex toys. Then there are the markets that are currently on the rise – mainly because traditional retailers have been forced to adjust their profiles to the post-crisis environment, like the construction indus-

try. And finally there are the white spots and market niches that are currently nonexistent: if someone manages to find an untapped area, the Internet can still turn into the goldmine it used to be.

PAYMENTS ARE FROM REAL WORLD The vast majority of current e-commerce volume comes from the “traditional” industries. More than half of the aggregate volume is generated by food sales – most prominently food delivery: behind

that comes computer electronics, home entertainment and books. Somewhat different from the above, but an area clearly on the rise, is apparel and clothing. While the book or electronic markets operate with standard products, meaning there won’t be too much difference between the selections of any two online bookstores, fashion stores usually offer unique products making it easier for newcomers to avoid competition with well-established giants, who dominate the market. ■

AVERAGE CONVERSION RATE PER SECTOR (%)

BANNER AFFILIATE NEWSLETTER COUPON SOCIAL MEDIA PAID ADS PRICE COMPARISON SITES SEO

2,15 2,41 2,81 2,73 2,96 3,29 3,31 4,00

Source to all charts: GKI eNet / Webshopexperts Kft.

PERCEIVED EFFICIENCY OF MARKETING TOOLS (ON A SCALE OF 1-5)

2 Business

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Trainers giving clients the full package A handful of coaching tools

14 17

SpecialReport

A good talent will make a profit Companies holding on to their workforce and talent are not doing so out of generosity – they plan to capitalize on the human resources they have.

BBJ ZSÓFIA VÉGH

While most governments are toiling over how to create jobs to give the economy some momentum, the local governments of some U.S. states reward retention rather than creation. A federal program provides cash for struggling companies to keep workers employed, writes Bloomberg Businessweek.

They may cut their hours and sometimes their wages, but they will keep the workforce numbers up until the economy turns.

So-called work share schemes are not new of course – in Europe it has been applied since the 1920s. Known as Kurzarbeit (short work) in Germany, the temporary reduction of normal working hours in a company has helped save hundreds of thousands of full-time posts in the country. Lower wages resulting from shorter work have been complemented from federal funds. Compensation under Kurzarbeit arrangements was originally limited to six months but the government has now extended it for up to a two-year period. Companies that used this opportunity include automaker Opel and technology and machinery maker Bosch.

The new Hungarian Labor Code also now knows job sharing, although the introduction of this form of employment is entirely due to the crisis. Job sharing allows for one employer to contract with multiple employees who perform the same task for the employer. Their work schedule is completely flexible and works best for less complex, more routine and repetitive jobs, where employees are easily interchangeable, like a receptionist or a typist.

KEEP HOLD OF YOUR TALENT!

Retaining employees is a smart move to avoid lengthy and costly re-hiring in the future.

Retaining the best employees is also an investment. In sectors where there are many candidates for a post, it may not be so important.

But professionals like IT specialists or engineers are worth holding on to. Talent management has various forms from training to incentives to bonuses – all with the overall aim of finding an edge over rival companies. Wells Fargo, the fourth largest bank in the United States by assets, runs early talent programs for career starters. During the WBR Analyst pro-

gram, fresh graduates are placed in full-time positions for ten months. They get an insight into many of the business processes on the job, develop their functional roles, explore volunteerism and are assessed monthly one-on-one by program mentors.

IBM has found another way to cherish talents. Instead of hiring coaches to hold, say language classes, the IT giant encourages their own people to do it. Why not, indeed?

IBM’s shared service center in Budapest has staff speaking the weirdest combination of languages, such as Dutch and Portuguese or Hebrew and French. People who have some affinity towards training their co-workers can do so. Once they get approval from the relevant department, they can hold classes in their work time. There are no restrictions as

to what to lecture on; employees with some entrepreneurial spirit can pitch their ideas to the HR department for revision. This policy also helps develop employees who, by being given more responsibility, feel more valued by their employer and are probably willing to work harder.

A few years ago Magyar Posta, the national postal service, built a talent bank and followed the progress of some 20 employees for a set period. The company had a separate talent pool for likely candidates for management and leadership positions.

HANDLE IT WITH CARE

A good leader knows how to manage, delegate and also how to take criticism. Dealing with peer and subordinate review is part of

the job description at any multinational firm with a developed corporate policy. So-called 360s, forms designed for worker assessment, are now standbys at most big firms. True to their title, they allow for a full-assessment – that is peers, subordinates and superiors all appraise a person.

Hays Hungary, the local unit of the global recruitment specialist, has several tools for worker assessment, including one called Talk Back. At KPMG Hungary, employees can use a mailbox to submit their opinions of their co-workers. Most of these anonymous tests are standardized to make the tracking progress easy. Yet some skills are hard to standardize and, depending on who reviews whom, the results can be completely different. ■

2 BusinessSpecialReport 13

BBJ

WWW.BBJ.HU

Budapest Business Journal | Feb 22 – March 07

[ EXPERT OPINION ]

When coaching is not the answer As a professional coach, I am the first to tout the benefits of coaching. I have seen the positive impact of coaching on my clients, the people they manage, and their organizations (and their families). I have also personally benefited from being on the receiving end of coaching. Several studies have shown that coaching can enhance staff engagement, reduce staff turnover, increase client satisfaction, improve the bottom line – and the list goes on.

Yet coaching is no silver bullet. It is not always the correct answer to any question having to do with helping managers identify and overcome the hurdles that prevent them from excelling at their jobs.

How do you know when someone is uncoachable? How do you detect a lost cause? The good news is that the uncoachable situations are easier to spot than you think. It helps to know that managers typically struggle because one of three things is in their way: SKILLS AND KNOWLEDGE They currently lack the skill or ability to complete the task at hand; this relates to aptitude.

LACK OF KNOWLEDGE. If you think someone is in need of coaching, ask yourself if the issue at hand is related to his lack of knowledge, skills, or abilities in a certain area. If he needs to develop specific skills and abilities, coaching is not the answer. If he doesn’t know how to build a budget, he needs training, not coaching. Trying to coach someone around a skill they lack is an exercise in frustration for everyone involved; you would end up driving yourself crazy and the coachee out the door.

NEW TO MANAGEMENT. Do not coach a manager if the situation is totally new and he is truly out of his depth. If he has never experienced the situation before, you will be in for a long and drawn out conversation.

For example, would you coach a new manager on Performance Appraisal procedure if he has never done performance evaluation?

No, you’d probably give him the appropriate training and guidance or orientation first.

Once he is trained, then he can be effectively coached to recall, consider, remember, and work out answers to problems based on what he now knows.

THEMSELVES They currently lack the motivation, focus, confidence, or commitment to complete the task at hand; this relates to attitude.

DOESN’T THINK HE/SHE HAS A PROBLEM. Coaching is based on trust and the coachee’s openness to reflect on his own actions and attitudes, which may be hindering his success. It won’t be effective if you just launch

into a coaching conversation – you need to secure agreement by asking, “Would you like to spend some time talking through some ideas?” or “Do you want to talk more about this and figure out a solution?” If he or she doesn’t perceive a problem, no matter how much, how hard, or how diligently they are coached, they are not going to change.

They are suncoachable because they do not want to change or do not believe that they need to change.

THINKS EVERYONE ELSE IS THE PROBLEM. Once, I had a client who was concerned about employee morale. His people liked the work, but feedback said that he played favorites in the way he compensated people. When I reported this feedback to him, he agreed with the charge and thought he was right to do so.

