Budapest Business Journal 21/08

SPECIAL REPORT: VOL. 21. NUMBER 08

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APRIL 19, 2013 – MAY 02, 2013

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NEWS

REALITY CHECK 0.7%

revised economic growth for 2013

Photo: Noémi Bruzák/MTI

Hungary is lowering its growth expectations for 2013 to bring it closer to the near−zero figure most observers expect. Still, there is no budging from keeping to the 2.7% budget gap and striving to exit EU scrutiny.  07

Central bank to open money taps The National Bank of Hungary looks set to take on the role that Prime Minister Viktor Orbán intended and has announced a scheme that, it is hoped, could add nearly 1% of additional growth to the country’s GDP. 08-09 BUSINESS

Businesses in danger

SOCIALITE

Design market hits the road The capital’s seven−year− old design market gets a new co−owner who plans to inject some HUF 30 million to fuel expansion plans. Now WAMP owners hope to introduce it to Vienna and Bratislava within months. 34-35 Q&A A

BKK KK ad head vid Dávid tézy Vitézy 10-11

www.bbj.hu Budapest Business Journal | April 19 – May 02

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MANAGING EDITOR:

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THE EDITOR SAYS

VANISHING PENSIONS The time has come for Hungarians to see how well the gov− ernment managed to control the immense wealth, around 10% of gross domestic produce, in private pension funds that was nationalized earlier. There is little hope for joy, since it turns out that the pension money is gone. It was rumored in 2010 that the government’s other− wise common “going where the money is” focus was being directed towards private pensions funds, where a private sector pillar had been introduced into the welfare system by an earlier socialist government to better assure the sus− tainablity of the system. In two steps, the state grabbed all of the approximately HUF 3,000 billion in accumulated savings and also man− dated all future contributions to be channeled directly to the treasury. The takeover was so drastic that those who decided to stick with the private funds were threatened with being expelled from the state system. It was dubbed a “rescue” from the gambling that was alleged of the funds. Another major promise was that a new state pension sys− tem would be introduced, one that has individual accounts

where citizens may transparently monitor how much they have paid in. This idea was shelved: in fact government spokesman András Giró−Szász at one point spoke of the pension changes as a structural reform since it increases central revenues – rather than payments appearing on ded− icated pension accounts. Now, the issue is finally back on the agenda. However, one look at the state of the pension funds shows that the money is all but gone. As a result, the individual accounts will start from zero, with all the wealth that was stored in the private accounts vanished. Government officials stated that this will be a gradual process, but eventually the full amounts involved will be reimbursed. It is unclear when and from what resources the government is planning to do this, provided the pen− sion wealth has vanished into the pits of the economy that haven’t been fixed. It turns out that the handful of clients who chose to stick with the private system and are now seeing highly favor− able yields may have had it right all along.

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HOLE IN THE PLAN Ever since the second Fidesz government won the 2010 elections, the master plan driving its term in office was to create a society that embraces solidarity, but doesn’t run on welfare. Officials famously discussed ambitious goals like creating no les than one million new jobs over the course of a decade. The past has already seen steps that increased the num− ber of people on the workforce market, like demanding commu− nity labor from for− mer welfare recipients, and even accepting the political losses from taking away the early retirement options for emergency responders. But, even with the resulting 3.5 mil− lion Hungarians at work, that still means that the other 6.5 are not, because they are retired, are disabled, are still in school, or worst of all, active− aged and unemployed. More importantly, the private sector, the com− panies that have the option to invest and develop, are almost completely on the defen− sive. The tax authority’s figures show that the number of employees in the private sector is stalled at 2.6 million with only minor changes. While there may be some solace to be gained from the knowledge that the market has bottomed out with nowhere left to descend, there is still no great hope of it moving on up, even though 2013 is a year the government says it expects the economy to return to growth. In terms of the available options, the government is try− ing to bolster its arsenal. There is the aim of funneling as

much of the remaining European Union development funds as possible into the economy, while the new, “supportive” management of the National Bank of Hungary is also get− ting involved. The MNB thinks that if its newly announced measures are fully successful, they can add 0.7% to economic growth. It is unclear whether success would double the latest growth projections to 1.4%, or if the Economy Ministry is also basing its own fore− cast on the central bank program. What the government still hasn’t been able to do, and doesn’t seem intent on doing either, is to restore trust towards the country. Sectoral taxes that are still around despite earlier promises they would be gone by now are a bane to new developments, corporate planning and hence any hope that businesses could have any interest in expand− ing the payroll. There are problems not only in terms of quantity but also in quality, with the skilled becoming all the more ready to leave the coun− try and, despite cen− tral rhetoric, there is no guarantee they might return. If the master plan is to ever become reality, the govern− ment must realize that defiant rhetoric against any and every international organization that objects to Hungar− ian practices won’t suffice. It will take all those foreign companies present in Hungary to play their part, and not through taxation only, but by running successful busi− nesses in the country that could genuinely allow them to contribute to the economy.

WHAT THE GOVERNMENT STILL HASN’T BEEN ABLE TO DO, AND DOESN’T SEEM INTENT ON DOING EITHER, IS TO RESTORE TRUST TOWARDS THE COUNTRY.

BBJ

1 News

NEWS IN BRIEF

IMF sees economy stagnating in 2013

04

NEWS

Gov’t signs strategic agreement with Lego

 05

macroscope

LAST OF THE OLD GUARD LEAVES CENTRAL BANK Deputy governor of the National Bank of Hungary Júlia Király announced her resignation in early April, a few months before the end of her mandate and shortly after a change in command. Her departure marks the end of the internal opposition at the MNB.

STORY HIGHLIGHTS ■

Matolcsy’s arrival at the MNB might harm national economy, Király says ■ Her resignation letter also cited a lack of expertise now at MNB

during her term, not only trying to halt the rate−cutting cycle initiated last August by the MPC majority nominated by the cur− rent Fidesz government, but often voting for a hike. In fact, MNB records show she is the MPC member with most votes in sup− port of a hike in the history of democratic

eign currency mortgage debtors. She was highly critical of government measure to allow the one−off discount reimburse− ment of mortgages, seeing its damaging effects to the banking sector and conse− quently its effects on the economy in gen− eral through the limits to lending.

Deputy governor of the central bank Júlia Király has announced that she doesn’t wish to serve the remainder of her term, which would have ended in July, and stated that she plans to relinquish her post by April 22. In her letter of resignation, addressed to President János Áder, she cited what she saw as the negative changes that have occurred in the management of the MNB since the appointment of former econ− omy minister György Matolcsy as gover− nor. In her view, Matolcsy’s arrival and the changes he implemented have curbed the scope of professional debate among rate− setters, and that has the potential to harm the national economy and hurt the reputa− tion of the MNB. “The council’s shortened sessions –in light of Mr. Matolcsy’s recommendation – in my opinion no longer provide the grounds for genuine professional debate,” she wrote. Király was the last of the “old guard” within the management of the central bank, and on the rate−setting Monetary Policy Council. She was the one remain− ing member of the MPC who represented the minority along with former governor András Simor and deputy governor Ferenc Karvalits, whose mandates ended in March. Her resignation letter also cited a lack of expertise now at the MNB. “In my opinion the new management of the central bank lacks the necessary professional experi− ence to manage the –rightfully – acclaimed staff of the MNB which is of international renown, and isn’t always able to determine the economical fundaments of specific mar− ket reactions occurring,” the letter reads. “The newly established management sys− tem may endanger the National Bank of Hungary’s prestige, created over many years, in Hungary and abroad.” She highlighted the appointment of Ádám Balog – former state secretary in Matolcsy’s economy ministry – as deputy governor. “In my judgment, Mr. Matolcsy

Photo: EBRD

GERGŐ RÁCZ

THE NEWLY ESTABLISHED MANAGEMENT SYSTEM MAY ENDANGER THE NATIONAL BANK OF HUNGARY’S PRESTIGE, CREATED OVER MANY YEARS, IN HUNGARY AND ABROAD. has delegated the staff overseeing mate− rials to prepare the decisions of the Mon− etary Council to a deputy lacking the necessary theoretical knowledge and pro− fessional experience in monetary, finan− cial and banking conditions.” HAWKISH RATE-SETTER Király was the “über hawk” within the MPC

Hungary’s central bank, with 14 calls for an increase during her 66 participations in MPC meetings. Apart from the fact that she was nom− inated to her position by the previ− ous socialist MSzP government, Király earned herself ill will from the politi− cal right because of her criticism of gov− ernment measures launched to aid for−

“I see a growing certainty for unfounded, misguided decisions [in the MPC] for which I wish not to bear any responsibility as dep− uty governor or as a member of the Mone− tary Policy Council,” she wrote. Király said she will not be speaking anywhere in the press immediately after her resignation when approached by the Budapest Business Journal.

04 News

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

NEWS

IN BRIEF

Budapest Business Journal | April 19 – May 02

I have to keep convincing everyone that I’m not a black sheep, I know how to eat with a knife and a fork Prime Minister Viktor Orbán told Germany’s Die Welt defending the values of his governments’s policies against international attacks.

Hungary once again was in the focus of European officials with a whole session of the European Parliament being dedicated to whether the country’s newly approved constitutional changes are in line with European Union law. The revisions to the basic document sparked strong concerns from the President of the European Commission José Manuel Barroso, as well as vice president Viviane Reding. Prime Minister Viktor Orbán (l) paid a visit to Strasbourg in the run−up to the hearing and presented Hungary’s case to the European People’s Party and then met with President of the EP Martin Schulz (r).

ECONOMY IMF SEES HUNGARY ECONOMY STAGNATING IN 2013

The International Monetary Fund projects Hungary’s economy will stagnate this year in its fresh world Economic Outlook. The IMF knocked down the projection to 0% GDP growth from 0.8% growth in the previous outlook published six months earlier. “Hungary faces a dif− ficult outlook due to high public and external debt, along with unconven− tional policies that have eroded con− fidence and investment,” the IMF said. The projection is well under the government’s forecast for GDP growth of 0.7% this year – a forecast the government lowered from 0.9% in the course of submitting the coun− try’s updated Convergence Program to Brussels. The IMF expects growth of 1.2% next year, while the govern− ment targets 1.9%. HUNGARY MARCH CPI SLOWS TO 2.2%

Consumer prices in Hungary rose 2.2% in March from the same pe− riod a year earlier, slowing from a 2.8% increase in February, the Cen− tral Statistics Office (KSH) said. Analysts had put March CPI at 2.5%−2.6%. The fall in the headline CPI was helped by an 8.1% drop in household energy prices, in turn supported by a government man− dated 10% reduction in gas, elec− tricity and district heating prices from the start of the year. Excise tax changes lifted alcohol and tobacco prices by 11.7%. Consumer durable prices fell 2.2% and clothing prices edged down 0.4%. Service prices climbed 3.8%. Food prices rose 3.4%.

Prices in the “other goods” catego− ry, which includes vehicle fuel, were up 1.5%. Core inflation, which ex− cludes volatile fuel and food prices, was 3.4% in March. NEW POINTS OF SALE FOR GOVERNMENT BONDS LAUNCHED

The government is looking to ex− pand the range of locations where government bonds tailored for households are available, Economy Minister Mihály Varga told public television. New spots will be open− ing in Budapest as well as several larger regional cities he said. Varga stressed that Hungarians are show− ing growing demand for govern− ment bonds as a steady form of investments, which coincides with the government initiative of giving domestic funds a far bigger role in financing the state. CMI FALLS WELL UNDER CONTRACTION THRESHOLD

Hungary’s Credit Manager’s Index (CMI) fell to 42.3 in Q4 of last year from 50.5% in the previous quarter, the Hungarian Credit Management Association (MCMSz) said. An in− dex of more than 50 signals eco− nomic expansion. An index under the threshold shows contraction. The index is based on a survey of credit managers, factors and finan− cial officers. TRADE SURPLUS REACHES €673 MLN IN FEBRUARY

Hungary had a €672.6 mln trade surplus in February, down from €743.3 mln a year earlier, the Cen− tral Statistics Office (KSH) said in a first reading of data. Exports fell 1.2% to €6.569 bln from the same period a year earlier. Imports edged

Numbers in the news

7.2%

y/y increase in Hungary’s construction sector in February, after four months of y/y decline, Central Statistics Office

data shows.

HUF

862 BLN

The amount factoring association members bought in 2012. Almost one−third of the receivables came from trade companies and about half are from industrial companies.

down 0.1% to €5.896 bln. The trade surplus amounted to €988.8 mln in January−February 2013. Exports rose 1.5% to €13.034 bln and im− ports were up 2.5% at €12.045 bln. Hungary’s trade surplus reached €6.823 bln in 2012, down €237 mln from 2011, KSH said in a second reading on March 4. AUTOMOTIVE SECTOR FAILS TO SLOW INDUSTRIAL OUTPUT DECLINE IN FEBRUARY

New automotive sector capacity failed to slow the decline of Hun− gary’s industrial output in Febru− ary, detailed data from the Central Statistics Office (KSH) shows. The output of the motor vehicle segment rose 4.4% year−on−year in February, lifted by added capacity at German carmakers Daimler and Opel. At the same time, output of the com− puter, electronics and optical seg− ment plunged 18.3%. Machinery sector output fell 7.7%, output of pharmaceutical companies dropped 12.2% and food makers’ output was down 3.5%, but chemical sector out− put climbed 7.5%. Headline output fell 5.4% in February – as in the first reading of the data published on April 5 – accelerating from a 1.4% drop in January. Adjusted for the number of workdays, output edged down 1.1% in February, after falling 1.4% in January.

DOMESTIC HUNGARY OFFERS 3.46 MLN EMISSION UNITS AT APRIL EEX AUCTIONS

Hungary will offer a combined 3.46 million EU emission allowances (EUAs) at two auctions on the Eu−

ropean Energy Exchange (EEX) by the end of April, the National Devel− opment Ministry said. Hungary will put 1.73 million EUAs to auction on April 23 and an additional 1.73 mil− lion EUAs on April 25. ONE-QUARTER OF HUNGARIAN HOUSEHOLDS PLAN ENERGYSAVING IMPROVEMENTS

About 24% of Hungarian house− holds plan energy−saving improve− ments in their homes in the coming three years, business daily Világ− gazdaság said, citing data from En− ergiaklub. The representative sur− vey shows 15% of households plan such improvements in the coming 12 months. About half of those who plan improvements want to better insulate their homes, one−quarter want to replace windows and doors, and another quarter want to reno− vate their heating.

POLITICS NATIONALISTS TO CHALLENGE BANNING MOTORCYCLE PARADE

The organizers of the controversial “turn on the gas” motorcycle parade announced they would lodge a court complaint against the government for banning their event. The nationalist organizers were planning to hold the event on the same day as the March for Life commemorating the victims of the Holocaust, which led to Prime Minister Viktor Orbán personally de− claring that such provocation is unac− ceptable. The organizers stated that having their event handpicked and banned is completely illegal, not to mention that it was organized on the same day last year without sparking any objections at the time.

Photo: Szilárd Koszticsák/MTI

HUNGARIAN CONSTITUTION UNDER SCRUTINY

www.bbj.hu

News 05

Budapest Business Journal | April 19 – May 02

COMPANY NEWS

HUNGARIAN INSURERS’ REVENUE from premiums

on travel policies came to HUF 9.5 bln last year, level with 2011, the Hungarian Insurers Association (MABISz) said. MABISz attributed the stagnation to a drop in the number of travelers.

OTP Bank is looking to expand in Russia, chairman of the lender’s Russian unit Zoltán Illés said in an interview published in business daily Kommersant. Asked whether an expansion could involve acquisitions as well as organic growth, Illés said everything would depend on price. He suggested the main focus of the Rus− sian unit is profitability, rather than market share.

Hungary’s government signed a strategic agreement on April 15 with the local unit of Danish toymaker Lego. State secretary for foreign affairs and external economic relations Péter Szijjártó and Lego investment director Martin Svejda signed the agreement. Lego’s plant in Nyíregyháza is one of five around the world where the company’s building blocks are made. The plant employs 1,2001,300 people on average. Since last summer, the government has signed strategic partnership agreements with the local units of Coca-Cola, Alcoa, Daimler, Suzuki, Hankook, General Electric, Microsoft, Stadler Rail, Tesco, IBM, Tata Consultancy Services, Nokia Siemens, National Instruments, Audi, Jabil Circuit, Continental and Dalkia, as well as with Hungarian drugmaker Richter. It expects to sign about 40 such agreements.