He hadn’t called me in to help him change; he wanted me to fix his employees. It was high time to find the nearest exit. It’s impossible to fix people who think something or someone else needs to change before they do.

IS PURSUING THE WRONG STRATEGY FOR THE ORGANIZATION. If a manager is already going in the wrong direction, all you’re going to do with coaching is help him or her get there faster.

IS IN THE WRONG JOB. Sometimes managers are offered coaching when it’s clear that no matter what you do there’s one thing only they can change: how they feel about their job. If it’s not a good fit, no amount of coaching will improve the situation. Here’s a good way to determine if you’re faced with one of these people.

Ask them, “If we shut down the company today, would you be relieved, surprised, or sad?” If you hear ‘relieved,’ send the manager packing. You can’t change the behavior of unhappy people so that they become happy. You can only fix behavior that’s making people around them unhappy.

EXPECTS YOU TO TELL HIM WHAT TO DO. Much as we would like to be, coaches are not knights in shining armor arriving just in time on a white charger! Anyone who wants to be rescued from his or her situation by a coach is probably not going to make much progress with coaching. When a manager expects answers from a coach, please resist.

MY SUGGESTION IN CASES LIKE THESE: FOR COACHES: SAVE TIME, SKIP THE HEROIC MEASURES, AND MOVE ON. THESE ARE SITUATIONS IN WHICH YOU CAN’T EVER WIN. FOR HR: ASK YOURSELF THESE QUESTIONS Is this about aptitude? Is there a lack of skills or ability getting in the way of success? If the answer is “yes,” then your answer is “no” to coaching.

Is this about attitude — the manager’s confidence, commitment, enthusiasm, focus, and frustration? If the answer is “yes,” then you have a situation that is primed for coaching.

Is this is about an outside factor getting in the way of success? If the answer to this question is “no,” you need to reevaluate the answers to all three questions because, chances are, you’ve missed something along the way. If the answer is “yes,” you have two more questions to ask yourself: Does the manager have the skills and abilities to effectively deal with the outside factors in order to be successful?

Does the manager have difficulty dealing effectively with the outside factors despite having the skills?

If the manager needs skills, teach, if the manager needs help with attitude, coach, but be prepared to offer suggestions and teaching tips along the way — dealing with outside factors can be tricky and there may be some skills you can teach as you go.

If he or she gets the answer, the coach will be in charge instead of the manager, and if the manager fails the coach will be responsible.

OUTSIDE FACTORS They are currently being affected by things that are largely outside their control, such as not having the available resources, changing market conditions, or lack of time.

LACK OF RESOURCES. Are external factors keeping the manager from succeeding?

Perhaps the problem is a shortage of staff, tight budgets, or – ahem! – lack of direction from higher up. If this is the case, coaching him is not going to help.

Dr. Róbert Dobay, CEO, Menedzsmentor Coach, change manager, author of the Menedzsmentor blog: blog.menedzsmentor.com dobay.robert@menedzsmentor.com, www.menedzsmentor.com

LACK OF TIME. If the coachee is overwhelmed, running in and out, or is late to meetings, it’s not the time to start coaching. A manager is uncoachable if he or she thinks it’s not the right time. This is also true if the results you need are urgent or you are faced with emergencies; when you have to act fast take a different route than coaching. There are times when direct orders are appropriate. If you offer coaching to a manager, and then become frustrated with the process and start telling that manager what to do, you will have done more harm than good – particularly in terms of your relationship with the manager.

14 2 BusinessPartnerWatch BBJ

WWW.BBJ.HU

Budapest Business Journal | Feb 22 – March 07

Training companies Ranked by net revenue from corporate training TRAINING LANGUAGE

www.flowcsoport.hu

3

4

www.develor.hu www.develor.com

–

GROW CSOPORT

433

433

7000

»

Philip Morris, T-Systems, BT, CIB Bank, Generali, MVM

–

www.grow.hu

IMPROVERS GROUP (SÄMLING - FRANKLINCOVEY CÉGCSOPORT)

2900

20 (with exclusive contract)

UniCredit Zrt, PricewaterhouseCoopers, Citibank Zrt, Microsoft, Auchan, Teva Zrt

»

Continental Temic Hungary Kft, Magyar Posta Zrt, Mol Nyrt, GE Hungary

410

469

www.improversgroup.hu

5

CONCORDIA SZERVEZET- ÉS VEZETÉSFEJLESZTÉSI KFT

228

228

www.concordia-od.hu

»

–

–

–

–

–

Lean management

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

(100) –

Gábor Zsikla, Kalmár Péter, Ákos Zala – –

1146 Budapest, Zichy Géza utca 5.

(1) 422-1714 (1) 343-0003 flow@flowcsoport.hu

Individuals (100) –

Csaba Szabó Erika Víghné Kukumberg Gábor Stremeny

1074 Budapest, Rákóczi út 70–72.

(1) 413-7990 (1) 321-0413 info@develor.com

» »

Viktor Lénárt – –

1037 Budapest, Montevideo utca 2/C (1) 487-9090 (1) 487-9099 office@grow.hu

–

(90) (10)

István Ecsédi Ágnes Orbán –

1124 Budapest, Németvölgyi út 64.

(1) 212-4412 (1) 212-5071 info@improversgroup.hu

–

(100) –

Balázs Kosztra, Tamás Szilágyi Andrea Somogyi Dávid Lövey

1037 Budapest, Erdőalja út 145.

(1) 240-4606 (1) 240-4473 concordia@ concordia-od.hu

FRENCH

GERMAN

Alcoa Köfém Kft, Vodafone, Unicredit Bank, Mátrai Erőmű, ELMŰÉMÁSZ, OBI

HUNGARIAN

28

ENGLISH

4900

OTHER

446

STRESS MANAGEMENT

446

DEVELOR TANÁCSADÓ ZRT 2

COACHING

Operational development

PROJECT MANAGEMENT

ORGANIZATIONAL DEVELOPMENT

Magyar Telekom, DHL, Raiffeisen Bank, Nestlé Hungária, UPC Magyarország, Siemens

CHANGE MANAGEMENT

40

COMMUNICATION

3000

SALES TRAINING

641

NEGOTIATIONS TECHNIQUE

623

TEAM BUILDING

MAIN CLIENTS IN 2012

LEADERSHIPSKILLS DEVELOPMENT

NO. OF FULL-TIME TRAINERS ON JANUARY 1, 2013, HUNGARIAN

FLOW CONSULTING KFT

NO. OF PARTICIPANTS IN 2012

1

TOTAL NET REVENUE (HUF MLN) IN 2012 [1]

COMPANY WEBSITE

NET REVENUE FROM CORPORATE TRAINING (HUF MLN) IN 2012[1]

RANK

AREAS OF TRAINING

–

Trainers giving clients the full package Businesses cut back on their training budgets in the heat of the crisis, axing it as something they couldn’t afford to spend any money on. Training services providers say that now, with an upswing imminent, they can’t afford not to.

BBJ GERGŐ RÁCZ

When the economic crisis peaked and the core imperative for every business was reducing costs and maximizing efficiency, training budgets were among the first to go, perceived as dispensable spending items in the struggle for survival. But with markets having (hopefully) now sunk as low as they can get, a different approach is needed.

“There is no more room for cutbacks. Any company with a chance of success has already implemented all the measures aimed at reducing costs and streamlining in 2009, or by 2011 at the latest. If a company’s strategy as late as 2013 still focuses just on cost cutting, I don’t think it can be successful,” says Gábor Zsikla, managing director of Flow Csoport.