Raiffeisen Bank’s after−tax loss narrowed 51% to HUF 47.4 bln in 2012, CEO Heinz Wiedner said at a press conference. Risk provisioning fell 51% during the period, he added. The bank had total assets of HUF 2,096 bln at the end of 2012, down 9% from 12 months earlier. Shareholders of Magyar Telekom approved the board’s proposal to pay a HUF 50−per−share dividend on 2012 profit, tapping profit reserves, at an annual gen− eral meeting. The dividend fund comes to HUF 52.1 bln and includes the compa− ny’s entire net profit of HUF 30.8 bln as well as HUF 21.3 bln from profit reserves. The annual general meeting of Hungarian vehicle and vehicle parts maker Rába has approved the management’s proposal to pay no dividend and place all of last year’s HUF 699 mln profit in profit reserves. The state of Hungary holds 73.7% of Rába shares and 76.79% of the voting rights Knorr−Bremse Fékrendszerek has laid the cornerstone of a HUF 5 bln pro− duction hall and development laboratory in Kecskemét. Knorr−Bremse Fékrend− szerek won HUF 1.4 bln in European Union support in the framework of the New Széchenyi Plan for the investment, which will create 111 jobs. Hungary’s ISD Dunaferr plans to spend about HUF 3 bln on developments at its hot−rolled steel mill this year, continuing a modernization started before the crisis. The project will boost the mill’s annual output by about 10% to 2.1 million tons.

Photo: MTI/Zoltán Máthé

GOV’T SIGNS STRATEGIC COOPERATION AGREEMENT WITH LEGO UNIT

Total assets of the Hungarian Export−Import Bank could rise from HUF 190 bln last summer to HUF 1,200 bln by 2016 thanks to legislation that broad− ens the lender’s product palette, CEO Roland Natran said in a recent issue of daily Világgazdaság. Parliament recently approved legislation that makes it easier for Eximbank to finance its lending activities while widening the range of these activities to which it may apply a state guarantee.

L-R: Reinhard Mitschek, managing director of Nabucco Gas Pipeline International GmBH, Pál Kovács, state secretary at the National Development Ministry, Gerhard Roiss, CEO of OMV

NABUCCO COMMITTEE REAFFIRMS COMMITMENT TO BUILDING PIPELINE Permanent members of the Nabucco Committee reaffirmed their commitment to bringing gas from the Caspian Sea region to Europe through the planned Nabucco pipeline in a political declaration signed at a meeting in Budapest on April 12. Representatives of the signers of the inter−government contract on the Nabucco pipeline – Hungary, Bulgaria, Romania, Turkey and Austria – participated at the meeting. The Nabucco West pipeline project is to bring gas from Central Asia to Europe, reducing the region’s energy dependence on Russia.

Robert Bosch Energy and Body Systems Kft, a unit of German engineering company Bosch based in Miskolc, will receive HUF 2.3 bln in European Union grants for technological developments worth HUF 6.3 bln. The developments, consisting of three projects, were launched in 2012, and will create 200 new jobs.

Snack company Kraft Foods Hungária is taking the new name Mondelez Hungária and joining Mondelez Europe. Parent company Kraft Foods changed its name to Mondelez International last year, after spinning off its North American grocery business. Kraft Foods Hungária had revenue of HUF 34.6 bln in 2011.

Automotive industry supplier Johnson Controls is spending HUF 1.5 bln on developments at its unit in Mezőlak. The investment will boost efficiency and create 50 jobs. At present, 734 people work at the base, which makes car seat mechanisms. The base had revenue of HUF 25 bln in 2012.

Bids for the assets of troubled meat company Kapuvári Hús and its unit Kapuvári Bacon can be submitted by May 3. Liquidator Nemzeti Reor− ganizációs Nonprofit offered the assets for HUF 2 bln, Econews reported. Kapuvári Hús owes its creditors more than HUF 8 bln.

GE Hungary is developing clinical imaging software and lighting technology solutions with support from the state’s Research and Technological Innova− tion Fund. The projects are supported with HUF 1.4 bln from the fund.

Used car seller AAA Auto will delist its shares from bourses in Prague and Budapest on July 4, according to a resolution approved by shareholders, the com− pany said. AAA Auto temporarily shut down its operations in Hungary in 2010 because of the worsening economic situation and poor demand. Nestlé Purina has started production at its newly expanded unit in Bük, where pet food production capacity has been doubled with a HUF 13 bln investment. Nestlé has invested HUF 35 bln over 15 years at the unit. The newly completed investment created 165 jobs, raising headcount to 780. The Széchenyi Capital Investment Fund (SzTA), a venture capital fund established by the state to support SMEs, has acquired a minority stake in Oxygen Media Group, a regional radio, television and Internet portal company based in Győr. SzTA acquired the stake, the size of which was not revealed, for HUF 110 mln. Russia’s Rosatom is interested in Hungary’s conventional energy industry as well as its nuclear power sector, the deputy head of the company’s marketing unit said in daily Napi Gazdaság. Rosatom could be a supplier of conventional energy systems or of heating plant technology in Hungary, said Rosatom Over− seas deputy head Boris Arsejev. Lindab Hungary, the Hungarian unit of Swedish building−materials maker Lindab, will launch the production of specialty roofing panels at a HUF 135 mln production line recently put in operation at the compa− ny’s plant in Biatorbágy, just west of Budapest. The production line has an annual capacity of one million of the specialty roof panels, designed to resist extreme weather conditions.

www.bbj.hu

06 News

Budapest Business Journal | April 19 – May 02

EXPERT OPINION

Europe still focuses on fiscal tightening Pé Péter SOMOGYI S CITIBANK CIT CE CENTRAL EUROPEAN CLUSTER, IN INVESTMENT HEAD

FIXED INCOME

EQUITIES

n the context of economic downturn and persisting sovereign crisis, Citi analysts expect further volatility in yield spreads in the region. They think that Governments’ primary focus will remain on fiscal tightening which should lead to a further reduction of the Euro Area deficit-to-GDP ratio from 3.3% in 2012 to 2.9% this year. However, they also expect a further increase of the area debt-to-GDP from 94.5% in 2012 to 97.5% 2013. Citi analysts remain concerned by the sovereign debt evolution in the periphery countries and see potential for renewed episodes of spreads increases. Citi analysts think that restructuring will eventually occur in the large periphery countries. Although the type of restructuring scenarios are far from the extreme that is envisaged for Greece, the transition towards that outcome will almost inevitably hold lots of uncertainties for financial markets. On the corporate side, Citi analysts remain positive in the near term as they believe that strong technicals will outweigh deteriorating fundamentals. In particular, they think that the credit market has been conditioned by central banks to assume that any selloff is self-defeating as it will be met with yet more liquidity, with yet more inflows pushing asset prices up again. They forecast that the Investment Grade market in Europe will shrink by another €36bn, a trend that remains supportive for spreads. On the demand side, Citi analysts believe that inflows into credit will be supported by a further shift away from zero-yield investments as illustrated again by the strong demand during the last quarter of 2012. However, they also observe a progressive deterioration of the leverage level of non-financial companies which should eventually cap the spread tightening trend and induce more volatility later.

Citi analysts expect the euro area to remain in recession this year (-0.7% GDP growth) and next. The contraction will be deeper in the periphery countries than the core/softcore countries, but they think that even the members of the latter group will at least flirt with recession. Behind the persisting economic weakness, Citi analysts see in most cases a combination of private sector deleveraging, austerity measures and tight financing conditions producing an undershooting of the already-low growth potential. In that context, the European Central Bank is likely to cut policy rates by 50bps in 2013 and reduce its deposit rate into negative territory. Despite a challenging economic context, the market seems ever more comfortable with the sense that the central banks have now effectively quashed the macro risks for the foreseeable future after the shift in the ECB’s approach from the dogmatic Trichet to the much more pragmatic Draghi. Furthermore, as the German election has drawn nearer, Chancellor Angela Merkel has made considerable concessions on the Greek bailouts and on banking union and recapitalizations. However, Citi analysts think that macro risk will never be far away. On the micro side, Citi analysts see European companies trapped between increasing pressure to take advantage of low funding costs and the perceived reduction in systemic risk on one hand, and too weak demand and capacity utilization on the other hand. In that context, Citi analysts expect 5% earnings-per-share growth this year and 10% growth next. In absence of earnings collapse, they think that valuations with cheap balance sheet multiples and low cyclically adjusted P/Es appear particularly cheap.

NOTE: ALL ARTICLES MARKED E XPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

Strong technicals but deteriorating fundamentals in Credit

Source: Bloomberg

Modest but Positive EPS Growth Expected

Source: Bloomberg

Important Disclosure “Citi analysts” refers to investment professionals within Citi Investment Research and Analysis, Citigroup Global Markets and voting members of the Global Investment Committee and Global Portfolio Committee of Citi Private Bank. This document is based on information provided by Citigroup Investment Research and Analysis, Citigroup Global Markets, Citi Private Bank and Citigroup Alternative Investments. It is provided for your information only. It is not intended as an offer or solicitation for the purchase or sale of any security. Information in this document has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the information, consider its appropriateness, having regard to their objectives, financial situation and needs. Any decision to purchase securities mentioned herein should be made based on a review of your particular circumstances with your financial adviser. Investments referred to in this document are not recommendations of Citibank or its affiliates. Although information has been obtained from and is based upon sources that Citibank believes to be reliable, we do not guarantee its accuracy and it may be incomplete and condensed. All opinions, projections and estimates constitute the judgment of the author as of the date of publication and are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Past performance is no guarantee of future results. Subject to the nature and contents of the document, the investments described herein are subject to fluctuations in price and/or value and investors may get back less than originally invested. Certain high-volatility investments can be subject to sudden and large falls in value that could equal the amount invested. Certain investments contained in the document may have tax implications for private customers whereby levels and basis of taxation may be subject to change. Citibank does not provide tax advice and investors should seek advice from a tax adviser. Investment products: (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations of any insured depository institution (including Citibank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested.

EUROPEAN INVESTMENTS GOOD FOR RISK-TAKERS The seemingly endless economic crisis has reshaped investor habits worldwide, with market participants having to carefully watch where they put their money if they are going to invest in Europe. GERGŐ RÁCZ

Investor confidence has unsurprisingly been shaken by events in the European Union, especially within the eurozone where, aside from the still unresolved question of Greece, other countries have also drifted close to col− lapse and are threatening the monetary union with dissolution.

The troubled times have left a mark on the euro area and have cast the monetary bloc into recession. However, there finally seems to be some hope for a change in the trend, at least in the case of certain optimistic projections. According to the latest eurozone forecast by Ernst & Young, the monetary bloc will be able to return to growth in the second half of 2013. This won’t prevent a contraction of 0.5% of output this year, but will pave the way for growth of 1.1% in 2014 and then 1.7% all the way until 2017. The forecast also sees improvement in other parts of the eurozone economy. Invest− ments will still be down 2% this year but they are set to expand to an annual 3.5% from 2014 to 2017. Household consumption is likewise set to contract by 0.6% this year only to return to positive territory in the ensuing three−year period by an annual 1%. WEIGHING RISKS And although the current mood is anything but good, with the Cyprus situation and mounting apprehension about Slovenia fur−

ther aggravating existing jitters, there are some opinions that suggest if there is any time to invest in the eurozone, it is now. This speculation is based on the assump− tion that investors will benefit from the fact that a large extent of any negative news that may arrive in the future has already been priced in to share prices. Accordingly, any new measures perceived as potentially suc− cessful rescue steps would have a profound effect on shares and increase prices. Considering that several eurozone countries as well as non−eurozone mem− bers of the European Unions have under− gone downgrades to their sovereign rat− ings, they too could present attractive assets if there is indeed a recovery and buying riskier paper pays off. However, investors more averse to risks also have other, far less optimistic scenar− ios to consider. According to UK asset man− ager Invesco Perpetual, the recession of 2012 is set to stretch over into 2013 and is prone to have a more lasting effect. The company’s lead analyst John Greenwood raised con− cerns that the necessary bailout and rescue measures in Cyprus will deplete the banking sector’s resources to such an extent that it will reduce lending throughout the Continent and stifle lending. CHOOSING PATHS For the time being, all eyes are on Japan, where the government has decided on a pro− gram that involves a combination of “print− ing money” and using it to fuel growth on its own, seeing that it hasn’t been able to compel a similar approach from the private sector for years. EU governments are still on the fence about which instruments represent the best approach in addressing the crisis situation. If the Japanese example proves successful it will likely pave the way for a similar course of action in Europe. If the method fails, than the EU will be left scratching its head as to the best approach, trying to decide on a bond pur− chase scheme or give up any hopes of growth, while it is still a very viable scenario that the monetary union will break up altogether. There are increasing concerns that Ger− many, which is inevitably called on to accept a large part of the final bill for saving the euro− zone, is growing reluctant to finance the con− stantly growing expense of helping out trou− bled member states. Whether Germany chooses to back the bond−purchase scheme devised to lead the rescue or exit the monetary union, it should make up its mind soon, according to busi− ness magnate George Soros. He stated that whichever scenario comes to pass, the worst that can happen is for the current uncer− tainty to drag on. In fact, Soros stated that Germany’s departure might actually have favorable effects for the economic environ− ment, since the resulting devaluation of the euro could well allow the bloc’s economy to regain its competitiveness.

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News 07

Budapest Business Journal | April 19 – May 02

SPREADING THE WORD ON THE STARTUP WORLD

ZSOLT BALLA

The founders of LogMeIn, Prezi, Ustream and Seagate Technologies have joined together to establish Bridge Budapest, a non−profit orga− nization that aims to show young people that it is worth both dreaming and making your dreams come true. The group has put together a fellowship program for up to ten graduates to gain knowledge and inspiration from some of the biggest Internet companies in the world. Suc− cessful Hungarian university student appli− cants will be able to spend from one to three months gaining experience as fellows in the offices of Facebook, Twitter or SoundCloud. At the same times, students from around the world are invited to apply for fellowships at LogMeIn, Prezi and Ustream. Postings in Berlin, Boston, Budapest, and, of course, San Francisco, are available to chose from. Bridge Budapest is also offering a special shadow program for journalists, allowing them an insight into the internal operations of successful Hungarian Internet companies and the exciting world of Silicon Valley, and even time with the company founders. The goal is that the journalists would be inspired to report on the Hungarian successes and

“If three of us managed to do it, anyone can do it,” says Péter Árvai (speaking), the president of Bridge Budapest, and co-founder and CEO of Prezi

positive stories, helping to create a more can− do attitude in the country. The founders say they want to prove that worldwide success is possible. LogMeln, Prezi and Ustream all started in Hungary, and entered the global market within a few years. “If three of us managed to do it, anyone can do it,” says Péter Árvai, the president of Bridge Budapest, and co−founder and CEO of Prezi, whose presentation software is used all over the world by 20 million people. Bridge Budapest aims to challenge and change the attitudes of the Hungarian people. “In Hungary we far too often meet people who don’t dare to believe in them− selves. We are well aware that optimism itself is not enough to change the world. However, no development is possible without it. Bridge Budapest is to inspire and motivate young people to dream and make their dreams come true. We know that it is an unusual attitude in Hungary these days, although we also see that it is impossible to achieve your goals without a positive vision.”

Applications for the fellowship can be made until May 6 via the website at www.bridgebu− dapest.org. Talents must fill in a form and make a two−minute video, explaining what the Internet means to them and how they interpret the phrase “everyday hero”. They also need to submit an introduction to them− selves in English. Applicants are asked to indicate their field of interest from computer sciences, marketing/sales, and design, and nominate up to three destinations where they would like to spend their fellowship, which will begin in July. “We would really like to find out the unique and creative solutions the applicants will pro− vide to meet different challenges,” adds Veronika Pistyur, the leader of Bridge Buda− pest. “The selection process has several steps, such as personal meetings, and assignments also help us to find the young people who will share their experience and knowledge gained during the internship with those who do not know about the new opportunities and do not think their dreams may come true, and also that a business can be based on them.”

GOVERNMENT LOWERS 2013 GROWTH PROJECTION

HUNGARY’S ECONOMIC GROWTH

Economy Minister Mihály Varga has announced that the government’s expectations will have to be adjusted to reality and he consequently lowered this year’s growth expectation to 0.7% of gross domestic product, down from previous 0.9%. GERGŐ RÁCZ

The announcement comes as part of Hungary’s updated convergence program newly delivered to Brussels. In spite of reduced outlook for growth, Varga said that the government would not be deterred from keeping its annual 2.7% of GDP deficit target, which should allow Hungary to exit the excessive deficit procedure in effect since 2004 and remove the threat of financial penalties through the withholding of development funds.