Instead of slashing any and all non-essential expenses, trainers say that companies with

a considered approach and vision are seeking a newer, more comprehensive set of services.

“Clients are looking to buy in bulk, every part of the complex package from a single source, one that is adaptive and ready to work in unison with the clients’ own experts,” says

Gábor Oláh, a partner at Concordia.

Both agree that the more important clients can’t necessarily be identified based on nationality or even their respective industries, but rather those that are looking for a solid business strategy for a longer period of time, one

that necessitates the introduction of new practices or cultures.

Zsikla offers size as a clearer differentiator among clients, stating that bigger firms, those with 500-1,000 employees can’t afford not to finance training.

Despite the positive expectations for the future, Zsikla says that the market has indeed suffered in recent years, with several competitors folding, and consolidation on the market is set to continue this year.

“There is indeed competition in terms of price on the market, but there is a level below which a job isn’t worth doing and we tend to keep our price as the quality of our job is high and increases day by day,” Oláh adds, noting that companies providing training services follow one another’s activities closely and are also involved in an umbrella group for the sector.

For 2013, Zsikla envisions growth of 5-10%, while Oláh opts for a more optimistic 10-15% range, based on the expected availability of larger tender openings during the year.

“We have seen among our clients that those who have a clear perspective for the longerterm – those that think up to five years ahead – have realized that they cannot afford to neglect training for their staff, since they realize that this is the key to their future success.

This is what I see as the fundament of a positive trend,” Zsikla says. ■

2 BusinessPartnerWatch 15

BBJ

WWW.BBJ.HU

Budapest Business Journal | Feb 22 – March 07

OD PARTNER SZERVEZETÉS VEZETÉSFEJLESZTŐ KFT

150

165

3300

8

9

KPMG AKADÉMIA KFT[2] www.kpmgakademia.hu

WIFI HUNGÁRIA OKTATÓ ÉS TOVÁBBKÉPZŐ INTÉZET KFT

137

134

137

134

1036

2091

DEMMLER AND TÓTH KFT www.demmler.hu

CEGOS TANÁCSADÓ 12 ÉS TRÉNING KFT

SZINERGIA PROJEKT-, MŰKÖDÉS- ÉS 15 VÁLTOZÁSMENEDZSMENT KFT

FRENCH

ENGLISH

GERMAN

OTHER

STRESS MANAGEMENT

COACHING

–

–

KPMG Hungária Kft (96.67), KPMG Tanácsadó Kft (3.33) –

János Tomka – –

1139 Budapest, Váci út 99.

(1) 887-6646 (1) 887-6531 academy@kpmg.hu

–

– IP Group Beteiligungs-GmbH (100)

Beáta Földváry – –

1062 Budapest, Bajza utca 24..

(1) 488-0880 (1) 488-0881 info@wifi.hu

Attila Merényi Attila Merényi Attila Merényi

1133 Budapest, Bessenyei utca 14.

(1) 336-0016 (1) 336-0017 training@merenyi.hu

NTR training, IT, other vocational training, finance and insurance agency official training, procurement, assistant and customer service, ECO-C - European Communication Certificate

1013 Budapest, Krisztina körút 41–43.

(1) 319-1938 (1) 319-2671 training@cegos.hu

7

5

Bosch, Claas, Henkel, Mars, Exxon, Szatmár Optika

1100

–

István Boros – –

ExxonMobil Üzletsegítő Központ Magyarország, BP Business Service Centre, Orex Óra-Ékszer Kereskedőház, Telenor Magyarország, Magyar Telekom, Porsche Hungária

159

1037 Budapest, Bécsi út 81.

(1) 437-0830 (1) 250-3389 iroda@demmler.hu

»

82

–

Walter Demmler, Tamás Gábor Tóth – –

PROFIL TRAINING TANÁCSADÓ KFT www.profiltraining.hu, www.mqprofil.com, www.profilsurvey.com

–

Demmler és Társa Kft (60), Tamás Gábor Tóth (20) Walter Demmler (20)

BorsodChem, MVM, Celanese, Soletanche, Givaudan, Oracle

1000

–

–

MVM Partner Zrt, Patika Profi Kft, DHK Hátralékkezelő és Pénzügyi Szolgáltató Kft

83

–

»

83

–

–

708

www.chefparade.hu

14

1145 Budapest, Columbus utca 47.

(1) 209-2043 (1) 209-2043 office@odpartner.hu

142

5500

Péter Fejér – –

Péter Fejér (34.83), Csaba Császár (34.83), Attila Bokor (19.83), Anita Frisch (10.51) –

–

101

230

1033 Budapest, Szentendrei út 89–95.

(1) 9201-201 (1) 9201-210 info@adsidera.hu

–

7

87

Ferenc Árik – Antal Pintér

1786

www.cegos.hu

CHEF-PARADE KERESKEDELMI 13 ÉS SZOLGÁLTATÓ KFT

Domestic individuals (100) –

–

113

»

–

113

90

ADDRESS PHONE FAX EMAIL

» »

MKB Bank, Citibank, K&H bank, SPAR, Nestlé, Hervis

90

–

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

»

www.merenyi.hu

11

–

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

Nalco Hungary Kft, Siemens Group, Bosch Group, Baumax, Citibank Europe plc. Hungarian Branch Office, Fővárosi Csatornázási Művek Zrt

www.wifi.hu

MERÉNYI & TÁRSAI TRAINING 10 ÉS CONSULTING KFT

PROJECT MANAGEMENT

ORGANIZATIONAL DEVELOPMENT

20

KPMG, LogMeIn Kft, Diageo Üzletviteli Szolgáltatások Kft, MVM Paksi Atomerőmű Zrt, Raiffeisen Bank Zrt, Microsoft Magyarország Kft

CHANGE MANAGEMENT

www.odpartner.hu

COMMUNICATION

10

Magyar Telekom Nyrt, T-Systems Magyarország Zrt, Richter Gedeon Nyrt, GlaxoSmithKline Kft, Erste Bank Hungary Zrt, MOL Magyar Olaj és Gázipari Nyrt

SALES TRAINING

»

OTP Bank Nyrt, Magyar Telekom Nyrt, MARS Kisállateledel Gyártó Kft, Unilever, Citibank, BP, BSC

NEGOTIATIONS TECHNIQUE

5800

TEAM BUILDING

192

MAIN CLIENTS IN 2012

LEADERSHIPSKILLS DEVELOPMENT

192

NO. OF FULL-TIME TRAINERS ON JANUARY 1, 2013, HUNGARIAN

7

www.adsidera.hu

NO. OF PARTICIPANTS IN 2012

AD SIDERA CSOPORT

TOTAL NET REVENUE (HUF MLN) IN 2012 [1]

6

NET REVENUE FROM CORPORATE TRAINING (HUF MLN) IN 2012[1]

RANK

COMPANY WEBSITE

HUNGARIAN

TRAINING LANGUAGE

AREAS OF TRAINING

10

»

–

K&H Bank Zrt, OTP Bank Nyrt, Auchan Magyarország Kft, evosoft Hungary Kft, Raiffeisen Bank Zrt, GDF SUEZ Energia Magyarország Zrt

4

E.ON, KPMG, Morgan Stanley, Tetra Pak, Nalco, Heineken

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Procurement, human resources, development of self-efficacy, trainer training, e-learning

–

István Boros (100) –

–

–

–

(100) –

László Kócsa – –

1094 Budapest, Páva utca 13.

(1) 210-6042 – info@chefparade.hu

–

Eszter Kovács (50) Zsuzsanna Szalay (50) –

Eszter Kovács, Zsuzsanna Szalay Martinovszky Anikó Gabriella Csaba

1112 Budapest, Rétkerülő út 9.

(1) 248-3200 (1) 248-3201 office@profiltraining.hu

–

István Havrancsik (72), Béla Czimbalmos (7), Tibor Eperjesi (7), Gábor Lipi (7), Stefanik Karolina (7) –

István Havrancsik – –

1025 Budapest, Törökvész út 33–37.

(1) 325-5762 (1) 325-5762 szinergia@szinergia.hu

–

Lászlóné Borsós Lászlóné Borsós, (55), Andrea Andrea Hargitai Hargitai (35), Károly – Szentmihályi (10) Andrea Hargitai –

MQ-Mental Development and Test Program

–

–

www.szinergia.hu

SKULL OKTATÓ 16 ÉS TANÁCSADÓ KFT

80

120

748

www.skull.hu

DRAMATRIX KFT 17 www.dramatrix.net

KRAUTHAMMER 18 MAGYARORSZÁG KFT

68

68

700

58

58

»

»

Morgan Stanley, Telenor Magyarország Zrt, K&H Bank, Eagle Ottawa, Fővárosi Gázművek Zrt, Generali-Providencia Biztosító Zrt

53

53

952

4

GLS, Nufarm, Opel, Mapei, Würth, Tilago, Cardex

www.krauthammer.hu

19

EMTREK KFT www.emtrek.hu

AQUILONE TRAINING 20 SZERVEZETFEJLESZTÉSI KFT

40

40

»

2

Vodafone, Harman, FCSM, Magyar Telekom, BOURNS Kft

»

168

250

3

Opel, Budapest Bank, Eckes Granini

www.aquilone.hu

NR

SENSA CONSULTING KFT www.sensa.hu

–

–

–

–

–

Presentation

Presentation, cooperation

–

–

–

–

–

–

–

Individuals (») Individuals (»)

John Cantwell Gabriella Kiss Orsolya Varga

1114 Budapest, Szabolcska Mihály utca 3. I. em.1.

(1) 365-1680 (1) 365-1681 info@dramatrix.hu

– Krauthammer Investment Holding (100)

Ágnes Galambos – –

1146 Budapest, Hermina út 17.

(1) 265-5040 (1) 220-2630 info.hungary@ krauthammer.com

–

László Árpádi (100) –

László Árpádi Ildikó Virág Krisztián Burgert

1112 Budapest, Budaörsi út 153.

(1) 279-5058 (1) 361-8181 emtrek@emtrek.hu

Zsuzsanna Toldi (50), Ákos Szörényi (50) –

Zsuzsanna Toldi – –

1145 Budapest, Amerikai út 76.

(20) 222-3112 (20) 222-3112 info@aquilone.hu

Individuals (100) –

Ferenc Makó Szilvia Béres István Kürti

1028 Budapest, Harmatcsepp utca 53.

(1) 391-6144 (1) 391-6145 info@sensa.hu

–

–

–

–

–

–

–

Energy management, personal branding, networking, efficiency measurement, facilitation, train the trainer

–

NOTES: (1) Financial data provided by the companies has been closed by accountants but not yet audited (2) Data of business year October 1, 2011 - September 30, 2012.

1037 Budapest, Montevideo utca 3/B II. floor (1) 430-2620 (1) 430-2629 skull@skull.hu

–

16 2 BusinessSpecialReport BBJ

WWW.BBJ.HU

Budapest Business Journal | Feb 22 – March 07

‘I love every bit of what I’m doing’ Coaching has become one of the buzzwords of organizational development in Hungary, still, there is roughly a 20-year lag, compared to the U.S. market, says Laura Komócsin, whose recently published English language book, Toolful Coach is about to break the ice bringing a Hungarian coach to the international scene.

BBJ ZSOLT BALLA

Q: IS COACHING STILL A PRIVILEGE OF TOP MANAGERS IN HUNGARY? A: Less and less so; although executive coaching is still something only top managers can afford, those leaders who go through a coaching process usually acknowledge its value and decide that other forms of coaching, most importantly business coaching and team coaching, could be useful for their teams, or for certain members of their teams. It is somewhat similar to company cars: only the top dogs will get the Audi A8, but others are still good enough to have a Ford Mondeo or its like. Which is exactly as it was designed to be.

Q: WHAT EXACTLY IS THE DIFFERENCE BETWEEN BUSINESS COACHING AND EXECUTIVE COACHING? A: Both of these are one-to-one processes, so the difference is mostly in the content, as top executives usually have very different challenges from “normal” managers. To be able to help in tackling these issues evidently requires different skills and experiences from the coaches themselves. Oh, and the pricing differs substantially, too.

Q: WHAT ARE THE RECENT TRENDS IN COACHING IN HUNGARY? A: Clients are becoming more open and coaching is becoming more accepted. At the same time, budgets are shrinking, just like everywhere else. As a result, the more affordable forms of coaching come into view, most importantly team coaching and project coaching. These are completely different from one-to-one coaching, but still very useful tools to improve a company’s efficiency. Based on U.S. examples, another coming trend might be remote coaching, for example via Skype, although Hungary is Budapest-centric enough to make it relatively easy for coach and coachee to meet in person. I do use Skype with a few international clients, who travel a lot, though.

Q: WHAT IS THE SINGLE MOST IMPORTANT SKILL A COACH MUST HAVE TO BE SUCCESSFUL WITH A CERTAIN CLIENT? A: What matters most is the chemistry between coach and coachee. This is why we always have a first, introductory session, that is free, and holds no obligation for either of them, and whose single goal is to determine whether the two can cooperate or not. Trust is of utmost importance.

We’ve heard about executives who insisted on the coach’s office being searched, looking for bugs.

In a case like this, a good solution is to ask the coachee to suggest a place for the sessions, where he feels completely safe. It can be a café, a restau-

rant, or anywhere else, even a park. The coachee must not feel that he is being spied on, or that his interests might be harmed in any way. If the coach has the coachee’s unconditional trust, she is almost halfway there.

Q: YOU ALMOST ALWAYS REFER TO COACHES AS WOMEN. DO YOU CONSIDER COACHING TO BE A FEMALE PROFESSION? A: Not necessarily, and I don’t want to be accused of gender talk. Still, there are things that need to be offset or counterbalanced. I recently attended a premiere for a book that collected 50 Hungarian business success stories. I was shocked to find out that not one of those 50 stories was about a woman – they were all men in that book! On the other hand, the first thing you know about a successful businessman is that a woman, who usually remains in the background, supports him.

She can be his wife, his mother, or more often than you would think, his coach.

Q: WHAT MAKES TOOLFUL COACH UNIQUE AMIDST THE GAZILLIONS OF BOOKS ON COACHING? A: As far as I’m concerned this is the only one that garners and explains 150 coaching tools and techniques. When I first talked about my plans to write a handbook like that, many thought that I was insane to give away all my experience, but I think that reading about these techniques, or even to have them collected for you, is very different from using them with your clients. Also,

if you want to become a recognized expert in your field, it is an imperative to start sharing your knowledge. Also, it is important to highlight that, this book is not written exclusively for practicing coaches. It also contains useful and valuable content for managers with a coaching style, or, practically for anyone interested in the subject.

Q: WHAT HAS BEEN THE FEEDBACK THUS FAR? A: Great, well beyond my preliminary expectations. I had inquiries and invitations from all over the world as a result of the book. Also, a very vivid community has formed on the Facebook and LinkedIn pages of the book. It is stunning to see how many excellent ideas and relationships a book like this can spawn.