While the government seems ready to concede smaller growth than planned, it remains insistent that other targets, most crucially that the budget gap will be lower than the 3% of GDP EU threshold, can be achieved without any further corrections to the budget. This will be the case even if this year’s planned budget revenue goals cannot be fully met, Varga said. Whether the country’s ability to keep the budget gap in check is indeed appreciated by the European Union remains to be seen. The government can now point to the recently published 2012 budget gap, which came in at a surprisingly low 2%, almost a full percent lower than international estimates and even the government’s own forecast. Still, the latest reporting from the International Monetary Fund questions the sustainability of the government steps and puts the budget deficit well above the 3% mark, this year and next. The latest review published by the European Commission also indicated that the deficit would start widening beyond the threshold.

Source: KSH, NGM

The government has remained optimistic about the revenues planned this year, even though there are new measures and taxes where the projections seem ambitious in retrospect. Varga conceded that the transaction levy on the financial sector yielded less in treasury revenues than planned in the first quarter, while other central earnings, such as linking cash registers to a central system to roll back tax evasion or launching the new electronic tolling system all carry doubts. It is mainly for this reason that international organizations as well as the majority of analysts think even the newly revised growth target is too ambitious, and see the actual result being near zero.

Photo: Bridge Budapest

Good ideas, hard work and a bit of luck – all you need to be successful and well known. Hungary could be made more competitive by creative and globally successful young entrepreneurs, or so the founders of three world famous Hungarian companies believe.

A BUBBLING BUSINESS Domestic beer sales in Hungary grew by 1.26% in 2012, despite increasing costs and burdens of production, said Klára Kovács, president of the Hungarian Beer Association at its annual conference. KRISZTIÁN KUMMER

Domestic beer sales in Hungary grew by 1.26% in 2012, though the decrease in overall consumption left its marks on the market as well: sales in the premium and mid−category beers fell primarily. That reflects the price sensibility of Hungarians and a decrease in consumable income. However, sales of low category beers increased. “Last year was hard for the Hungarian beer industry and producers. Domestic sales altogether grew modestly compared to 2011. Growing expenditures due to base ingredients, producing costs and tax burdens are all weighted on producers,” said Klára Kovács, president of the Hungarian Beer Association. The three member factories (Borsodi, Dreher, and Heineken) and one data provider (Pécsi) covers more than 95% of all Hungarian beer production. Member producers’ exports decreased by 43%, and imports increased by 3.25%, however both quantities are negligible compared to overall consumption. The heyday of Hungarian beer consumption was in the 1980s with around 100 liters/person/year; by 2012 this number had decreased to 63 liters/person/year. The number of employees in the sector was1,616 at the end of 2012, 5% less than 12 months earlier. However, through the great number of Hungarian suppliers, the beer industry indirectly employs around 25,000 people, Kovács added. Beer producers paid HUF 65 billion in tax last year, 55% of which is excise tax. Talking about the plans of the association, Kovács mentioned closer cooperation with decision makers such as the Rural Development Ministry and tax authority NAV, tighter self− regulation of members in their communications, and expanding a culture of beer consumption and the idea of responsible drinking.

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08 News

Budapest Business Journal | April 19 – May 02

CENTRAL BANK TO OP E GERGŐ RÁCZ

Just a month into his new post, the for− mer economy minister has declared a greatly different, much more hands−on

STORY HIGHLIGHTS ■

Central bank announces HUF 500 billion to be channeled to supporting businesses ■ Optimally, the scheme could boost GDP by 0.7%

economic growth through supporting domestic small− and medium−sized enterprises. The amount is divided evenly between new loans to be chan− neled through the banking system on one hand, and switching FX−denomi− nated loans to the forint on the other. Matolcsy stressed that companies will be able to apply under exceptionally ben− eficial terms, since the MNB is provid− ing the framework free of interest and the

to HUF 3,600 bln. The utility is highly popular among banks, which can park substantial amounts for short durations while receiving the base rate in inter− est at any given time. The MNB is hop− ing that the new cap will compel banks to loan out the excess liquidity they will now have available since it cannot be deposited at the MNB. TENTATIVELY HOPEFUL The package received moderate to favor− able market reactions. Initially, the forint weakened against the euro to 304 levels but quickly recovered and dipped under the 300 mark. Analysts expressed satisfaction that although had Matolcsy lived up to expec− tations in starting to implement programs

policies and his obviously close ties to the reigning government. “Those who mock Matolcsy are working against Hungary,” the bank− ing association’s recently reappointed chairman Mihály Patai told reporters after discussing the details of the pack− age. Matolcsy presented the planned measures to the top executives of eight of the leading banks. According to a best−case scenario projection by the MNB, the fully suc− cessful implementation of the pro− gram could generate a 0.7% increase in annual GDP. WILL IT WORK? Matolcsy stated that the Monetary Pol− icy Council had carefully weighed all the

Photo: László Beliczay/MTI

György Matolcsy made his first public appearance as central bank governor to announce a set of measures supporting the government’s policy goals of economic growth. The measures are less extensive then expected but still carry an indication of things to come.

CENTRAL BANK MANAGERS MEETING LEADING FIGURES OF THE BANKING INDUSTRY

approach that the National Bank of Hun− gary (MNB) will pursue in the future. “We need a turn towards growth, which justifies the central bank tak− ing steps to support the governments’ employment and growth programs,” Matolcsy told reporters when announc− ing a three−pillar program. The new package involves HUF 500 billion, more than 1.5% of GDP, to boost

banks distributing the funds will only be allowed to claim a 2% margin. Firms will be able to receive the loans to finance new developments as well as to raise co−payments to participate in Euro− pean Union tenders during the program’s time window between June and August. The third aspect of the plan is to reduce the volume of two−week cen− tral bank deposits from HUF 4,500 bln

supporting government policies, the mea− sures announced were not as sweeping as many predicted, or even feared. The program was also applauded by the Hungarian Banking Association, which expressed support not only for the aims of the scheme, but also the new management of the MNB, which had been eyed with suspicion thanks to Matolcsy’s track record of unpredictable

potential risks and benefits from going ahead with the measures. “All risks are within an acceptable threshold,” he said. “I can safely say that the central bank’s new program and its three pillars will together provide oppor− tunities, new opportunities.” Apparently, the main conclusion that the announcement sparked is confirma− tion that the risks inherent to the plans are

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News 09

Budapest Business Journal | April 19 – May 02

P EN THE MONEY TAPS minimal, because the scope of the scheme is limited and there are doubts that the involved parties, especially the banks will be eager to participate. MKB Bank and Erste don’t seem too interested, since they weren’t present at the talks with Matolcsy.

Patai added regarding the potential impact of the scheme. Nomura analyst Peter Attard Montalto also highlighted doubts about the bank− ing sector’s response, seeing that the mandatory 2% margin is narrow, while the

increased potential growth seems vastly over−optimistic to us,” Montalto said. The central bank still has several details to hammer out and will also be looking to hold further consultations with the banking sector over the matter. “In general, it is good

While deputy MNB governor Ádám Balog stated shortly after the initial announcement that the central bank has no further plans on the agenda aimed at directly supporting government plans, there are expectations that the hands−

WE NEED A TURN TOWARDS GROWTH, WHICH JUSTIFIES THE CENTRAL BANK TAKING STEPS TO SUPPORT THE GOVERNMENTS’ EMPLOYMENT AND GROWTH PROGRAMS. “There are no coincidences,” Patai said, without going into details. “It obviously won’t save the world, but the proof of the pudding is the eating and the announcement of the program is in itself a positive development,” ADVERTISEMENT

targeted SMEs are typically the riskiest lending clients who carry the prospect of increasing the share of non−performing loans in a bank’s portfolio. “The MNB’s view of rising cur− rent growth (by some 0.7%) as well as

news that economic policy is once more looking to cooperate with the private sector, the direction is good, but the effects of the growth program are impossible to predict without knowing further details,” Raiffeisen Bank analysts said in a comment.

on method will continue to be a factor. “The true test is still to come, however. We always expected ‘postmodern policy’ to be rolled out slowly and hence we see this smaller package as just a first step,” said Nomura’s Montalto.

BBJ

2Business insight

Bar set even higher for renewable energy

Trends: Companies still vulnarable

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STORY HIGHLIGHTS ■ The average age of the buses is more than 17 years. To eliminate that gap in just a couple of years is impossible. ■ Metro 4 completion is expected by spring, 2014.

While some argue that public transport in Budapest is expensive and disappointing, others claim that many promising changes have happened since the foundation of the Budapest Transport Authority, BKK. We talked with one of the most divisive personalities among Budapest’s leaders, BKK CEO Dávid Vitézy. KRISZTIÁN KUMMER

Q

The Center for Budapest Trans− port (BKK) was established in 2010, however, many people still don’t understand the difference between the transport company BKV and the BKK. What are the main tasks of the latter, and why do we need a transport authority? A: Fully integrated transport authority only works in a few places around the world: London, Singapore, Dubai, New York and in some smaller towns. These cities have begun to deal with the issue that personal traffic and public transport are in fierce com− petition. The fact that people like to drive to work or anywhere else is in conflict with the city’s economic, environmental and sustain− ability objectives. And only a decision−mak− ing body placed above the competing sec− tors, which can make clear decisions on a professional basis and that is able to watch out for the entire city’s interests, to prioritize and to allocate development resources, could manage the situation.

At the fall of socialism in Hungary, the share of public transport was 87% in Budapest. In 22 years, it fell to 55%. This is still a very good rate by international standards, but in order to regulate the transport system of Budapest we had to intervene, and there was a need for an integrated transport authority. The leadership of a city must be aware that many times it’s not lack of money but lack of space that is the problem. On the same street, built in the 19th century, there’s not enough place for a wider pave− ment, parking, a bicycle lane, some terrace area for the bars and cafés, and a line of trees. It’s just not working. A single central− ized authority has to make decisions and prioritizes among the many possibilities. I’ll give you two examples where you can feel the advantage of this kind of approach. One is the traffic lights at Nagykörút. From the 1970s onwards, a green wave system was configured to the traffic lights to serve motoring comfort, despite the fact that only 2,500 people travel by car in one hour in one direction, unlike the 8,000 other people, who travel by tram. Recently this was changed to give the tram a green wave. That way, the journey time of tram No. 4−6 was reduced by two minutes, so we are able to “turn round” the trams faster and achieve higher capacity utiliza− tion. We were able to increase capacity by 7%, without any more electricity usage, or more Combino trams on Nagykörút. Of course, this system is a little more uncom− fortable for the motorists, but the interests of the whole city have prevailed. Another example is the issue of develop− ment. Formerly the management of Buda− pest was not able to make a large amount of resources available for development. Since the creation of BKK, more than HUF 100 billion in non−refundable EU development funds could be involved. All organizations around the EU recognize that our trans− port projects are well prepared, much more professional than previous ones, and much more in line with the EU standards. Obvi− ously, in order to pull in such a huge amount of money since BKK’s establishment, it was necessary to have the support of the govern− ment and the determination of the Mayor’s

Photo: Zsolt Balla

BUDAPEST’S MASTER CONDUCTOR

Office, but it can also be stated that it could not be so without creating BKK.

Q

A huge battle is going on in the mass media and on Internet forums about the very neces− sity for the BKK. One side talks about burning subway trains and buses and huge time delays, the other says that very good progress has been achieved since 2010 in the public transport of Budapest. Who is right? A: I think both sides are right: there are still buses catching fire accidentally, but at the same time a lot of improvements have been made since 2010. Let me outline the problem. There are 1,500 buses in Buda− pest today. In Western Europe, buses are

replaced with new ones every seven or eight years. We are not Western Europe, so let’s say we should change our whole bus fleet over every 12 years. That still means 125 new buses every year. In comparison, the last time a tender was called for new buses was in 2004. Between 2006 and 2010 not a single new bus arrived in Budapest. When we took over the government, the average age of the buses was more than 17 years. To eliminate that gap in just a couple of years is impossible. We immediately started to import used buses from Western Europe as, given the position, this was the most via− ble choice. We would rather buy 100 eight− year−old low−floor buses from Frankfurt, which will serve very well for another six or seven years, than buy 20 new one or refur−

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2 Business

Budapest Business Journal | April 19 – May 02

bish 100 20−year−old high−floor buses with highly polluting engines. We have received many critical reviews for this decision; I still take full responsibility for that. As part of the new operating model, we separated BKV’s commissioning and ser− vice provision roles. In practice, this means that the tasks in which public good should be spent to maximize efficiency and to find the best of those choices available have been passed to BKK, and BKV as a supplier carries out the ordered services. That of course implies that BKV isn’t the only sup− plier who can provide such services. A good example for that approach is the arrival of 150 new low−floor buses from this spring, that are operated by VT Transman Ltd, partly owned by German state railways, and partly by Hungary’s Videoton Hold− ing. The competitive situation in the mar− ket has already shown its benefits, as the vehicle outages rate at BKV went below 2% only with the appearance of VT Transman as a competitor.

CURRICULUM VITAE Dávid Vitézy has been interested in public transportation since his childhood. In 2000, at age 15, he was a founding member of the Urban and Suburban Transit Association (VEKE), since 2002 a board member and transport development team leader, and since 2006 the association’s spokesman. He graduated from the Budapest University of Technology and Economics (BME) Faculty of Economics in 2010, where he studied urban and regional development studies. He has been the CEO of BKK since 2010.

Q

There is talk about the out− sourcing of services in sub− urban towns, where rural transport company Volán could replace BKV and Hungarian railway company MÁV... A: The HÉV commuter train services are not being discussed at present. We imagine them operated as a part of the underground network in the future, so preparatory work is under way in this direction. The current commuter transport nego− tiations you talk about would have no more meaning than whether a sticker of BKV or Volán might be adhered to a 23−year−old bus. The point, however, would be to plan the transport of Buda− pest at a regional level too. For Gödöllő, which you can reach via HÉV, Volán or

MÁV, you shouldn’t have to buy three different types of travel pass. There are great examples of this philosophy in Cen− tral European capitals such as Bratislava and Prague. We are working in Budapest in order to create a similar system.

Q

What kinds of transportation development projects are currently in the hands of BKK? A: Oh, there are many of them. On the one hand, non−EU funded transport development projects in Budapest, such as road and bridge reconstructions. Ear− lier a road reconstruction was about con− crete and asphalt only. Period. Now we evaluate the real needs of people on roads and sidewalks and take them into account during reconstruction. We apply an inte− grated, holistic approach: we take into account the needs of the pedestrians, the users of public transport, the cyclists, the car drivers and whenever possible, the residents living in the neighborhood. This

tracking system in Budapest, we do not know where they are on the road. What we are building is a system based on GPS and advanced communications in order to monitor, and if necessary control, the transport system. This will have a posi− tive impact on the punctuality of buses, trams and trolley buses. In addition, if we had such a control system, we’d been able to give informa− tion to passengers. In order to do that, 263 pieces of information display and monitors built to withstand extreme exter− nal influences are now being installed in Budapest stops. It is also important to improve the foreign language information in Budapest, primarily with English signs and information monitors, but we are also planning to introduce more English−lan− guage audio passenger information on vehicles, as we did on tram No. 4−6. In addition, it is worth mentioning BUBI, a public bike−sharing system. This is an additional service provided to

11

fundamentally we didn’t agree with the concept. Spending HUF 450 billion on a brand new downtown subway line, while network traffic bleeds from a thousand wounds is not wise. On subway lines M1 and M3, vehicles are 40 years old. Thirty− year−old trams and 23−year−old buses circulate on the roads, because in the last 15 years all the investment money was concentrated to build Metro M4. In addition, throngs of mistakes have been made. As a result there are many contractor claims, which we try to set− tle with the largest contractors with the lead of Budapest Mayor István Tarlós. A total of 16 major contractors worked on the project that, pointing to each other and to Budapest City Hall, tries to account for additional costs. This in itself has raised costs by HUF 100 bil− lion. We are working to fix these errors and complete the project by spring 2014. This is achievable: the risk is not technical, but legal.

Q IF SOMEONE CRITICIZES ME BECAUSE OF A PERSONAL GRIEVANCE OR FOR POLITICAL BELIEFS, LET THEM DO IT. I DON’T CARE. is of course more expensive in terms of time and money, but I think, this is the way public money should be spent. Regarding EU projects, the greatest job of this year is the reconstruction of the Nos. 1 and 3 tramlines. Some parts of the lines were last refurbished in the ’80s, so this work is really urgent. Besides, the interconnecting tramlines of Buda are also a major project, connecting Buda in a north−south direction. We are building the track back from Batthyány tér to Mar− git híd and connect that line with Széll Kálmán tér, which will also be renovated as a part of this project. Also, the auto− matic vehicle location and real−time pas− senger information system FUTÁR is very important. At present, there is no vehicle

public transport and works in several cit− ies in the world. I used to say that it was invented for those who would bike, but have no bicycle. The launch is expected in the spring of 2014 with 75 stations and 1,000 bikes.

Q

The citizens of Budapest are eagerly waiting the start of services on the Metro M4, the subway that has been under construc− tion since 2006. When will the project finally be handed over to the public? A: The biggest development under the egis of Budapest involving BKK is, indeed, the construction of Metro M4. This is a large and complex project. How− ever, I do not want to conceal the fact that

We have heard about the introduction of a new, auto− mated fare collection system. A: Yes, this area is utterly important. Ticket services are in the Stone Age with paper−based tickets and passes, non−functioning machines, etc. We called a tender for 300 new ticket vend− ing machines, which accept coins, bills and credit cards too. These are already in line with our new project of a card− based electronic ticket system, based on London’s Oyster or similar systems in Hong Kong and Singapore. We are try− ing to introduce a whole new philosophy in ticket sales and control.

Q

When you were the spokes− man for civil transport orga− nization VEKE, you many times criticized BKV and transport organization in Budapest. Now you very often get criticism from the same place. How do you feel about it? A: Criticism is a good thing if it’s based on facts. We criticized a lot, yes, but don’t forget, I was leader of a working group at VEKE that created the back− bone of the night transport system in Budapest. That system is still function− ing very well. But in this case, I think it’s more personal than professional. If someone criticizes me because of a per− sonal grievance or for political beliefs, let them do it. I don’t care.

Q

You had some confronta− tions last year with Mayor István Tarlós. A: I think the media exaggerated it. Transport in Budapest is a huge busi− ness with a budget of more than HUF 130 billion a year without the Metro M4 project. Of course we have profes− sional discussions every now and then. But for the fact that I could be CEO of BKK despite my young age, I should be thankful for the trust of Mayor Tar− lós. Also, the developments we have achieved in the last couple of years couldn’t have been accomplished with− out the good cooperation between the Mayor’s Office and BKK.

12

EXPERT OPINION

HOW NOT TO CUT CO2 EMISSIONS: THE CASE OF BIOFUELS Péter Simon VARGHA CHIEF ECONOMIST FOR HUNGARY, MOL

NOTE: ALL ARTICLES MARKED E XPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

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2 Business

s the other article highlights, the global financial crisis has further dented the prospects of renewables. However, in some cases renewable policies themselves are so irrational that they would be unlikely to bring a substantial decrease in CO2 emissions even if the external environment were to improve. Take the case of biofuels, for instance. Although biofuels seem like a very pro-green option, both biodiesel and bioethanol are prohibitively expensive, and no one would use them without some form of state subsidy or EU-level regulation. What is worse, they also interfere with the rest of the agricultural sector, pushing up food prices. The exact CO2 reduction effects of biofuels are unclear: some studies show the CO2 savings are actually lower than the Commission mandates. But what ultimately matters is not the level of savings, but the cost at which the CO2 reduction is achieved. The problem with biofuels is that they cost a lot more than fossil fuels: in the EU, for example, they have recently cost 75% more. When we translate this extra spending into the cost of reducing CO2 emissions, we see that cutting CO2 emissions with biofuels is extremely expensive (averaging over 300 EUR/ton in the past years) – compare this to the current EU market CO2 price of below 5 EUR/ton.

There is another implicit (but sometimes even explicit) goal of biofuels policies: to support agriculture. The biofuel mandates create a rent, which will accrue where there is a bottleneck in the supply chain. This is not the ethanol distillation or biodiesel plant, which can (and has been) built by many, but the land where the corn or other feedstock can be grown. So the rent (the extra income rewarding scarcity) will eventually go to the landowner. It is false to think that the policies will benefit many workers in agriculture; rather it will benefit few owners of large arable land, a dubious merit. Overall, subsidizing biofuels is a typical example of a politically attractive, but economically irrational way of combating climate change. What truly matters, in the case of all forms of renewable energy, is technological development to bring down the cost of both the given technology and of CO2 abatement. First-generation biofuel technology (distilling alcohol and getting oil from crops) has only limited potential for improvement, as opposed to other, fast-developing technologies such as solar PV. Therefore, more funding for the R&D of renewable technologies is a much better way of promoting cleaner energy than subsidizing energy production with hopeless technologies.

Budapest Business Journal | April 19 – May 02

BAR SET EVEN HIGHER FOR RENEWABLE ENERGY In the pre−crisis age of plenty, innovative energy solutions were expected to take off and carry the sector into a new age of sustainability and efficiency. However, Hungary’s industry is now suffering not only from a burdened global economy, but also a harsh domestic environment that forces investments and innovation to one side. GERGŐ RÁCZ

Renewable energy has always been somewhat of a fledg− ling niche in Hungary, with the country relying on its tra− ditional sources of power. Despite multiple governments stressing the need to go green over the years, the support and funding to give renewables a bigger cut of the mix were always absent, with any innovation being left to privately owned providers to finance on their own. But now even that is on the wane; any money that might have gone to upgrades has disappeared from the providers’ budgets, thanks to the mandatory reduction of household energy costs pushed through by the government. This, cou− pled with an already tough market, seems to have led foreign players to decide that they should start to pare their losses. Germany’s RWE has announced that as a result of the regulatory changes it will be slashing 50% of its devel− opment framework earmarked for 2013, claiming that the price reduction forced on to what it describes as an already over−taxed industry has pushed its household business into the red. Marie−Theres Thiell, the head of RWE’s Hungarian ELMŰ−ÉMÁSz group, said that the current situation is no longer viable. The same apparently applies to Magyar Telekom which is reportedly considering abandoning its relatively new energy business altogether, much less planning any fur− ther investments. OTHER OPTIONS While previously the government thought it could achieve its goal of greater short−term energy self−reliance for the country through sustainability, it has now realized there is no feasible chance to do so anytime in the near future. Instead, it has decided to place its bets on natural gas. It has already brought the gas assets of German energy group E.ON, and is set to take a majority stake in the MOL group’s storage division, MMBF Földgáztároló Zrt. Furthermore, it has pledged itself to increase the state’s role in gas supply in general, and is pushing all interested parties to get involved in the diversification of natural gas supplies, whether that means latching on to planned or ongoing pipeline investments or establishing new intercon− nectors with neighboring countries to create alternative tra− jectories of gas flow. The state has only provided symbolic backing to innovative technologies thus far. While the National Development Ministry has recently called tenders meant to promote new and innovative energy solu− tions, sustainable methods have yet to come anywhere close to reaching a level of significance. The long−term aspect is also far from green. Consider− ing the high costs of these technologies and the long return on investment when weighed against well−established fos− sil based methods, this state of affairs is hardly surprising.

Instead, the state has committed itself to expanding the capacities of the Paks nuclear power plant, a venture that enjoys the support of most politicians as well as the general public, despite weak protests from environmen− talist groups. GREEN GIMMICK Energy efficiency and sustainable solutions have proven to be a favored crowd−pleaser among property develop− ers, especially in the case of office investments. Tele− nor’s HQ complex and the buildings of Sweden’s Skanska, which makes environmentally friendly designs a signa− ture trait, have implemented various novel solutions. These firms say that conscious implementation has dual benefits, since despite the bigger initial invest− ment it pays off over time in reduced operating costs. Furthermore, such venues are usually appealing to prospective tenants, both as a result of the benefits derived from the operating expenses, and the fact that residing in a low−emission building also helps boost their image as a company. However, the number of buildings constructed with such features has been drastically reduced, given that the entire Hungarian construction industry is in the doldrums.

www.bbj.hu

2 Business

Budapest Business Journal | April 19 – May 02

Advertisements go digital

Firms vulnerable

TV and print ad market suffered the most

Low consumption continues to fuel business collapses

18%

YR/YR INCREASE IN DIGITAL AD SPENDING IN 2012

6.2%

OF BUSINESSES FOLDED IN THE PAST YEAR IN BÁCS-KISKUN

Hungary’s advertising market contracted about 2.9% to HUF 174 billion in 2012, Hungarian Advertising Association (MRSz) chairman Zsolt Urbán said at a recent conference. Revenue from television advertising fell 11.3% to HUF 48.7 bln in 2012 from the same period the previous year, according to data announced by the MRSz at the Médiapiac 2013 conference on Tapolca, near lake Balaton. Revenue from print advertising was down 10.4% at HUF 37.3 bln. Including revenue from subscriptions and newsstand sales, Hungary’s print media market was worth HUF 103 bln last year, according to Hungarian Periodical Publishers’ Association head Tibor Kovács. Dailies accounted for one−third of the total, women’s magazines for 19%, local government newspapers and other free publications for 17%, business and political periodicals for 9%, business−to−business publications for 6% and program and television guides for 6%. The outdoor advertising market contracted 6.2% to HUF 14.3 bln, according to Szilárd Szelei of Out of Home Hungary. New rules banning roadside billboards shaved HUF 1 bln off revenue, he added. As an exception on an otherwise gloomy market, Hungary’s online and mobile advertising market grew 18% to HUF 33.6 bln from 2011, said Péter Novák of the Interactive Advertising Bureau. He predicted that the proportion of revenue generated by the segment would increase from about 19% to more than 30% in just one to two years. One other segment showed a positive trend: radio advertising revenue was up 48% at HUF 6.8 bln, although radio accounted for just 3.9% of the total ad spend. BBJ

The slump in domestic consumption and the overall pressures on the economy have caused the continuation of businesses folding in numerous industries, according to new research by the Bisnode business information provider. Companies are likewise struggling with banks’ heightened requirements when it comes to lending. Between April of 2012 and the end of March 2013, the increase in the percentage of firms folding continued to increase in the areas of food production, beverages and tobacco products, as well as in retail, vehicle trade and hospitality, which proved to be the most notable casualties of the ambient economic environment. The construction industry still has it worst with the highest closure rate of 6.6%, although that does at least show a slowing from the 2011−2012 survey when 6.88% of the industry’s companies called it quits. In a regional breakdown, Pest County and the western parts all saw more closures, showing that the secondary effects of the crisis have now reached the economically more advanced parts of Hungary as well. Last year’s highest county figure came from Bács−Kiskun with 6.2% Bisnode stressed that for the economy in general, the continuing trend of businesses collapsing and certain industries suffering isn’t altogether a negative development. Managing director József Keleti said the adversities on the market entail a cleansing effect, since only companies that are stronger and have well−developed strategies will be able to stay afloat, leaving economic sectors that emerge stronger and less vulnerable. BBJ

ADVERTISEMENT SPENDING

SECTORS MOST AFFECTED BY COLLAPSING (%)

2011

Record high business taxes

EC warns of waning new invest− ments because of tax levels

2.5%

OF GDP COLLECTED AS SECTORAL TAXES IN 2013

A survey by the European Commission has found that the taxes businesses operating in Hungary have to pay reached unprecedented highs this year. The probe researched tax levels in member states in the past 10 years. While business and local taxes have remained unchanged in terms of volume when measured in percentage of overall gross domestic product, special taxes introduced by Viktor Orbán’s government have actually increased. New special taxes have been introduced this year and the amounts payable under existing taxes have increased, despite government rhetoric of lowering taxes by 2013 to boost the economy. Between 2009 and 2013, the volume of collected sectoral taxes rose from 0.5% of GDP to 2.5%. The Commission report stressed that the sectoral taxes have a notable adverse effect on the overall economy, since they limit growth and discourage businesses from investing and expanding. This is true despite the fact that only certain industries – energy, telecommunications and financial firms – bear the brunt of the special tax burden The Commission said that the extra taxes are in large part to blame for the investment rate being at a low of 17% in Hungary, while domestic factors compounded by international economic events have dropped the country 12 places in the competitiveness ranking. The report noted the counterproductive side to levying high taxes on companies that are foreign owned provided the country’s strong reliance on foreign capital. The inhibiting effect of the taxes may also block technological and knowledge transfer into the region, it added. BBJ

DISTRIBUTION OF BUSINESS TAXES

2012

Television Print media Internet Outdoor Source: MRSz

2010

Radio Direct Marketing Ambient Movie

2011

Sectoral taxes Source: Bisnode

13

Source: European Commission

2012

Tax after profit

2013 Local taxes

14

www.bbj.hu

2 Business

Budapest Business Journal | April 19 – May 02

HAVE YOU SEEN THE LATEST ISSUE ALREADY? The print advertising market can now measure how often a single issue is picked thanks to a new research method started by the Hungarian Publishers’ Association (MLE). The Budapest Business Journal asked Tibor Kovács, president of the association, about the advantages of the new method, reading habits and the difficulties the print media has to face. KRISZTIÁN KUMMER

Q

What are the main character− istics of this new method you have introduced? A: Let’s start the story from a little further back in time. Two years ago, we started a new type of cooperation with the Millward Brown research agency. From that moment, we are the owners of collected readership data, and anyone who’s interested in the readership of magazines or newspapers could buy the infor− mation from the consortium. That helped us to move towards a new kind of methodology that helps journal owners and advertisers to position themselves on the market. The most important development is that from now on we measure not just the facts about what kind of printed media a consumer reads, but also the rate, how many times he or she takes one journal in hand. Beside the reg− ular question of readership (“When was the last time you read an issue of the following paper/magazine?”), from now will also have answers and figures for the question “How many times did you take this issue in hand?” This research question gave us a chance to establish CPI (contact per issue) figures, which is a new dimension for the printed ad market, because it represents the perfor− mance of print as a marketing tool.

ADVERTISEMENT

Q

How many times do readers take an issue in hand? A: In our first such survey, we sorted all the journals we measure in to five categories. According to the answers, the rate at national daily newspapers is 2.1, at regional newspapers 1.9, at celebrity magazines 2.8, at women’s magazines 3.3, and at monthly mag− azines 3.8. The first accurate numbers for every journal will be available for partners in our next survey, to be published in May. The results of the regular quarterly research are based on interviews with 25,000 people representing the whole country and show clearly the most important trends in the print media market. The survey is funded by 30 publishers and media agencies, which together control the exercise of all rights and manage the administrative tasks.

Q

For whom might this new indica− tor be important? A: On the one hand, it clearly measures how interesting the content is, how many times it can grab the atten− tion, and is very good feedback for edi− tor−in−chiefs and owners. On the other hand, we can provide very important information to advertisers about the number of “views” of their printed cam− paign. We can reassure advertisers that not only is their campaign worth the money they invest, but also that they reach readers more frequently than pre− viously thought or measured. In Europe, we are the first to regularly cre− ate this kind of survey. Up to this point, a CPI survey was conducted every one or two years, and market players used the data as a refer− ence point for years. We decided to publish this kind of num− ber regularly, because we felt that clients were interested. Measuring the “gross reach”, as we know it, is not unknown in online media or television, and our part− ners have got used to fast and sophisti− cated data feedback. But until now it hasn’t existed on a regular basis. But I must point it out that our number is not

CURRICULUM VITAE Tibor KOVÁCS President of the Hungarian Newspaper Publishers’ Association

equivalent or comparable to the “gross reach” used in television or radio.

Q

How much extra work does this new research require? A: It’s important to mention that we didn’t change the old survey for a new one, but upgraded it. In practice, the readership questionnaire survey is the same, but there’s an extra paragraph about reading frequency in there.

Q

People always talk about the slow death of print media. Is that true? A: It might sound a little bit surpris− ing, but the readership is stable. As president of the association, it hurts to say that the num− ber of copies sold is continuously decreasing, but we can’t contradict the facts. However, the number of people reading the same copy increases, so overall readership didn’t fall dra− matically. On the other hand, the advertising market turns towards online media more and more. According to the latest figures, online media just passed print to reach second place on the ad market behind television. But our numbers clearly show that there’s still adver− tising potential in the printed media.

Tibor Kovács graduated as an engineer in 1991 from the University Pannónia of Agricultural Sciences. He also received a degree in Human Resources Management from the Budapest University of Economic Sciences in 1996. He started his career as a trainer at the Baranya County Labour Centre. From 1996 he worked in the Ministry of Labour. In 1997 he became human resources manager of Pécs Waterworks and from 1998 he held the post of HR director at Clarion. He started to work at Ringier Publishing Ltd. in 1999 as a human resources and corporate communications director. Later, within the company, he became managing director of Nemzeti Sport and Mai nap and from 2005 completing the group with Blikk he managed the whole newspaper division. He is the president of the Hungarian Newspaper Publishers’ Association since 2011.