Q: WILL THE HUNGARIAN MARKET BECOME TOO RESTRICTIVE FOR YOU AFTER PUBLISHING AN ENGLISH LANGUAGE BOOK? A: Look, my vision is to spend my old days travelling around the world from conference to conference lecturing as an internationally acknowledged expert. But the Hungarian market, and Hungary as it is, is very important to me. That’s exactly why I have invested so much on the Hungarian market in the past years. I’ve published three books, trained more than 300 coaches and so on. I think Hungary will continue to be very important to me. Also, I love every bit of what I’m doing here. ■

THE FIRST THING YOU KNOW ABOUT A SUCCESSFUL BUSINESSMAN IS THAT A WOMAN, WHO USUALLY REMAINS IN THE BACKGROUND, SUPPORTS HIM. SHE CAN BE HIS WIFE, HIS MOTHER, OR MORE OFTEN THAN YOU WOULD THINK, HIS COACH.

2 BusinessSpecialReport 17

BBJ

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Budapest Business Journal | Feb 22 – March 07

A handful of coaching tools Laura Komócsin’s handbook the Toolful Coach is the first Englishlanguage business book published by a Hungarian woman, ever. If that doesn’t sound like an ambitious enough achievement, try this one: take all the extensive literature written on the subject of coaching, and attempt to contribute something unique and valuable to it. Long story short: Toolful Coach does just that.

BBJ ZSOLT BALLA

Writing an exhaustive book on a subject constantly on the move is a rather challenging task.

And if you are looking for an area in the field of organizational and personal development that is constantly changing, the subject of coaching definitely qualifies as a top candidate. Over the course of the past two decades, coaching has not only become broadly accepted and popular among business leaders who have adopted strategic thinking, but has also grown excessively

complex and subtle. Sometimes this diversity serves the interests of the coachees, sometimes not so much. But one thing is for sure: for a coach to stay continuously up-to-date with the latest trends and techniques requires quite an effort and an enormous amount of time.

And this is where Laura Komócsin’s Toolful Coach will always come in handy. It may not be an exhaustive registry of all coaching techniques, but it is the only book listing 150 of these tools, made easily understandable and applicable with to the point descriptions and real life case studies. These 150 tools are organized along with 13 coaching model frameworks, and come from a variety of disciplines, including professional coaching, psychology, training and business management. The one-minute case studies that accompany most techniques combine theory with practice, providing illustrations as well as tangible and valuable insights into what each tool is capable of. Neither case studies, nor tools are limited to business applications: on top of the traditional grouping of life coaching, career coaching, business coaching and executive coaching, the author always pays special attention to how specific techniques can be used outside of business scenarios.

Toolful Coach also introduces its own, unique framework: named with the almost obliga-

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tory acronym, this framework is called SPARKLE, and leads the reader through seven distinct phases of the coaching process, Situation, Positioning yourself, Alternatives, Route, Key Obstacles, Leverage and Evaluation.

While the book tallies lots of techniques and uses special lingo in certain sections, Toolful Coach was not necessarily written exclusively

for coaches. Managers with a coaching view, or even average Joes striving to develop themselves will find useful and valuable examples and insights in the book.

Although Toolful Coach was published only last July, the project didn’t need too much time to outgrow its original targets. By now, it has developed from a book to a coach and coachstyle manager training project, accompanied by online consulting tool through a vivid, professional community at www.toolfulcoach.com, and it is difficult to predict what’s next for the author and her team.

From the readers’ perspective things are slightly easier. Whether you want to get a short overview on the world, techniques and potential results of a coaching process, or if you want a practical handbook that could accompany you in solving HR challenges on a daily basis, Toolful Coach demands its place on your bookshelf. ■

18 2 BusinessPartnerWatch BBJ

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Budapest Business Journal | Feb 22 – March 07

Management consulting firms

www.aam.hu

CLARITY CONSULTING INFORMATIKAI ÉS MENEDZSMENT SZOLGÁLTATÓ KFT

2,474

2,474 2,230

1,057

1,057 1,331

834

834 1,060

OTHER

IT CONSULTING

PROJECT MANAGEMENT

CHANGE MANAGEMENT

ORGANIZATIONAL DEVELOPMENT

BPR (BUSINESS PROCESS REENGINEERING)

STRATEGIC CONSULTING

TOTAL NET REVENUE (HUF MLN) 2012[2] IN 2011

–

–

Sourcing, cloud expert activity, master data management

MAIN CLIENTS IN 2012

YEAR ESTABLISHED NO. OF FULL-TIME EMPLOYEES ON JANUARY 1, 2013

2

AAM TANÁCSADÓ ZRT

SERVICES NO. OF CONSULTANTS

1

COMPANY WEBSITE

NET REVENUE FROM MANAGEMENT CONSULTING (HUF MLN) IN 2012[2]

RANK

Ranked by net revenue from management consulting

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

65

Romania: Kommunikációs és Informatikai Minisztérium, Macedonia: VÁM Hivatal, Serbia: Telekommunikációs és Informatikai Minisztérium, Bosnia and Herzegovina: Statisztikai Hivatal, E.ON, OTP Bank, MVM, Croatia: Munkaügyi Hivatal, MKB Bank

2002 70

AAM Holding Kft (99.97), Gábor Kornai (0.01), Károly Tormássy (0.01), Ákos Szirmai (0.01) –

33

Allianz Hungária Zrt, Erste Bank Hungary Zrt, KELER Központi Elszámolóház és Értéktár Zrt, Közbeszerzések Tanácsa, Budapest Bank Nyrt, Magyar Nemzeti Vagyonkezelő Zrt

2001 35

CC own shares (41.68), Tejútrendszer-alsó Zrt (41.68), Individuals (16.64) –

László Ternyik, Ferenc Hemrik Béla Balogh –

1145 Budapest, Erzsébet királyné útja 29/B (1) 422-3030 (1) 422-3032 iroda@clarity.hu

Individuals (100) –

Miklós Juhász Zoltán Bíró –

1037 Budapest, Szépvölgyi út 139.

(1) 454-1900 (1) 454-1901 info@stratis.hu

Áron Nemes (33.30), Imre Hercegh (33.30), Csaba Lengyel (33.30) –

Áron Nemes, Imre Hercegh, Csaba Lengyel – –

1138 Budapest, Váci út 169.

(1) 412-4455 (1) 412-4456 vialto@vialto.hu

Rita Veres Balázs Tari Éva Virág

1138 Budapest, Dunavirág utca 2.

Gateway Office Park - tower I. (1) 801-8000 (1) 801-8001 info.budapest@ aonhewitt.com

www.clarity.hu

STRATIS VEZETŐI ÉS INFORMATIKAI TANÁCSADÓ KFT

3

www.stratis.hu

4

5

VIALTO CONSULTING KFT www.vialto.hu

HEWITT HUMÁN TANÁCSADÓ KFT www.aonhewitt.hu

560

347

560 560

997 1148

–

–

–

–

–

–

–

HR consulting, best employer survey, employer brand research

»

22

18

»

»

MOL Csoport, Roche International, Raiffeisen Bank, Hoerbiger

1998

»

2002 25

2000 61

Aon Magyarország Kft (100) –

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Sándor Dobozi Róbert Zsoldos –

1133 Budapest, Váci út 76.

(1) 465-2070 (1) 465-2078 aam@aam.hu

Management consulting: market is splitting in two Management consultant activities are hard to define and companies are really discreet about the details of their business, too.