BBJ

3Special Report Big employment boost still far away 16

HR

Outsource call centers: No missed calls around

 18-19

Zeros and ones still equal big bucks 26

16

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

BIG EMPLOYMENT BOOST STILL FAR AWAY One of the core principles of Prime Minister Viktor Orbán’s government is to dramatically increase the number of Hungarians living from work rather than welfare. While eligibility for aid has been curbed over the past three years as an incentive, overall unemployment has remained stubbornly high, and key sectors of the economy are declining. GERGŐ RÁCZ

Premier Orbán prides himself in the fact that the number of employed Hungarians has increased beyond the 3.5 million mark during his term, an increase of around 1 million since 2010. The latest figures from the Central Statistics Office (KSH) for the December−February period also showed an increase of 23,000 on the year. However, another indicator, overall unemployment isn’t dropping. In fact the latest statistics have shown an increase in the overall joblessness rate to 11.6%. The same KSH dataset measured unemploy− ment at 11.2% in the December−Febru− ary span, meaning it had risen 0.4% from the November−January survey and more than 1% compared to last summer−autumn, when seasonal effects normally bring a spike in employment. “While the 11% unemployment rate is acceptable, it has to be noted that this fig− ure only covers those who are registered as unemployed. According to estimates, only 55% of the active age population works,” said Sándor Baja, head of recruit− ment firm Randstad. The government has taken several mea− sures with the aim of boosting employment. These include widening the scope of exist− ing community labor programs, making work a prerequisite to receive money from the state, thus replacing social subsidies with paychecks. A January analysis from think tank Policy Agenda estimates there will be around 330,000 people participat− ing in the program by next year. There has also been a narrowing of the scope of some benefits, such as abol− ishing early retirement for emergency responders, forcing them back on to the labor market. SKEWED NUMBERS According to former prime minister Gor− don Bajnai, head of the opposition Együtt

STORY HIGHLIGHTS ■

Unemployment stuck above 11% despite growing numbers of workers ■ Young people, especially the qualified, are leaving the country in growing numbers

2014 political group, the government rhet− oric of success is misleading. He argues that the employment figures are rising largely because of distortions, like com− munity employment and part time jobs in the public sector that don’t generate added value. He said it is also common for survey respondents to include unreg− istered seasonal workers (who don’t gen− erate taxes for the state) in the research, as well as registering family members as “employed” who are indeed working, but in a different country. The latter issue has become a key con− cern not only at an economic but also on a political level. Former economy minis− ter György Matolcsy, now central bank governor, spoke of 500,000 Hungarians who have left the country seeking bet− ter opportunities. There is no way to con− firm this number, since there is no proper registry. People abroad often work off the books and they also regularly neglect the requirement to signal their interest to emigrate. The labor market, nonetheless, confirms the existence of the trend. This tendency is hardly surprising when one considers the statistics for the younger generation. In the 15−24 year old category, the KSH recorded a 29.2% unemployment rate the last time around, and the indica− tor has continued to hover around the 30% mark since last spring, having risen 3.5% since the spring of 2010 when Orbán’s Fidesz party came to power. Although the age window is somewhat deceptive since it includes school−going years, it is a strong indication of the issues people have to face having just completed their studies in either secondary or tertiary education. This high level of unemployment among young people is also costly for the national economy. The latest figures from Eurostat show young persons’ jobless− ness is costing the country 2% of its gross domestic product. ON THE GO Recruiters surveyed by the Budapest Business Journal confirmed the trend of prevalent migration, especially in the case of certain marketable professional skills. Observers, especially opponents

THE LATEST FIGURES FROM EUROSTAT SHOW YOUNG PERSONS’ JOBLESSNESS IS COSTING THE COUNTRY 2% OF ITS GROSS DOMESTIC PRODUCT.

www.bbj.hu

17

3

Budapest Business Journal | April 19 – May 02

EXPERT OPINION

NUMBER OF EMPLOYED HUNGARIANS

Source: Bisnode

Z, seek jobs abroad,” said Katalin Feleki, head of permanent placement services at the Work Force recruitment firm. “Although the government is confident that work in other countries is a temporary state when young people acquire new skills that they can put to use upon their return, these peo− ple are less attached to their home country, they have different priorities and there is no guarantee that they will come back, even if that is what we are hoping for,” she added.

NO BUDGE IN THE PRIVATE SECTOR The painfully obvious lack of new hiring is also very much present in the private sector. According to data provider Bisnode, there was only one month in the past 12 when the number of registered employees exceeded 2.6 million, based on registrations at the tax authority. In Budapest, the number of registered employees is stagnating at around 1 million. In contrast, Nógrád county saw months where there weren’t even 20,000 people in a job. Bisnode’s managing director Sándor Keleti said the silver lining to the stagnation is that the situation isn’t getting any worse. The largely unchanging numbers indicate that businesses have already implemented any streamlining in terms of their headcount and are currently in a wait-and-see mode, their hiring decisions pending developments in Hungary as well as the eurozone. In a regional comparison, there hasn’t been any change in any of the counties, meaning the market remains locked in a state of stasis.

SOCIAL MEDIA POLICY: MINIMIZING THE RISKS The use of social media by employees and its impact on the reputation of the employer has become a hot topic. During the past several years the number of social media platforms and their users has increased significantly, due to technological progress, like the introduction of smart phones. Meanwhile, employers are losing control over their employees’ communication during working hours.

Levente Csengery Head of Employment

Rita Párkányi Associate

THE USE OF SOCIAL MEDIA IN RECRUITMENT PROCEDURES The ‘average’ social media user shares his personal data with the public on social media networks without considering its possible impacts. Even if awareness of social media users about their privacy settings increased significantly, privacy settings remain complicated and can usually be subject to unilateral modification by the service providers. Statistics show that before the first interview, HR specialists usually perform background checks on social media sites on the applicants. It is considered that the potential employers can reasonably assume that the candidates are aware of their privacy settings and therefore have consented to make available their personal data appearing on these social media sites. Therefore, when determining the data the employer can access, the applicant’s privacy settings will have a great importance (the courts would probably also consider the above mentioned uncertainties related to privacy settings). It is to be noted, however, that the potential employer, when deciding on the recruitment, can only take into account information which is relevant to the employment.

aware of the fact that their actions made outside their working hours might influence their employers (their business interests, reputation, etc.) and therefore such actions can be prohibited or restricted or might entail sanctions by the employer. Regarding the freedom of expression, under the new Hungarian Labor Code, employees may not exercise their right to express their opinion in a way that may seriously jeopardize or damage the employer’s reputation, or legitimate economic and organizational interests. The above described statutory rules set up general principles and guidelines. It is, however, for the Hungarian courts, to assess on a case by case basis the borders of the employee’s freedom of expression and the legitimacy of its restriction by the employer. We might expect that courts will examine in particular the employee’s function and his position within the organizational hierarchy; because the interpretation of an opinion and its influence on the employer’s reputation strongly depends – among others – on the person who expressed it (e.g. general managers or PR managers can probably more seriously damage the employer’s reputation by their opinion than other employees).

RESTRICTING AND MONITORING THE USE OF SOCIAL MEDIA BY EMPLOYERS Social media is an important platform for the expression of thoughts, ideas and opinions. Opinions that can be related to employment might have an important impact on the employer’s reputation as well. For this reason, employers are aiming at restricting, controlling and monitoring to the greatest extent possible by law the opinions published by their employees on social media in order to protect their legitimate economic interests. Based on the principles set by law, judicial practice should find the balance between the different interests of the employees and the employers. As a general principle set by the new Hungarian Labor Code, the employee might not jeopardize the legitimate economic interests of his employer. In addition to that, the Labor Code acknowledges that the employee’s conduct performed outside his working hours might jeopardize the employer’s reputation, legitimate economic interests or the purpose of the employment. This means that employees have to be

THE SOLUTION: REGULATING THE USE OF SOCIAL MEDIA BY INTERNAL POLICIES Internal social media policies might help employers to protect their legitimate economical interests by increasing employees’ awareness on the potential risks of social media usage (e.g. disclosure of confidential information, posting negative opinions about the company). Such policies might set guidelines for the employees on the appropriate use of these platforms and also sanctions for breaching them. We consider that such policies serve as effective tools helping the employers to mitigate risks and prevent damage.

www.gide.com

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

of the Fidesz cabinet, attribute the large number of departures to a failure in gov− ernment policies. In contrast the prime minister has shrugged off concerns and considers the trend a positive development, since work−seekers can expand their exper− tise, which they can then put to use once they return home. “If we are elected for another four years at the next elections, then in six years this will be a country where everybody will want to come home to,” he said last autumn. However, his confidence about the wave of young Hungarians sporting new skills returning home is far from being seen as a certainty. “A growing number of these younger pro− fessionals, members of generations Y and

18

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

NO MISSED CALLS AROUND STORY HIGHLIGHTS ■

Orders shifting towards customer service from telesales ■ Quality is important, prices are declining ■ Market players are still optimistic

The outsource call centers’ market has been hit by the crisis, just like every other area, but the effects of the difficulties have also resulted in the industry becoming cleaner and more transparent. While the main activity of service providers still consists of outgoing sales calls, there is an increasing demand to accept incoming customer service calls as well. ZSOLT BALLA

“Telesales is still the primary activity our company is involved in, both in cases where we are required to complete the sales process either with a recorded voice contract or with an order for delivery, and when we are gen− erating leads for our customers by arrang− ing appointments so that the sales person− nel of the company can finish up the deal,” explains Botond Csordás, partner and man− aging director at Job−Group’s Tele−Scope division, which is specialized in outsourced call center activities. He says that on top of this traditional business, there is a growing market of handling incoming customer ser− vice calls, both in Hungarian and in English. “Although we see increasing demand in this area, I wouldn’t say that this is equally true of the entire market, as it might be only us fac− ing these requests,” he adds. ADVERTISEMENT

“The top hit at the moment is cost cut− ting – moving call centers to the country− side and cutting back costs wherever pos− sible,” adds Tamás Bozsó, commercial and business development director at Proto− call. “Although the pace of market growth has slowed due to the crisis, the ratio of sales calls to customer service is chang− ing in favor of the latter. The main focus is to keep existing clients rather than acquir− ing new customers, which is a result of the decrease in business potential,” he sums up the developments of recent years. “The use of cloud solutions is becoming more widespread, although some questions still arise and the frameworks of these proj− ects are not always easy to see,” says Róbert Csákvári, managing director at Work Force Kft, adding “on the other hand, these solu− tions are affordable, comfortable and pro− vide our customers with the flexibility that is often required”. According to the director, keeping current customers is a lot more in focus than it was some five−ten years ago. Another industry trend is the more fre− quent use of technical developments in improving service quality. Call centers are becoming contact centers by using more advanced technologies, which allow them to expand their services into various new channels. An interesting, albeit still experimental area in these developments is the use of voice and emotion−recognition software. MAINTAINING QUALITY “IT developments exist on the market, but recently they don’t necessarily get incor− porated into everyday operations,” says Bozsó, adding that few Hungarian compa− nies can afford substantial developments and that the gap between the Hungarian and West European market is widening in this respect. While technical developments are required to stay in shape in a compet− itive area, “traditional” ways of main− taining service standards cannot be

ignored. “Staff turnover is inevitable in an area like that of call centers, although the pace of turnover is still the ultimate benchmark of quality services,” states Csordás, claiming that Tele Scope is way above the industry average from a staff stability perspective. “Transparency in our operations gives the necessary secu− rity to our staff as well as to our custom− ers. Our wage scheme includes a normal base salary, which is complemented by an approximately 30% of commission. In an industry that continuously moves towards purely commission−based pay− ment patterns, this formula is predict− able and secure, with sufficient transpar− ency that guarantees to keep employees in certain months when commissions alone would not allow them to make a living,” he explains.

“We are not a factory, not a conveyor belt, we don’t employ students, and although it results in higher operational costs, and higher service prices altogether, I can say that it pays off not only on the long run, but even in the mid−term, if a customer is con− cerned about the competence his products or services are treated with,” he adds. His words seem well supported by the fact that in 2011, when Tele−Scope entered a GFK Research Institute competition, it won the Call Center of the Year award. While customer−focused developments are underway, the crisis, and the taxation changes of recent years, has clearly had negative effects on the industry as well. Among these is a shift back towards the “graying” of the industry, with some ser− vice providers employing staff on semi− legal terms. Industry transparency is also

3

Budapest Business Journal | April 19 – May 02

COMPANY, WEBSITE

JOBGROUP www.jobgroup.hu

eSense Human Resources Szolgáltató Zrt www.esense.hu

CALL CENTER, WEBSITE

OTHER ACTIVITIES

EXECUTIVE(S)

Tele−Scope www.tele−scope.hu

Recruitement, temporary employment, advertising, HR outsourcing, integration of disabled employees, HR−branding

eSense www.esense.hu

Temporary employment, training, consultancy

Protocall www.protocall.hu

National courier service, registered with Béla Ignácz PSzÁF, analysis of market research and polls, Csongor Juhász mailing and warehousing base, event manage− Sándor Zakor ment, creative planning, marketing support

Protocall Kft www.protocall.hu

SzondaPhone Kft www.szondaphone.hu

SzondaPhone www.szondaphone.hu

SYKES Enterprises Inc. B.V. www.sykes.com

Sykes Közép Európa Kft www.sykes.com

Transcom WorldWide S.A. www.transcom.com

Transcom Hungary Kft www.transcom.com

harmed by a move towards purely commis− sion−based payment structures that expose both service providers and their employ− ees to greater−than−necessary risks in their everyday operations. A beneficial effect, however, was the “clearing out” of the industry. “A few com− petitors have reacted slowly, and there− fore felt the impacts of the crisis only later, when the volume of orders started to decline, or when customers started to face difficulties in their payments,” recalls Csákvári. “This results in some service providers being forced into new business models, most prominently the use of out− sourcing at companies that traditionally had internal solutions to their call center needs. This, of course, provides us with new potential,” he adds. “There is a natural selection among companies, and this is not necessar− ily based on business competencies, but among those who remain on the market, there is a visible ‘cleaning’ process,” Csor− dás agrees. “Serious market players seem to tend towards a cooperative business philosophy rather than towards cut−throat competition, and although from time to time there are attempts to compete using unrealistically low prices, these never last too long, nor do the companies that try to employ them,” he observes. MARKET PURIFICATION “The volume of orders has dropped, and what we could see as a result was a typi− cal ‘market cleaning’,” Bozsó says, claim− ing that weaker companies, and those that were established for one specific proj− ect, had to close their operations in most cases. But he believes another type of cleaning, an “ethical purification”, is also much needed on the market. While the most active customers of out− source call centers remain companies

HEAD OF CALL CENTER

CALL CENTER ADDRESS, PHONE, EMAIL

Attila Dobár Botond Csordás

Botond Csordás

1134 Budapest Róbert Károly körút 61– 65 (1) 434−7800 info@job.tele−scope.hu

Dénes Osztroluczky Szabolcs Jakab

Tünde Ostorházi Gábor Szabó

1134 Budapest Kassák Lajos utca 69–71 (1) 555−1585 esense@esense.hu

Tamás Bozsó Anita Metz

1146 Budapest Hungária körút 140–144 (1) 432−1230 protocall@protocall.hu

Kálmán Felvinczi

1096 Budapest Thaly Kálmán utca 39 (1) 467−5517 info@szondaphone.hu

–

David E. Grim

Beáta Barna

1116 Budapest Hauszmann Alajos utca 3/B (1) 382−1000 sykesAUSfinancialservices@sykes.com, request.dnc@sykes.com

Online publishing, temporary employment, IT activities, business consulting, advertising

Regimantas Liepa

Larisa Medic

1117 Budapest Budafoki út 91–93 (1) 336−5000

–

that operate in the “traditional” call cen− ter areas, most importantly in the finan− cial and the telco sectors, there are also new prospects ahead, industry experts agree. FMCG companies, and particularly the food segment, is relatively new among the customers of call centers, and so are e−commerce companies that require 0−24 (in some cases multi−lingual) helpdesk services as well as solutions to take orders. There is a substantial lag in the partici− pation of healthcare companies, and as industry players often highlight, there is a huge potential in the state sector as well. It is not so much the question of money, the bottleneck is more often a lack of interest or business competence on behalf of the state service providers, it seems. As long as people will utilize the “yellow−check” payment system, regardless of the time spent waiting at post offices, the demand for more advanced and more user−friendly solutions will likely remain weak. Despite general difficulties, serious mar− ket players still remain optimistic about industry trends and the potential growth of their companies. With new prospects in view, they can also focus on improving their service quality. “Outsource call centers con− stantly follow the evolution of client require− ments, changes in the market environment and technical developments. Video call centers is one of the potential directions with increasing market demand in Western Europe. We also have to think about how we can make better use of the potential pro− vided by smartphones and social media in the future,” Csákvári opines. Bozsó also believes in looking ahead. “Modernization, the implementation of international best practices, IT develop− ments, cost optimization, and last but not least HR developments and the mainte− nance of a quality workforce are the way forward,” he concludes.

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19

THE LIST OF CALL CENTERS IS BASED ON THE BUDAPEST BUSINESS JOURNAL’S OWN SELECTION AND AS SUCH IS NOT A FULLY COMPREHENSIVE ONE. FOR A MORE DETAILED LIST, PLEASE SEE THE 2013-14 EDITION OF THE BOOK OF LISTS.