BBJ KRISZTIÁN KUMMER

Management consulting is a business hard to define, as there are many branches for which entrepreneurs turn to consultants. Taking strictly about business and management consultancy, about 4,000 firms have registered this kind of activity among their competencies. However, according to the statistics of the Association of Management Consultants in Hungary (VTMSz), about 800 firms have performed consultancy work in the last few years, and less the 100 might indicate consultancy as their primary activity. Altogether, the number of real consultants in the country is probably somewhere between 3-4,000.

In recent years the market seems to have split into two. One segment is consultants who help companies acquire funds through tenders and grants. “This is not the kind of work professionals in the consultancy business are proud of,” says Péter Csákvári, a member of the board of VTMSz. On the other hand, there

are companies focusing on one specialized sector and ready to add high value to their clients’ work, but the market is too small to support many of these “boutique consultants”, Csákvári adds.

Management consultants suffered in the past few years, partly due to the prolongation of the crisis and partly due to a distrustful social atmosphere around them, mainly

caused by dubious public procurement deals.

But in the recent years, the consultants’ market has experienced a slight recovery, although various segments are performing in significantly different ways. Tasks related to operational processes are popular, as is strategy and assets transaction guidance. On the other hand, HR-related consultancy is underperforming, as it has for several years.

Last year brought AAM Consulting growth of more than 20%, with revenues exceeding HUF 2.5 bln. However, the income generated in Hungary was around only HUF 600 mln, which isn’t just below the 2011 level, it is also less than in 1997. AAM blames the decline on ‘special’ and ‘crisis’ taxes levied on the banking, telecommunication and energy sectors: leading clients of the company all reduced their spending, cutting back on development projects dramatically. In the meantime, the competition increased as freelance consultants, who now dominate the Hungarian market, reduced fees significantly. Most of the company’s domestic work involved compliance and efficiency improvement projects.

The bulk of its revenues came from EU and World Bank financed projects delivered outside Hungary.

Integrated Consulting Group (ICG) also suffered a slight decrease in revenues last year, although the company forecasts a moderately better year for 2013. The recession has not decreased the number of the clients, but their purchasing habits changed for more frequent but shorter contracts. According to ICG’s experiences, clients tend to look at the tangible and measurable outcomes of consulting projects more thoroughly during the contracting phase. ■

2 BusinessPartnerWatch 19

BBJ

WWW.BBJ.HU

MAIN CLIENTS IN 2012

10

Allegroup, AVIS Budget Group BSC, GE Water, GSK, Knorr-Bremse, Samsonite, Sanmina-SCI, Velux

40

Citibank, UniCredit, Velux, Freudenberg, Tolle, Hankook

1989 17

(90) (10)

István Ecsédi Ágnes Orbán –

1124 Budapest, Németvölgyi út 64.

(1) 212-4412 (1) 212-5071 info@ improversgroup.hu

8

Pfizer Kft, Swiss Contribution Office, Kézmű Nonprofit Kft, Frontier Economics Ltd, Nanushka International Zrt, Magyar Nemzeti Vagyonkezelő, Malik Management Zentrum St. Gallen Gmbh, Országos Katasztrófavédelmi Főigazgatóság

2002 6

Tibor Héjj (100) –

Tibor Héjj – –

1126 Budapest, Szendrő utca 30.

(1) 266-1778 (1) 266-1778 info@p-m-c.hu

7

Raiffeisen Bank Zrt, Telenor Magyarország Zrt, MAVIR Zrt

1999 10

Elemér Veréb (50), Gyula Pomázi (50) –

Elemér Veréb, Gyula Pomázi – Lilla Hegedűs-Cser

1037 Budapest Szépvölgyi út 41.

(1) 488-7984 (1) 488-7985 provice@provice.hu

1994 12

István Havrancsik (72), Béla Czimbalmos (7), Tibor Eperjesi (7), Gábor Lipi (7), Stefanik Karolina (7) –

István Havrancsik – –

1025 Budapest, Törökvész út 33–37.

(1) 325-5762 (1) 325-5762 szinergia@ szinergia.hu

Krisztina Baukovácz (28.50), István Lukács (28.50), László Puczkó (21.50), Viktor Nyírő (21.50) –

Krisztina Baukovácz, István Lukács, László Puczkó – –

1051 Budapest, Október 6. utca 14.

(1) 269-1920 (1) 269-1920 info@xellum.hu

Gábor Gion Gerard Lucey Kinga Tihanyi

1068 Budapest, Dózsa György út 84/C (1) 428-6800 (1) 428-6801 deloitteinhungary@ deloittece.com

– Ernst & Young Center Cluster Limited (100)

István Havas Csaba Horváth Ágnes Pellion

1132 Budapest, Váci út 20.

(1) 451-8100 (1) 451-8199 mailbox.ey@ hu.ey.com

– Horváth AG (100)

Viktória Bodnár, Eörs Huba, István Radó – –

1119 Budapest, Fehérvári út 79.

(1) 382-8888 (1) 382-8889 company@ifua.hu

István Henye (2.50), Ferenc Eperjesi (2,50) KPMG Hungary Holdings Ltd (95)

Robert Stöllinger, Csaba László William Curley Miklós Scheibelhoffer

1139 Budapest, Váci út 99.

(1) 887-7100 (1) 887-7101 info@kpmg.hu

»

– Ness Technologics B.V. (100)

Péter Komócsi, Szabolcs Homola, András Zétényi – –

1115 Budapest, Bartók Béla út 105–113.

(1) 481-4550 (1) 481-5151 hungary@ness.com

– PwC CEE (100)

Nick Kós Tamás Pál Viktor Bálint

1077 Budapest, Wesselényi utca 16.

(1) 461-9100 (1) 461-9105 info@hu.pwc.com

Individuals (100) –

Ferenc Makó Szilvia Béres István Kürti

1028 Budapest, Harmatcsepp utca 53.

(1) 391-6144 (1) 391-6145 info@sensa.hu

YEAR ESTABLISHED NO. OF FULL-TIME EMPLOYEES ON JANUARY 1, 2013

NO. OF CONSULTANTS

OTHER

IT CONSULTING

PROJECT MANAGEMENT

CHANGE MANAGEMENT

ORGANIZATIONAL DEVELOPMENT

TOTAL NET REVENUE (HUF MLN) 2012[2] IN 2011

BPR (BUSINESS PROCESS REENGINEERING)

COMPANY WEBSITE

SERVICES STRATEGIC CONSULTING

NET REVENUE FROM MANAGEMENT CONSULTING (HUF MLN) IN 2012[2]

RANK

Budapest Business Journal | Feb 22 – March 07

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

ICG (49) ICG Integrated Consulting Group Holding GmbH (51)

Zoltán Márton, István Kosztolányi – –

1051 Budapest, Sas utca 10–12.

(1) 301-8713 (1) 475-0650 officeHU@ integratedconsulting.hu

ICG INTEGRATED CONSULTING GROUP TANÁCSADÓ KFT www.integratedconsulting.hu

6

7

IMPROVERS GROUP (SÄMLING FRANKLINCOVEY CÉGCSOPORT)

245

245 357

170

469 614

www.improversgroup.hu

–

Executive coaching, lean sigma, skills development, leadership development

–

Production optimization

PROACTIVE MANAGEMENT CONSULTING KFT 8

9

www.p-m-c.hu

PROVICE ÜZLETI ÉS INFORMATIKAI SZOLGÁLTATÓ ÉS TANÁCSADÓ KFT.