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20

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3

Budapest Business Journal | April 19 – May 02

A HIGHER EDUCATIO N Is the tuition fee a necessity in Hungary? Will Hungarian universities go bankrupt due to budget restrictions, and the quality of education fall further from the not too high present levels? These were the main questions takled by speakers of the conference “Befektetés or kifektetés” (Investment or bleeding out) on the future of higher education tackled. KRISZTIÁN KUMMER

The government is trying to solve prob− lems that it has created for itself during the last few years, education researcher Péter Radó said. At most of the Hungar− ian colleges and universities, the edu− cation doesn’t meet the requirements of good education: a rich, flexible, interop− erable program; a learning−intensive pro− cess and good relevance of the knowledge acquired, he said. ADVERTISEMENT

The government announced in Decem− ber 2012 that state support for higher edu− cation institutes would shrink by an aver− age of 25% in 2013. The income from state budget covers only 57% of staff expenditure, therefore lay offs have started and the qual− ity of education is falling, professor István Polónyi from Debrecen University said. Due to the effect of the layoffs, restricted budgets might cause bigger problems than at first seems. In Hungary, smaller (rural) institutions participate in adult education to a much higher degree than the well−known universities. If their financial support is cut, adult education will fall back dramatically. While the government tries to imple− ment a tuition fee−based system, and encourage students to take a student loan, the interest rate supporting these loans – around HUF 60 bln yearly accord− ing to government’s plans – would equal the restrictions introduced last Decem− ber, Polónyi said. Hungarian higher education selects from a very shallow pool: 80% of all uni− versity and college students come from just 35% of all high schools. It is decided in the first classes of elementary school –

and not in high school – who will attend college and who won’t, said university lecturer Edina Berlinger. It is not only a question of money, but also a question of availability, and the government’s edu− cation system often leads to segregation and the further deepening of a “cast sys− tem”, she added. In line with the EU, Hun− gary has changed to the Bologna process, however, the fine adjustment of the sys− tem hasn’t been finished and indeed has stalled overall since the change of gov− ernment in 2010. Many students choose to finish university at BA level in three or four years and a significant proportion of the 19,000 MA places are vacant. Loud student protests have greeted the idea of “röghözkötés”, where the government wants to force graduates to stay in the country rather than work abroad for a certain number of years if their university studies were state−sup− ported. Representatives of student bod− ies HaHa, which has organized many of the protests, and the student municipal− ities association HÖOK, were invited to the conference, but declined to accept. HÖOK, meanwhile, has already signed an agreement with the government.

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

Photo: András Hudecz.

O N, REALLY?

SHORT OPINION FROM LAJOS BOKROS, EP-MEMBER, PROFESSOR AND EX-FINANCE MINISTER “Of course, I don’t agree that higher education institutions get even less from central budget sources, but what is more important to me is the funding structure and to what degree of freedom these resources could be used. If the aim of the government is to eliminate academic freedom in institutions of higher education and to financially squeeze them in a sort of monolithic and top-conducted concern, I could not welcome such a system, even if it would otherwise pump in more public money. It is extremely important to the Hungarian higher education institutions to restore academic freedom because without it, there is no competition and without competition there is no improvement in quality. In addition, other factors are also important in improving the quality. The state doesn’t have to solve financial and quality issues in higher education; the tuition fee’s exact goal is that students begin to demand quality. The government is lying when it won’t dare say the tuition fee is an expenditure that is unavoidable for the vast majority of students. It is not a question of whether a tuition fee is good or bad, but who are those who are exempt from its payment. Today the better-off children of higher social classes are admitted to state-funded education, while children from the lower-middle class in demanding conditions only have access on a fee-paying basis. The solution I would see is that there is no state-financed education, everyone pays tuition fees, universities pick up the most talented and only those who by their results are really worth it receive exemption from tuition fees.”

21

22

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3

Budapest Business Journal | April 19 – May 02

FAIR ENOUGH While the online coverage of the job market is continuously increasing through job−portals and various social media outlets, there exists (and will continue to do so) a solid area where technology cannot replace personal contacts, industry experts say. Job fairs aim to target just that by creating an opportunity for companies to meet potential talents and for job seekers to find vacancies that might suit them. ZSOLT BALLA

“The fact that personal meetings can not be replaced by online technology is well dem− onstrated by the number of visitors at our job fairs each year,” says Andrea Bogárdi− Mészöly, marketing manager at Friss− diplomás Kft, the organizer of the renowned HVG job fairs. “Our two job fairs are visited by some 10−12,000 people each spring and fall,” she explains, adding that targeted visi− tors usually seek personal consultations, and plan well ahead those companies that they want to meet with at the fair. Companies, on the other hand usually arrive with existing vacant positions, and while most interviews are directed towards these vacancies, there are exceptions. The idea of not having an exact position, but offering something to a person who seems particularly suited to your company anyway, is not unknown.

The timing of job fairs self evidently matches the usual hiring seasons of most companies, and with many competing fairs around, an actively participating firm could attend job fairs on a weekly basis from the end of February to late April, and similarly from September to November if it has the will (and budget) to do so. While the market is dominated by institution−run fairs, with those organized by Budapest Corvinus Uni− versity (BCE), Budapest University of Tech− nology and Economics (BME) and Óbuda University leading the way, there are a few independent fairs, the biggest hallmarked by economic weekly HVG. “A normal job fair would feature some 5,000−8,000 vacant positions, but of course,

there can not be an exact match between the vacancies and the audience,” says Bogárdi−Mészöly. “We see that most com− panies still seek fresh graduates or interns, but there is a visible shift towards a more experienced workforce,” she explains. In the case of entrants, the quality of the diploma is becoming more important (even over the result or the actual subject), but for older candidates previous work experience and language skills are of foremost importance. This seems particularly true of the growing number of shared service centers that are present in Hungary, offering their services on a regional or global basis. A job fair undoubtedly highlights market tendencies that have been well known for a

long time, like the general lack of engineers and other technical professions, or the lav− ish abundance of media and communica− tion workers, lawyers and economists. “Our job fairs are dominantly focused on compa− nies trying to find applicants and vice verse, but we also offer something to those who think long−term and seek further education as well. Usually some 10−15% of our exhibi− tors are language schools, universities and other institutions offering degrees, edu− cation or training of some kind,” Bogárdi− Mészöly points out. So while public educa− tion may not be well aligned to job market demands, it is never too late to alter your path towards a more straightforward and successful career.

EXPERT OPINION

WHAT YOU HAVE NOT EVEN THOUGHT OF WHEN IT COMES TO THE LABOR CODE CHANGES Júlia VARGA Managing Director

At the start of 2013, the Hungarian Parliament launched the new Labor Code and other tax provisions which have presented several challenges to payroll departments operating in Hungary. n order to prepare for such challenges and get familiar with the enforced changes, TMF Group in Hungary have consulted numer-

ous experts, attended presentations and trainings, and have subsequently updated their payroll system. The software administrator used to provide one or two-page summaries but now it produced an eight-page concise description. One of the anomalies is the absence-fee calculation. The interpretation of this part of the Code is different amongst the Hungarian authorities, tax advisors, legal advisors and other payroll experts. The payroll service providers, company employers, and advisors operating in the Hungarian market may choose which interpretation they follow. Most software administrators comply with the interpretation of the Ministry, which does not always provide a clear explanation to some aspects of the Labor Code. As a result, and in the case of the absencefee calculation, this has caused some confusion. There is no justice, but uncertainty among the various interpretations.

Consequently, some companies have taken the risk of ignoring the new regulation in this regard and continued to apply the previous absence-fee calculation regulations. (This option was, however, only available if the collective bargaining agreement had been modified accordingly.) Unfortunately other employers, service providers and software developers could be faced with legal action and the outcome of such legal proceedings could be doubtful. It is clear that other changes have also been problematic, for example some of the new social contribution allowances can only be applied retroactively which calls for time-consuming manual work in the system. However, based on the information available to TMF Group, it appears the previous regulations on the settlement of working days and holidays will be put back into force during the summer of 2013, though not with retroactive effect.

TMF Group is a leading global provider of highvalue business services to clients operating and investing globally. We focus on providing highly specialized and business-critical financial, corporate secretarial and HR administrative services that enable our clients to operate their corporate structures, finance vehicles and investment funds in different geographical locations. With operations in more than 75 countries, TMF Group is the global expert that understands local needs. We can provide you with a single point of contact to coordinate the day-to-day management of your outsourced operations, and ensure clear communication across multiple jurisdictions. Global reach, local knowledge: helping you do business seamlessly across borders.

TMF Hungary Ltd. Wesselényi u. 16., 3. em. 1077 Budapest T. +36 1 461 31 00 julia.varga@tmf-group.com www.tmf-group.com

www.bbj.hu

GERGŐ RÁCZ

The downturn in Hungary’s economy has left many segments in a desperate situation, but a handful of industries are thriving and constantly looking for new workforce. The dominance of IT and the growing role of professions linked to the automotive and electronics industries are giving those with the necessary qualifica− tions all the best opportunities. “Qualified professionals with experience and familiarity with foreign languages are easily hired and demand far outweighs sup− ply,” said Katalin Feleki, head of permanent placement services at Work Force. These industries are snapping up the best the field has to offer and the pool is getting smaller. IT professionals are far more willing to take on jobs abroad than the average worker, even though there are still sometimes issues with their fluency in foreign languages, said Tímea Bíró, managing director at Focus Consulting. The same can be said of all the most− hyped segments. As a result, the value of the existing stock of professionals has significantly increased, putting them in a very strong bargaining position. Feleki said that potential employ− ers are often thoroughly surprised when they are faced with the terms a promising candidate can and does demand, which also poses a challenge for recruiters. Bíró adds that the technical bias on the market is also present in the case of posi− tions that don’t require tertiary degrees. For instance welders and forklift operators are also high in demand, to the extent that many of them can easily find jobs abroad, leaving yet more unfilled demand on the domestic market. “In the IT sector, there is tradition− ally a scarcity of workforce. Our clients are aware of this and accept it,” adds Tammy Nagy−Stellini, managing direc− tor of Hays Hungary. SSC, THE THREE MAGIC LETTERS The area that holds the most immediate employment potential is that of shared service centers, which continue to expand in Hungary, both in size as well as significance. “SSCs employ 30,000 to 40,000 people with the potential to create thousands of more jobs,” said Sándor Baja, general man− ager at Randstad Hungary. He stressed that they hold that they are prone to substan− tially impact the national economy in gen− eral, and encouraged the government to get more proactively involved.

The heightened demand for workforce is such that standards are being lowered to the point that even jobseekers who don’t necessarily meet the textbook job criteria have a genuine shot. As Feleki notes, scarcity has lowered standards and companies are willing to hire candidates based purely on the fact that they know a foreign language, even if they don’t have any prior experience. Central Europe in general is proving an appealing region for companies to build an SSC or expand the operations they already have in place. Consequently, competition among countries is also growing fierce. “Last year, we saw intense regional competition to host new SSCs with Romania and Poland. This trend will likely continue this year as well as in the years to come,” said Nagy−Stellini. Randstad’s Baja agreed, pointing to Poland as Hungary’s biggest rival, but also noted challenges from Bulgaria, Czech Republic and Slovakia.

COPING STRATEGIES Given that overall the market is under pressure pushing prices down, recruiters are trying to seek out different strategies to fuel their growth. Randtad is focusing more on executive search and helping companies outsource their recruitment process. Work Force is concentrating more on the headhunting aspect of its business to achieve more targeted results, while Focus Consulting is trying to adjust its practices to the growing migration trend and is seeking out opportunities for Hungarians abroad. In contrast, Hays is sticking to its core business and is instead trying to keep busy through better preparation and in managing its efforts to keep projects in the pipeline.

EXPERT OPINION

HAYS HUNGARY LAUNCHES 2013 SALARY GUIDE AND MARKET OVERVIEW Managing Director Tammy Nagy-Stellini summarises the key sector-by-sector trends. T Tammy N NAGY-STELLINI M Managing Director H HAYS HUNGARY

CCOUNTANCY & FINANCE Although professionals are reluctant to move, recruitment activity for top finance talent remains steady, particularly in the manufacturing, shared services and pharmaceutical sectors. Budapest and the central/western regions continue to attract investment in manufacturing, which has resulted in an increased demand for senior finance experts. Those with pharma or FMCG backgrounds are highly sought after. Given that the majority of Shared Service Centers (SSCs) focus on finance related processes, this makes the sector especially attractive to junior candidates. Elsewhere, recruitment in the private banking sector remains muted. BUSINESS SERVICES This is the biggest market segment for foreign language speaking fresh graduates and junior professionals in Hungary, primarily in the areas of finance and accounting, customer services, IT (helpdesk and development) and, to a lesser extent, sales, procurement and HR support. Suitably qualified candidates are in a strong position as companies try to secure the best talent, which drives up salaries. Senior professionals are increasingly expected to take on regional responsibilities and need to demonstrate a previous track record in business development. ENGINEERING Automotive, electronics contractors, consumer electronics and metal fabrication are the most important areas in this sector. Automotive continues to hire high numbers of engineers, for example quality engineers, electrical engineers and production specialists for their plants in western and central Hungary. There is strong demand for experts with 1-3 years’ experience who speak good English and these individuals can expect a 20-30% salary rise on average. Remuneration will also reflect the need to relocate. Although salaries are marginally lower than automotive, the electronics sector continues to perform well. Metal fabrication is also enjoying good growth with companies looking to hire both graduates and experienced professionals. LIFE SCIENCES The dramatic salary increases witnessed in clinical research slowed down in 2012 due to an excess supply of jobs. However, remuneration is still competitive regionally, in contrast with pharmaceutical commercial operations positions. Salaries for medical devices have remained at 2012 levels. For

high value products, such as imaging diagnostics, professionals can expect a higher rewards package than in the consumables and disposables sector. The variable nonmonetary financial aspect is increasingly important to entice professionals, particularly in medical and regulatory affairs. Those in non-field positions value flexible hours and homeworking, which are becoming ever more important in attracting top talent. SALES & MARKETING AND LOGISTICS Although salaries for brand managers at major FMCG companies have fallen, the demand for professionals with sales or trade marketing backgrounds has risen. We have also seen a growing need for category and trade marketing managers. Remuneration for sales roles largely depends on the industry and on technical qualifications. More senior positions command higher salaries and a lower variable component with company cars standard for senior salespeople. In the logistics sector, the variable component is not common and professionals who speak English or German fluently can expect better career opportunities and higher salaries, both in this and the sales sector. RETAIL Demand remains steady right across the board, from sales assistants to country managers. Major retail developments have stalled and some smaller fashion retailers have closed their operations or downsized, concentrating on their flagship stores. However, the dominant players in fast fashion are continuing to expand. While experienced and well-qualified retail experts are in demand, there is a general lack of high caliber specialists. Clients usually ask for higher education and English fluency for mid-level retail positions. INFORMATION TECHNOLOGY Specialist IT experts are highly sought after by employers and this is set to continue in 2013. Even junior candidates with up to one year’s experience can command salaries that are on average 8-10% higher than in 2012. Employers recognize the importance of these niche skills for long-term growth and this is reflected in the salaries offered. Hays Hungary produces an annual Salary & Market Overview Guide, which includes typical salary brackets for specialist sector roles. To request your free copy or for more information on key employment trends, call +36 1 501 2400 or email hungary@hays.hu.

hays.hu

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

ENGINEERS, IT GUYS WANTED While national unemployment is stuck and the economy is contracting all around, people who have the necessary engineering and IT skills have an opportunity to cherry−pick the best jobs. Recruiters say their options are better now than ever.