105

109 58

100

210 222

–

–

–

www.provice.hu

SZINERGIA PROJEKT-, MŰKÖDÉS10 ÉS VÁLTOZÁSMENEDZSMENT KFT

77

www.szinergia.hu

XELLUM TANÁCSADÓ ÉS 11 SZOLGÁLTATÓ KFT

75

www.xellum.hu

159 153

75 107

–

Courses and training

–

Effficiency improvement, financial consulting, headcount and cost reduction, EU programs and tenders

10

»

4

Danubius Zrt, Magyar Posta Zrt, Médiaszolgáltatás Támogató és Vagyonkezlő Alap, PortfoLion Kockázati Tőkealap-kezelő Zrt, Reckitt Benckiser Magyarország Kft, Samsonite Hungária Kft

2002

»

2004

»

DELOITTE MAGYARORSZÁG[1] www.deloitte.hu

»

NR

ERNST & YOUNG NR TANÁCSADÓ KFT.[3]

»

www.ey.com/hu

NR

IFUA HORVÁTH & PARTNERS KFT www.ifua.hu

KPMG HUNGÁRIA KFT. NR www.kpmg.hu

NR

NESS HUNGARY KFT www.ness.com/hu

»

»

»

» 10,080

» 10,800

» 1,627

»

13,872[4]

» 3,217

–

Risk management, fraud risk management services, administrative consulting services

Finance & Controlling consulting

–

»

»

»

»

»

1990 392

»

1989 517

»

»

1990

»

1989

»

2002

–

»

»

1989 550

7

Opel, Budapest Bank, Eckes - Granini

2004 4

»

»

–

»

PWC MAGYARORSZÁG www.pwc.hu NR

NR

SENSA CONSULTING KFT www.sensa.hu

»

»

14,712[3]

Educational services

»

168 244

–

–

NOTES: (1) Among the Hungarian subsidiaries, only Deloitte Zrt offers management consulting. (2) Financial data provided by the companies has been closed by accountants but not yet audited. (3) Data of business year July 1, 2011 - June 30, 2012.

(4) Data of business year October 1, 2010 - September 30, 2011.

»= would not disclose, NR = not ranked, NA = not applicable

This list was compiled from responses to questionnaires received by February 19, 2013 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

3 Socialite

BBJ

Room escape games: the latest craze in Budapest Imagine that you and your friends are locked up in a dark, creepy cellar and have only one hour to escape. You have to find clues, keys and the way to the exit through a series of puzzles and mind-breakers. Sounds familiar?

Then you have probably seen TV shows like the Crystal Maze or played classic point and click computer games from the ’80s and’90s like Myst, Zak McKracken, or the Monkey Island series. Or, quite possible, you spend half of your working hours playing the myriads of ‘escape the room’ flash games on the Internet.

NO FLOW, LOW, NO GLOW What is flow theory? Well, flow is the menate of operation in which a person pertal state ng an activity is fully immersed in a forming feelingg of energized focus, full involvement, njoyment in the process of the activand enjoyment ity. In essence, flow is characterized by complete absorption in what one does. Artists who would d become so immersed in their work that they hey would disregard their need for food, water and even sleep fascinated Csíkszentmihályi, the father of the theory. The process was named amed thus because several respondents in Csíkszentmihályi’s 1975 interviews described “flow” experiences using the metaphor of a water current nt carrying them along.

According rding to Gyurkovics, ach the flow state, to reach

the puzzles should be challenging: not too hard, and not too easy. Players must have a sense of achievement, positive feedback, and be disconnected to the point where they

BBJ KRISZTIÁN KUMMER

Less than two years ago ParaPark, the first real life room escape game, opened its underground doors in Budapest and unleashed a frenzy the Hungarian capital hasn’t seen since the opening of the first ruin pubs at the beginning of the new Millennium.

And the parallels with ruin pubs are not just a mere coincidence. Building up a room escape game is cheap (in fact, much cheaper than in the case of ruin pubs) and seems to be unique to Hungary. Also, “the owners are not professional businesspeople, but rather entrepreneurs, who invest serious amount of their own time beside the original financial funds,” says Gábor Rétfalvi, owner of collecting site exitgames.hu.

The rules are almost the same at every site: a group of three to six people are locked in a room and through a series of puzzles and mind-teasers must find their way out in exactly 60 minutes. Players are watched via CCTV, and sometimes helped with little hints, however the chance of getting out is still around 50%. Intelligence, good observational abilities and playing as a team are essential for success.

“We established the first such game not just in Budapest but, as far as I know, in the whole universe,” says Tímea Váradi, one of the operators of ParaPark. The original idea comes from Attila Gyurkovics, who mixed his acquired knowledge in supervision (professional personal skill development) with Mihály Csíkszentmihályi’s famous flow theory.

are completely captivated by the flow.

Those 60 minutes should be about nothing else but the game.

THE BIG BOOM ParaPark opened its first game room in the early summer of 2011 and in less than two years, more than 15 more sites have opened all over Budapest. However, return margins are not as lucrative as might have seemed at the start.

The first hype is over, now some kind of market consolidation must come. “While ParaPark still operates very well, the same couldn’t be said about all the rival sites. As far as I can see, most of them think about expansion (on site, in rural locations or even abroad), but are neglecting marketing,” Rétfalvi says.

The main channel for marketing is still through coupon sites, where price competition is high, sometimes to the extent of compromising profitable operations. “You can find 50% discount coupons to almost any rooms now, “ said Rétfalvi, who predicts significant market consolidation in the near future. “Half of them will be out of business in a year and a half.”

But even with some consolidation factored in, opening a collecting site seems like a good idea to Rétfalvi. “The site could provide some marketing for the rooms. We

WWW.BBJ.HU

21

Budapest Business Journal | Feb 22 – March 07

DIFFERENT WAYS TO SUCCEED With so many escape rooms opening at almost the same time, organizers feel the need to differentiate themselves from their rivals.

Choosing themes wisely and building the rooms to a high standard are, obviously, essential.

The keywords are mood and flow. For example, Escape Room opened in November and focused keenly on

atmosphere, offering very different feelings in its four rooms (jungle, retro, beach and horror). ClosedIn will open a room in a few days with a Formula 1 theme, which might be sound a bit strange, however, it is more focused on the puzzles and riddles themselves.

Based on location and owners’ own fantasy, room themes vary from site to site, but retro, horror, jungle and crime scene are among the favorites. But with so many “different yet similar” sites around the town, owners must offer something extra to visitors. Szobafogság, with two rooms and two more planned, focuses on providing teambuilding events. Escape Room will hold birthday parties for children; however, the service is also popular among adults. PánIQ-Szoba offers a unique 120

minute-long escaping experience, rather than the “industry standard” 60 minutes.

Some of the rooms are designed to fulfill the expectations of exclusively foreignspeaking visitors, as owners hope for high numbers of reservations rese in the summer months from tou tourists, not least stag parties. However, th that inf lux hasn’t arrived yet: visitors are mostly hardcore gamers and office teams.

GAME WITHOUT WITHOU FRONTIER Room escape games ga have popped up in Budapest like mushrooms mu after abundant rain, but the “infection” “inf hasn’t stopped at the borders of the th capital. ParaPark has already opened rooms ro in Győr, Szeged and Siófok, moreover a mobile room appeared at last year’s me mega festivals, like Sziget, Hegyalja, Efott, aand Volt, which seems to be a viable busin business model to tackle the falling demand d during summertime.

With real life room escape games a Hunga uniquely Hungarian invention, export seems a viable option op to get away from the choking domestic domest competition, but it is not as easy as it might at first appear.