23

3

Budapest Business Journal | April 19 – May 02

24

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

RECRUITMENT AGENCIES

(1)

YEAR ESTABLISHED NO. OF OFFICES WORLDWIDE

AVARAGE STATISTICAL HEADCOUNT IN 2012

PHARMACEUTICALS

TELECOM AND MEDIA

1-6 weeks

IT

Âť

SALES AND MARKETING

40

FMCG

40

MANUFACTURING

20

BANKING AND FINANCE

2,011 50

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2004 3191

253

– Randstad Holding N.V. (98), Capac Industrie BV (2)

SĂĄndor Baja LĂ­via TĂłth 3pWHU 9pJVĹƒ

1024 Budapest, /|YĹƒKi] XWFD (1) 411-2090 (1) 411-2091 info@randstad.hu

AndrĂĄs KovĂĄcs Norbert Fekete =VX]VDQQD 'iYLG

1053 Budapest, .iURO\L XWFD (1) 235-2600 (1) 235-2601 info@grafton.hu

INDUSTRY SPECIALIZATION GUARANTEE PERIOD RECRIUTMENT TIME

–

OTHER

35

MIDDLE MANAGEMENT

35

PERCENTAGE OF CANDIDATES PLACED IN 2012 (%)

TOP MANAGEMENT

30

NO. OF CANDIDATES PLACED IN 2012 NO. OF EMPLOYEES IN EXECUTIVE SEARCH AND CONSULTING ON MARCH 1, 2013

OTHER

1,682

PLACEMENT FROM DATABASE

771

ADVERTISING

www.randstad.hu

BREAKDOWN BY SEARCH METHODS IN 2012 (%)

DIRECT SEARCH

RANDSTAD HUNGARY KFT

TOTAL NET REVENUE (HUF MLN) IN 2012

1

COMPANY WEBSITE

NET REVENUE FROM RECRUITMENT (HUF MLN) IN 2012

RANK

Ranked by net revenue from recruitment in 2012

GRAFTON RECRUITMENT KFT 2

www.grafton.hu

360

1,587

10

25

60

5

246 40

10

30

60

3-6 months 1-6 weeks

1996 32

343

– Grafton Recruitment B.V. (), Grafton Recruitment International Limited ()

318[2]

384[2]

20

40

40

–

Âť

20

60

20

3-6 months 1-6 weeks

2007 247

30

– Hays Plc. (100)

Tammy Nagy-Stellini Aleksandra Keller Judit Ăœveges

1062 Budapest, 7HUp] N|U~W ² (1) 501-2400 (1) 501-2402 hungary@hays.hu

–

338 21

70

3-6 months 4-6 weeks

2001 2

36

(100) –

Zsuzsa Gårdus, Éva Paulovics – –

1037 Budapest, Montevideo utca 16/B (1) 439-2940 (1) 439-2963 RIĂ€ FH#LWMREV KX

2,489

– Adecco SA (98.47), Adecco Gmbh (1.53)

OttĂł VĂŠg $QLNy 7|UĹƒFVLN –

1134 Budapest, 9iFL ~W (1) 323-3500 (1) 323-3529 adehuadeccodl@ adecco.com

495

/iV]Oy 0iW\iV (80), Imre Papp (10), Erika 'pNiQ\

–

Imre Papp (ULND 'pNiQ\ 0iW\iV 3LQWpU

'HEUHFHQ %DWWK\iQ\ XWFD 12-1. (52) 446-991 (52) 530-965 job@hsakft.hu

18

%HiWD ) UMpV] (50), Gabriella Ruff (50) –

Gabriella Ruff – –

1075 Budapest, 0DGiFK ,PUH ~W 13-14. (1) 354-2060 (1) 354-2061 info@ karrierhungaria.hu

2,220

Profólió 0HQHG]VPHQW .IW (100) –

Csongor Juhåsz, BÊla Ignåcz, Såndor Zakor Róbert Kiss –

1146 Budapest, +XQJiULD N|U~W 140-144. (1) 432-1280 (1) 432-1281 prohuman@ prohuman.hu

80

3pWHU 7RNiU (97.13), 7DPiV 7RNiU (2.87) –

PĂŠter TokĂĄr 5HQiWD +RUYiWK eYD 1RYiN

1096 Budapest, 7KDO\ .iOPiQ utca 39. (1) 279-0707 (1) 466-0549 info@tesk.hu

7,845

7DPiV 6]DEy (10) Trenkwalder International AG (90)

TamĂĄs FehĂŠr $WWLOD *\ĹƒU\ *\|UJ\ 3DOiVWL *

1132 Budapest, 9iFL ~W ² (1) 354 0933 (1) 302 7589 infohungary@ trenkwalder.com

25

Individuals (100) –

Tímea Bíró – –

1092 Budapest, 5iGD\ XWFD (1) 336-2910 (1) 336-2911 info@ focusconsulting.hu

HAYS HUNGARY KFT www.hays.hu 3

4

JOBSGARDEN IT JOBS SZEMÉLYZETI TANà CSADÓ KFT

288

346

30

30

40

25

10

20

–

–

–

–

www.itjobs.hu

ADECCO KFT www.adecco.hu 203

5

10,163

40

20

20

20

485 20

10

272 9

10

30

60

3-6 months 1-6 weeks

20

2-6 months 1-6 weeks

1991 5500

2000 7

HSA KFT www.hsakft.hu 202

6

7

KARRIER HUNGĂ RIA KFT

194

1,337

255

20

30

35

40

35

30

–

www.karrierhungaria.hu

260 18

17

15

63

20

65

3-6 months 1-6 weeks

2007 1

PROHUMĂ N KFT www.prohuman.hu 8

189

7,210

60

15

20

5

370 15

15

260 16

5

319 26

5

106 11

11

35

54

3-9 months 2-6 weeks

84

3-6 months 1-3 weeks

70

3-6 months 1-8 weeks

50

3-6 months 1-6 weeks

2004 14

2002 1

1995 300

1997 1

TESK TANĂ CSADĂ“ KFT www.tesk.hu 184

9

402

25

30

30

4

12

–

–

TRENKWALDER KFT www.trenkwalder.hu 174

10

FOCUS 11 CONSULTING KFT www.focusconsulting.hu

162

24,228

181

25

45

35

15

35

35

10

10

20

40

www.bbj.hu

115

25

50

10

83

5,116

80

1,680

5.4 35.1 57.4

180 28

2

148 44

2

3

Âť

20

–

52 5

–

135 6

8

244 4

–

146 40

5

90 6

5

151 4

7

78

2-4 months 2-5 weeks

7

91

3-6 months 1-8 weeks

–

50

30

3-6 months 1-4 weeks

50

3–6 month 4–6 week

52

3-6 months 1-6 weeks

70

3-6 months 1-9 weeks

60

3-6 months 1-6 weeks

64

3-12 months 1-4 weeks

75

1-6 months 0.5-6 weeks

15

–

YEAR ESTABLISHED NO. OF OFFICES WORLDWIDE

TELECOM AND MEDIA

PHARMACEUTICALS

IT

SALES AND MARKETING

FMCG

MANUFACTURING

BANKING AND FINANCE

GUARANTEE PERIOD RECRIUTMENT TIME

INDUSTRY SPECIALIZATION

OTHER

MIDDLE MANAGEMENT

TOP MANAGEMENT

PERCENTAGE OF CANDIDATES PLACED IN 2012 (%)

15

www.kellyservices.hu

PANNONJOB HUMà N SZOLGà LTATÓ ÉS 13 TANà CSADÓ KFT

NO. OF CANDIDATES PLACED IN 2012 NO. OF EMPLOYEES IN EXECUTIVE SEARCH AND CONSULTING ON MARCH 1, 2013

OTHER

PLACEMENT FROM DATABASE

ADVERTISING

DIRECT SEARCH

TOTAL NET REVENUE (HUF MLN) IN 2012 2,302

BREAKDOWN BY SEARCH METHODS IN 2012 (%)

AVARAGE STATISTICAL HEADCOUNT IN 2012

KELLY SERVICES 12 HUNGARY KFT

NET REVENUE FROM RECRUITMENT (HUF MLN) IN 2012

RANK

COMPANY WEBSITE

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

741

– Kelly Services Inc. (96.77), Kelly Properties Inc. (3.23)

AnikĂł JĂłnĂĄs Mariann H. TĂłth 6]LOYLD 9DUJD

1062 Budapest, Aradi utca 8–10. (1) 354-2770 (1) 354-2771 info@ kellyservices.hu

TourĂŠ Fatime, Attila MolnĂĄr $QLNy %iQKLGL ,ORQD .RYiFV

8000 6]pNHVIHKpUYiU %HUpQ\L ~W ² (22) 554-170 (22) 554-191 info@pannonjob.hu

–

2004 3,600

1993 7

1,432

Videoton Holding Zrt (100) –

1995 2

79

$WWLOD 3iO

–

Mariann Tål $WWLOD 6]DEy –

1027 Budapest, Henger utca 2/B (1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

2000 1

6

%DOi]V 0DMHU 'iYLG 3HOOH

–

Balåzs Majer, Dåvid Pelle – –

1053 Budapest, Magyar utca 24. (1) 429-0029 (1) 429-0030 info@mphil.hu

2004 6

–

1998 7

1993 16

–

2001 2

1992 2

–

www.pannonjob.hu

14

VENTIV TANà CSADÓ ÉS SZOLGà LTATÓ KFT

5

25

3

Budapest Business Journal | April 19 – May 02

50

42

5

www.ventiv.hu

MP SOLUTIONS KFT www.mphil.hu 63

15

63

70

20

10

20

30

–

–

–

WORK FORCE KFT www.work-force.hu 60

16

3,780

48

22

30

10

38

1134 Budapest, 9iFL ~W (1) 354-3434 (1) 354-3436 titkarsag@ work-force.hu

1,338

5yEHUW &ViNYiUL Róbert Csåkvåri (100) – – –

1,195

Volano Kft (100) –

Csaba OttĂł Orsolya MĂłdnĂŠ Horvai $WWLOD *D]VL

9HV]SUpP Ady Endre utca 3. (88) 400-453 (88) 400-453 YHV]SUHP# manatwork.hu

945

(100) –

Istvån Medvegy, Rajmund DÊnes, Zsolt Csaplår – –

1072 Budapest, Holló utca 3–9. (1) 877-0900 (1) 877-0910 info@ humancentrum.hu

6

(V]WHU 0H]Ĺƒ (QGUH 3iO 6iUD 3iO

–

(V]WHU 0H]Ĺƒ – –

7DWDEiQ\D 6]HQW %RUEiOD tĂŠr 6. (34) 511-734 (34) 511-735 thr@t-hr.hu

211

(100) –

Attila Dobår, Botond Csordås, Låszló Hadi GyÜrgy Thury –

1094 Budapest, Angyal utca 24. (1) 239-9922 (1) 239-9926 info@job.hu

4

/iV]OyQp 'RUR]VPDL 5pND 'RUR]VPDL *DOODV]

Udo M. ChisteĂŠ (40)

LåszlónÊ Dorozsmai – –

1065 Budapest, %DMFV\ =VLOLQV]N\ ~W (1) 316-2800 (1) 316-2800 ahc.budapest@ ahc-international. hu

14

Individuals (100) –

Krisztina Varga – –

1083 Budapest, -y]VHI N|U~W (1) 411-0055 (1) 267-0942 workplus@ workplus.hu

13

6LPSOH 'HDO .IW (30), J-Tools Kft (55) Norval Kennedy Sinclair (15)

Zsuzsanna NÊmeth, NoÊmi ZsoldosnÊ Csaposs =VX]VDQQD NÊmeth –

1016 Budapest, +HJ\DOMD ~W (1) 453-2000 (1) 453-2004 RIĂ€FH#VHOHFW KX

1,220

NetworX System Kft (100) –

Viktor Bokor =VROW Ĺ‚U\ .DWLFD 6]LHEHQ

1135 Budapest, 5yEHUW .iURO\ N|U~W 82-84. (1) 888-9200 (1) 888-9206 ceginfo@ workwayclub.hu

MAN AT WORK KFT www.manatwork.hu 55

17

HUMĂ N 18 CENTRUM KFT

54

3,686

3,225

12

5

30

50

50

45

www.humancentrum.hu

T-HR KFT 19

www.t-hr.hu

51

52

30

25

40

10

5

6

20

35

30

–

–

–

–

–

–

–

–

JOB KFT www.jobgroup.hu 42

20

AHC INTERNATIONAL PERSONNEL 21 CONSULTING KFT

35

1,006

38

15

50

40

25

40

25

–

43

Âť

5

20

20

55

25

3-6 months 2-8 weeks

20

3–6 month 1–6 week

1993 2

1989 1

www.ahc-international.hu

WORKPLUS KFT 22 www.workplus.hu

SELECT +80É1(5ł)255É6 23 KFT

24

6

63

100

10

50

70

20

15

30

5

–

29 3

36 4

30

3

50

3

94

3-6 months 3-4 weeks

–

–

–

1994 2

www.select.hu

WORK WAY CLUB KFT www.workwayclub.hu 24

6

4,068

Âť Âť Âť Âť

36 10

5

25

70

1-6 months 1-6 weeks

Âť Âť Âť Âť Âť Âť Âť

2009 2

NOTES: (1) Financial data provided by the companies has been closed by accountants but not yet audited (2) 'DWD IRU DXGLWHG EXVLQHVV SHULRG -XO\ -XQH

26

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

ZEROS AND ONES STILL EQUAL BIG BUCKS In the age of computers, the Internet, and smartphones it’s not surprising that being an IT expert can grant you a job with a pretty good salary. It’s without question one of the most needed skills by companies. GERGELY HERPAI

One of the fathers of early computer tech− nology was the Hungarian János Neu− mann, so it’s not that surprising that IT experts are very successful here, but even so, there seems to be an insatiable need for the best IT experts. “Compared to other sectors, big com− panies are looking for twice as many IT employees to hire this year, and this num− ber is still growing. However this figures do differ if we take account of the exact areas in which companies are looking for employ− ees. Some IT areas needs more employees, ADVERTISEMENT

others less,” Tímea Tóth, senior information technology consultant at Hays Hungary told the Budapest Business Journal. Demand is on the rise, Viktória Sziller, HR consultant at CV−Online, told the BBJ. “Every year the demand for IT experts is growing. About 10−15% of CV− Online.hu job advertisements are about IT positions today.” So is it hard to find the perfect employee for the perfect job? “Most companies hire based on a consciously structured selection process: they have to pass tests and com− plete various exercises, so when the new colleagues are finally hired, the companies are usually satisfied with their choices,” Tóth explained. When companies need an IT employee for a specific area, and they have a hard time to find them, they need external help (usually a HR company) to find the perfect new colleague,” she added. WE SPEAK DIFFERENT IT LANGUAGES What can make finding the right IT employee difficult is that there are so many specialized areas. “For example if you own a website, and

WITH FIVE YEARS OF EXPERIENCE SOME IT EMPLOYEES CAN EARN ABOUT HUF 1.5 MILLION A MONTH. you want to develop it, you can’t just hire the same people to program the whole site for you. There are different areas like the php programming, java programming, FLASH programming and web design, and it’s rare that someone is an expert in several, or even two of those,” said János Bíró, a Senior Java Architect and managing director at software solutions company EU Edge. That’s why find− ing the right people for the right job is crucial in the IT domain. And it is even more compli− cated in very specialized domains, like com− puter game software, which needs extremely different talents including game designers, programmers, graphic artists, sound design− ers and more. On top of all that, foreign companies will often want people who speak a second lan− guage as well. “Even finding an English or German speaking software developer spe− cialized in a programming language (such as C++, .Net or Java) can be rather difficult sometimes,” says Tóth. But the hurdles don’t necessarily end there, says Tímea Sári, HR assistant at Hire One. “Some companies will ask for previous experience in the field in question working for other companies, which can make the search even harder,” she said. “In some specific positions which needs more qualified, more complex skills, like economic IT programming languages or IT project managers, there’s definitely a short− age,” Sziller told the BBJ.

MONEY TALKS Because of the high demand for the right “techie guys”, it comes to no sur− prise that IT salaries can be pretty high compared to other sectors. “Juniors can earn about HUF 250,000−350,000 salary per month before tax, and with three to five years of experience that will rise to HUF 400,000–600,000,” Tóth noted. “Companies usually raise your sal− ary about 5% a year, so after four or five years many people will just switch to another company for a raise of HUF 50,000,” confirmed Györk Horák, now a software engineer for EU Edge, but who has worked in the past three years for EPAM System, and Gladriel.com. However, if you climb the ladder of your career faster, or you are special− ized in a much needed IT field, you can earn more, quicker. “With five years of experience some IT employees can earn about HUF 1.5 million a month,” confirmed Tóth. According to Sziller, at CV−Online “a leading project man− ager can earn even more: about HUF 2 million before tax.” That’s not a bad salary, when you take in account that, according to the govern− ment’s official website kormany.hu, HUF 1.5 mln is the actual salary of Viktor Orbán, prime minister of Hungary.