“Just as in the case of ruin pubs, escape the rroom games could spread around tow town so easily, because they are relatively relati cheap to establish. o rooms could be rented Cellars or at a very low price and the backbone of manual and operational p work is performed by the organizers the themselves,” Rétfalvi said.

“Almost aall the organizers have planned to eexpand into foreign cities, but when th they face rental prices and work-related exp expenditures, they usually take a step back.”

However, there are examples of a move into Europe: ParaPark Para has opened a room in Barcelona and Escape Room has now completed its pl plans to expand over the borders. “Invisible “Invisib Exhibition – a tour in complete darkness darkne guided by real blind people – is a grea great success around Europe and we want to install our room beside it,” Escape Room owner Alexandra Kárpáti said. She als also wants to organize programs for schoolchildren adjusted to their education level in mathematics and foreign languages.

But the real trap in escape room games is turnover. Once a room has been successfully exited, players rarely come back, so rooms have to find new players all the time or redesign the rooms periodically.

“We change the game play every six to nine months,” Kárpáti said. “The installation could be the same, but you can change the content adjusted to visitors’ needs and demands,” she added. ■

Photo:s Szobafogság

started the site two weeks ago, and already have plenty of reservations through it.”

22 3 Socialite BBJ

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Budapest Business Journal | Feb 22 – March 07

WHO'S NEWS

Name József Király Current company/position DGS Global/managing director

Király succeeds Zsófia Szelecki at the helm of DGS Global. Király graduated from the Technical University of Budapest and later studied project management. He has been working in HR and corporation development since 1999. He spent 22 years at now grounded national airline Malév.

In 2006, he was named HR director at Malév’s maintenance subsidiary Aeroplex of Central Europe Kft. A year later, when Malév was privatized, he was asked to head the HR department of the company.

Do you know someone on the move?

Send information to research@bbj.hu

Name Péter Kurucz Current company/position Brandbank Hungary/ country manager

Before joining the Hungarian subsidiary of digital information management company Brandbank, Kurucz held sales positions at various IT companies.

Among others, he worked as head of the integrated telecommunications services department of Siemens for six years, and was later investment director of an IT venture capital firm. He graduated from the Szent István University, and speaks fluent English and German.

Name Márta Vitárius Barna Current company/position Szentkirályi Ásványvíz/ commercial director

The new director joined Szentkirályi Ásványvíz in 2012 as field sales manager.

She was promoted to key account manager a few months later. She started her professional career in 1986 at state grocery store Óbudai Közért Vállalat.

In 1997, she was named commercial director at Sláger Kereskedőház.

Between 2002 and 2007, she was assortment manger at Spar Magyarország.

Before taking her current assignment, she worked as commercial director at Soód Tésztaipari Kft.

FEB 25

FEB 27

FEB 28

MARCH 04

Business Forum with Péter Szijjártó, State Secretary for Foreign Affairs and External Economic Relations LOCATION Budapest Marriott Hotel, 1051 Bp, Apáczai Csere János u. 4 TIME 12:30 - 2 pm FEE AmCham members in good standing HUF 12,700/person; non-members HUF 31,750/person ORGANIZER American Chamber of Commerce in Hungary CONTACT www.amcham.hu

Big data, apps and the human factor LOCATION AmCham Conference room, 1051 Bp, Szent István tér 11 TIME 9 - 10:30 am FEE No fee for members ORGANIZER American Chamber of Commerce in Hungary CONTACT www.amcham.hu

Joint meeting of Communications and Marketing Club & Industrial, Logistics and Purchasing Club LOCATION Print City Europe, 1151, Székely Elek utca. 11.

TIME 2 - 5 pm FEE CCIFH members, HUF 2,000 + VAT; non-members HUF 3,000 + VAT ORGANIZER French-Hungarian Chamber of Commerce and Industry CONTACT www.ccifh.hu

Business Lunch with Guest Speaker Gergely Prőhle, Deputy State Secretary for EU Bilateral Relations, Press and Cultural Diplomacy LOCATION Budapest Marriott Hotel, Corso Room, 1052 Budapest Apáczai Csere János u. 4.

TIME 12:30 - 2 pm FEE BCCH members, HUF 14,000 + VAT; HABA members, HUF 16,000 + VAT; non-members, HUF 18,000 + VAT ORGANIZER British Chamber of Commerce in Hungary CONTACT www.bcch.com

MARCH 04

MARCH 08

MARCH 22

APRIL 04

CEE Business Integrity Forum Against Corruption LOCATION KINNARPS, Jarl Conference Room, 1133 Budapest, Váci út 92.

TIME 6 – 9 pm FEE No fee ORGANIZER European Chamber CONTACT www.eucham.hu

Hungarian Business Network: V4 Business Women’s Congress FEE For HBN members EUR 12/person; for non-members EUR 29/person ORGANIZER Hungarian Business Network CONTACT www.businesswomencongress.nl

Budapest International Business Center Conference 2013

German-Hungarian Business Forum LOCATION BKIK Headquarters, 1016 Budapest, Krisztina körút 99.

TIME 9:30 am - 4 pm FEE HUF 15,000 + VAT ORGANIZER German-Hungarian Chamber of Industry and Commerce CONTACT www.ahkungarn.hu

LOCATION Sofitel Budapest Chain Bridge,

1051 Bp, Széchenyi tér 2 TIME from 9 am FEE BCCH members HUF 50,000; non-members HUF 63,500 ORGANIZER British Chamber of Commerce in Hungary CONTACT www.bcch.com

3 Socialite 23

BBJ

WWW.BBJ.HU

Budapest Business Journal | Feb 22 – March 07

A guide to office politics The modern working world is a dangerous place, where game playing, duplicity and sheer malevolence are rife. Do talent and hard work still count, or is it all about politics?

In Office Politics, the bestselling author of Affluenza reveals the murky underside of modern office life. With cutting-edge research and eye-opening interviews, he highlights the nasty practices that propel people to the top. But he also argues that office politics have a bad reputation. While most people consider them unwelcome, unpleasant and even toxic, Oliver James says they are an inevitable part of professional life, and they must be “embraced with as much humor, self-conscious deliberation and wisdom as possible”. Office Politics can help us in this endeavor, explaining what motivates our troublesome colleagues, and what we can do to protect ourselves against them.

James argues that there is a “Dark Triad” of character types who are often over-represented in office environments: psychopaths, who seek thrills and lack empathy; machiavellians, who ruthlessly pursue their own interests; and narcissists, who are prone to feelings of superiority.

People who display a mixture of all three characteristics are known as ‘triadic individuals’, and these are the people who will cause us the most problems in the workplace.

Drawing on some amusing and even appalling case studies, James shows us how to recognize these characteristics in our colleagues and managers. He then shares strategies and techniques for not only tolerating them, but thriving in the difficult environments they create, with chapters on the importance of acting, astuteness, ingratiation, go-getting, virtuosity and, lastly, dirty tricks. Most of us feel uneasy about dirty tricks, says James. However, “you need to understand that even if you do not use them, others may do so”, he explains.

If you tell yourself that you never engage in office politics, writes James, “you are almost certainly deceiving yourself ”. He wants his readers to understand that “emotionally healthy office politics can enable you to reduce the burden of emotional labor you carry during your working life”.

With the right mindset, you can distinguish and deal with nasty and over-promoted colleagues, charm your way through interviews and assessments, and achieve your professional goals. ■

OFFICE POLITICS BY OLIVER JAMES Published by Vermillion (an imprint of Ebury Publishing) ISBN 9780091923952 Available to order through www.hungaropress.hu

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