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

27

LIGHT IN THE GLOOM As a result of the global economic crisis, the role of flexible and atypical employment in Hungary has become more common. Many manufacturing firms forecast only for a very short term and hire temporary workers instead of permanent employees. KRISZTIÁN KUMMER

Hiring temporary staff is a primary indi− cator of the overall health of an economy; in the wake of the crisis in 2008, tempo− rary staffers were among the first peo− ple to be laid off at companies. Ottó Vég, managing director of Adecco Hungary said. Later, those companies who could not or dare not plan for the long−term might find it more comfortable to hire a temporary labor force. Temporary staff and employee num− bers fully tied to production volume are more common on the labor market. In rural areas, low competence and semi−skilled or untrained labor characterizes the demand, while in the capital it focuses on intellec− tual jobs and the service industry. Manufac− ADVERTISEMENT

turing firms seek workers for semi−skilled assembly jobs in large numbers and the idea of white−collar temps is starting to sig− nificantly spread, Csaba Ottó, managing director of Man at Work said. Typically, manufacturers and production companies continue to take larger numbers of temps, usually for positions requiring physical work, for a period of 6−12 months on average. These companies are looking for workers to eliminate fluctuations in the production cyclical. Sometimes the employ− ment can last for years, though the upper time limit for temporary hiring is five years. SKILLED WORKERS NEEDED Nowadays, especially in the manufacturing industry, wholesale and retail businesses show some signs of taking on more peo− ple, but the importance of temporary staff is felt strongly in logistics, financial (bank− ing, insurance, and business services) and administrative areas as well, said Zboray Balázs, regional leader of Prohuman 2004. There is a strong need for a skilled work− force as well, but demand and supply are sometimes far away from each other. “Pro− fessional salesmen, CNC−operators, work− ers with engineering, catering or computer skills are the most difficult to find in Hun− gary. Skilled and reliable forklift drivers, IT−experts, engineers, finance or logistics

9.1% Y/Y DECLINE IN HOURS BILLED IN 2012

professionals and call center operators are also hard to hire,” he added. While government had high expectations of spurring on Hungarian employment rates through its the public employment program, its effect on temporary hiring is close to zero; the overlap between tempo− rary employment positions and jobs in the public employment program is negligible. ROLE REVERSAL The roles of Western and Eastern Hungary

have changed. “Western Hungary is more developed with more manufacturing com− panies, so our firm realizes higher revenues in this region. However, significant devel− opment has occurred in the eastern region, contrary to the last few years. In the western region, several large employers have laid off their workforce recently, and the redundant workers have been absorbed partially by the eastern region,” Csaba Hegedűs, tem− porary employment leader of Trenkwalder said. But the low mobility of employees still has a significant effect on efficient recruit− ing, Vég of Adecco pointed out. LOWER THE PRICES! Clientele demand has changed significantly in recent years. “They are looking for high quality, complex services at low prices and the decision−making period has been get− ting longer too. Adecco fulfills the require− ments with a managed service solution. We don’t just provide temporary staff; we manage a contingent workforce program, reporting and tracking, selection and man− agement, order distribution and even con− solidated billing based on advanced analyt− ics and KPIs,” Vég said. “As president of the Hungarian Labor Rentals Association, I see that clients try to persuade almost impossible prices on qual− ity rental,” added Csaba Ottó.

28

www.bbj.hu

3

Budapest Business Journal | April 19 – May 02

TEMP AGENCIES

(1)

NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

YEAR ESTABLISHED NO. OF FULL-TIME, NOT TEMPORARY EMPLOYEES ON MARCH 1, 2013

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

IT

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2012 (%)

CLERICAL WORK

STATISTICAL HEADCOUNT ON MARCH 1, 2013

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2012 (%) BLUE-COLLAR

AVARAGE STATISTICAL HEADCOUNT IN 2012

PERMANENT

7,675 8,747

BREAKDOWN OF PLACEMENTS DURATION IN 2012 (%)

14,720,882

24,228 24,054

TEMPORARY

HOURS BILLED IN 2012

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2012 NUMBER OF NEW TEMPORARY WORKFORCE IN 2012

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) IN 2012 NET REVENUE FROM TEMPORARY PLACEMENT IN 2012 (HUF MLN)

RANK

Ranked by hours billed in 2012

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

23 20 300

1995 163

TamĂĄs SzabĂł (10) Trenkwalder International AG (90)

TamĂĄs FehĂŠr $WWLOD *\ĹƒU\ GyĂśrgy PalĂĄsti G.

1132 Budapest, Våci út 22–24. (1) 354 0933 (1) 302 7589 infohungary@ trenkwalder.com

2004 108

Profólió Menedzsment Kft (100) –

Csongor Juhåsz, BÊla Ignåcz, Såndor Zakor Róbert Kiss –

1146 Budapest, Hungåria kÜrút 140–144. (1) 432-1280 (1) 432-1281 prohuman@ prohuman.hu

OttĂł VĂŠg $QLNy 7|UĹƒFVLN –

1134 Budapest, VĂĄci Ăşt 45. (1) 323-3500 (1) 323-3529 adehuadeccodl@ adecco.com

Zoltån Mårkus – Marianna Baksy

1118 Budapest, (OĹƒSDWDN XWFD (1) 248-2010 (1) 248-2016 info@ humaniahrsgroup.hu

Videoton Holding Zrt (100) –

TourĂŠ Fatime, Attila MolnĂĄr AnikĂł BĂĄnhidi Ilona KovĂĄcs

8000 SzÊkesfehÊrvår, BerÊnyi út 72–100. (22) 554-170 (22) 554-191 info@ pannonjob.hu

1993 45

(100) –

Istvån Medvegy, Rajmund DÊnes, Zsolt Csaplår – –

1072 Budapest, Holló utca 3–9. (1) 877-0900 (1) 877-0910 info@ humancentrum.hu

1998

Volano Kft (100) –

Csaba OttĂł Orsolya MĂłdnĂŠ Horvai Attila Gazsi

8200 VeszprĂŠm, Ady Endre utca 3. (88) 400-453 (88) 400-453 veszprem@ manatwork.hu

TRENKWALDER KFT www.trenkwalder.hu 1

94

4

7,845

80

20

6,705

10

2

5

1

4

70

–

8

PROHUMĂ N KFT www.prohuman.hu 5,698,130

2

7,210 7,021

6,420 5,736

89

11

2,220

65

35

2,338

Âť Âť Âť Âť Âť Âť Âť Âť

14 2 14

Âť Âť Âť Âť Âť Âť Âť Âť

10 6 5,500

1991 65

– Adecco SA (98.47), Adecco Gmbh (1.53)

19 17 19

2001 85

6 individuals (100) –

ADECCO KFT www.adecco.hu 4,552,678

3

10,163 9,913

Âť Âť

92

8

2,489

80

20

Âť

HUMĂ NIA HRS GROUP ZRT www.humaniahrsgroup.hu 3,809,000

4

5

PANNONJOB HUMà N SZOLGà LTATÓ ÉS TANà CSADÓ KFT

3,034,928

3,363

Âť

5,116 4,871

Âť Âť

2,904 1,545

90

28

10

72

Âť

1,432

90

47

10

53

Âť

1,530

6

11

–

–

2

20

2

27

–

15

40

25

–

–

50

1

7 5 7

5

16 15 16

–

7 6 7

www.pannonjob.hu

6

HUMĂ N CENTRUM KFT www.humancentrum.hu

2,620,000

3,225 3,171

2,610 270

80

20

945

65

35

830

9

4

7

8

7

60

–

1993 90

MAN AT WORK KFT www.manatwork.hu

7

2,480,000

3,686

Âť

2,930 768

76

24

1,195

87

13

1,430

11

1

1

–

–

87

–

Âť

www.bbj.hu

1,142

15

1,011

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

–

5 5 5

1990 55

Zoltán Tóth (80), Péter Berta (20) –

Péter Berta – –

8900 Zalaegerszeg, Ady Endre utca 2. (92) 550-050 (92) 550-060 whc@whc.hu

–

6 – 6

2004 50

Róbert Csákvári (100) –

Róbert Csákvári – –

1134 Budapest, Váci út 49. (1) 354-3434 (1) 354-3436 titkarsag@ work-force.hu

2001 37

Péter Vida (14.30), Zoltán Egerszegi (32), Erika Pintér (32), Via Pannónia Kft (17.70), Gábor Csizmadia (4) –

Péter Vida, Gábor Csizmadia Diána Radócsai Bence Husi

7400 Kaposvár, 48-as Ifjúság útja 42. (82) 512-112 (82) 312-570 info@dologido.hu

Viktor Bokor =VROW łU\ Katica Szieben

1135 Budapest, Róbert Károly körút 82-84. (1) 888-9200 (1) 888-9206 ceginfo@ workwayclub.hu

5

3

12

–

5

75

–

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

IT

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2012 (%)

CLERICAL WORK

STATISTICAL HEADCOUNT ON MARCH 1, 2013

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2012 (%) BLUE-COLLAR 85

YEAR ESTABLISHED NO. OF FULL-TIME, NOT TEMPORARY EMPLOYEES ON MARCH 1, 2013

75

AVARAGE STATISTICAL HEADCOUNT IN 2012

1,338 1,160

25

PERMANENT

2,316,555

3,780 3,535

BREAKDOWN OF PLACEMENTS DURATION IN 2012 (%)

1,142 896

TEMPORARY

2,341,028

3,579 3,313

NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

www.whc.hu

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2012 NUMBER OF NEW TEMPORARY WORKFORCE IN 2012

8

WHC KFT

HOURS BILLED IN 2012

TOTAL NET REVENUE (HUF MLN) IN 2012 NET REVENUE FROM TEMPORARY PLACEMENT IN 2012 (HUF MLN)

RANK

COMPANY WEBSITE

29

3

Budapest Business Journal | April 19 – May 02

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

WORK FORCE KFT www.work-force.hu

9

100

–

1,338

65

35

1,405

25

8

–

2

–

65

–

'2/2*,'ł .)7 www.dologido.hu 1,863,756

10 m u n k a e r ő k öz ve t í t ő

1,684 1,420

1,929 1,820

7

93

628

92

8

604

23

–

27

–

–

50

–

–

12 11 12

k ö l c s ö n ző

WORK WAY CLUB KFT 41

2 1 2

2009 38

NetworX System Kft (100) –

45

1 – 3,600

2004 61

– Kelly Services Inc. (96.70), Kelly Properties Inc. (3.30)

Anikó Jónás Mariann H. Tóth Szilvia Varga

1062 Budapest, Aradi utca 8–10. (1) 354-2770 (1) 354-2771 info@ kellyservices.hu

–

7 4 7

2007 135

Dénes Osztroluczky (50), Szabolcs Jakab (50) –

Dénes Osztroluczky, Szabolcs Jakab – –

1134 Budapest, Kassák Lajos utca 69–71. (1) 555-1585 (1) 555-1586 esense@ esense.hu

www.workwayclub.hu 11

KELLY SERVICES 12 HUNGARY KFT

1,653,768

4,068 2,716

2,397 1,435

1,241,476

2,302 1,836

3,861 1,250

www.kellyservices.hu

ESENSE HUMAN RESOURCES 13 SZOLGÁLTATÓ ZRT www.esense.hu

1,136,525

2,281 2,050

578

»

–

82

27

100

18

73

1,220

741

713

90

80

–

10

20

100

1,339

796

729

7

22

31

–

12

21

1

5

–

–

1

12

20

15

36

31

–

–

–

–

–

YEAR ESTABLISHED NO. OF FULL-TIME, NOT TEMPORARY EMPLOYEES ON MARCH 1, 2013

NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

IT

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2012 (%)

CLERICAL WORK

STATISTICAL HEADCOUNT ON MARCH 1, 2013

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2012 (%) BLUE-COLLAR

AVARAGE STATISTICAL HEADCOUNT IN 2012

PERMANENT

BREAKDOWN OF PLACEMENTS DURATION IN 2012 (%) TEMPORARY

HOURS BILLED IN 2012

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2012 NUMBER OF NEW TEMPORARY WORKFORCE IN 2012

COMPANY WEBSITE

Budapest Business Journal | April 19 – May 02

TOTAL NET REVENUE (HUF MLN) IN 2012 NET REVENUE FROM TEMPORARY PLACEMENT IN 2012 (HUF MLN)

RANK

30

www.bbj.hu

3

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2000 47

László Mátyás (80), Imre Papp (10), Erika Dékány (10) –

Imre Papp Erika Dékány Mátyás Pintér

4024 Debrecen, Batthyány utca 12-1. (52) 446-991 (52) 530-965 job@hsakft.hu

1996 50

– Grafton Recruitment B.V. (»), Grafton Recruitment International Limited (»)

András Kovács Norbert Fekete Zsuzsanna Dávid

1053 Budapest, Károlyi utca 12. (1) 235-2600 (1) 235-2601 info@grafton.hu

2005 29

Floridita Szolgáltató és Tanácsadó Kft (50), Milagroso Gerifalte Szolgáltató és Tanácsadó Kft (50) –

Tóth Tibor Péter Vida Dániel Fatuska

2724 Újlengyel, Ady Endre utca 11. (29) 385-085 (82) 423-104 info@ munka-ero.hu

3pWHU 7ŃNpV – –

8272 Óbudavár, )Ń XWFD (87) 655-284 (87) 655-284 info@ szemelyzet.hu

HSA KFT www.hsakft.hu 14

864,776

1,337

»

1,293 815

25

75

495

50

50

439

45

1

5

2

2

45

–

–

7 6 7

GRAFTON RECRUITMENT KFT www.grafton.hu 545,000

15

081.$ (5ł .g/&6g1=ł e6 .g=9(7Ì7ł .)7 16 www.munka-ero.hu

SZEMÉLYZET .g/&6g1=ł e6 17 .g=9(7Ì7ł .)7

453,937

1,587 1,057

609 578

679 612

1,024 845

80

76

20

24

343

264

60

93

40

7

340

347

448,475

807 806

579 579

77

23

238

91

9

279

335,445

1,682 912

458 193

95

5

253

60

40

257

25

10

–

4

–

–

2

60

9

3

–

–

4

–

–

60

30

91

1

–

–

1

–

21 – 21

–

1 1 1

2012 1

Roland Varga (60), Péter 7ŃNpV

–

1 – 3,191

2004 59

– Randstad Holding N.V. (98), Capac Industrie BV (2)

Sándor Baja Lívia Tóth 3pWHU 9pJVŃ

1024 Budapest, /|YŃKi] XWFD (1) 411-2090 (1) 411-2091 info@randstad.hu

1992 45

(100) –

Attila Dobár, Botond Csordás, László Hadi György Thury –

1094 Budapest, Angyal utca 24. (1) 239-9922 (1) 239-9926 info@job.hu

2010 26

Csilla Vidó (100) –

Csilla Vidó Barbara Werle Tímea Hornyák

2500 Esztergom, Jókai Mór utca 8. (1) 878-0145 (1) 878-0160 hornyak.timea@ hrcv.hu

2001 8

Individuals (84.87) Starjobs Limited (10), Enersense Oy (5.07)

Péter Megyeri *\XOD 6HUIŃ]Ń Zoltán Kott

1092 Budapest, Czuczor utca 6. (1) 456-0700 (1) 217-8606 info@starjobs.hu

www.szemelyzet.hu

RANDSTAD HUNGARY KFT 18 www.randstad.hu

2 1 32

» » » » » » » »

JOB KFT www.jobgroup.hu 332,145

19

HRCV SZEMÉLYZETI 20 SZOLGÁLTATÓ KFT

311,102

www.hrcgroup.hu

1,006 865

596 538

374 215

444 214

25

67

75

33

211

155

–

66

100

34

219

196

40

12

20

6

5

5

20

–

11 6.50 3.50 54

–

1

10

6

2 – 2

11 9

»

STARJOBS MAGYARORSZÁG HUMÁNSZOLGÁLTATÓ KFT www.starjobs.hu 21

255,431

406 402

441 328

70

30

136

25

75

126

40

10

10

15

5

15

–

5

20 19 30

www.bbj.hu

YEAR ESTABLISHED NO. OF FULL-TIME, NOT TEMPORARY EMPLOYEES ON MARCH 1, 2013

NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

IT

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2012 (%)

CLERICAL WORK

STATISTICAL HEADCOUNT ON MARCH 1, 2013

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2012 (%) BLUE-COLLAR

AVARAGE STATISTICAL HEADCOUNT IN 2012

PERMANENT

BREAKDOWN OF PLACEMENTS DURATION IN 2012 (%) TEMPORARY

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2012 NUMBER OF NEW TEMPORARY WORKFORCE IN 2012

TOTAL NET REVENUE (HUF MLN) IN 2012 NET REVENUE FROM TEMPORARY PLACEMENT IN 2012 (HUF MLN)

RANK

HOURS BILLED IN 2012

COMPANY WEBSITE

31

3

Budapest Business Journal | April 19 – May 02

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2002 23

Péter Tokár (97.13), Tamás Tokár (2.87) –

Péter Tokár Renáta Horváth –

1096 Budapest, Thaly Kálmán utca 39. (1) 279-0707 (1) 466-0549 info@tesk.hu

1989 6

Individuals (100) –

Krisztina Varga – –

1083 Budapest, József körút 53. II/14. (1) 411-0055 (1) 267-0942 workplus@ workplus.hu

Tímea Bíró – –

1092 Budapest, Ráday utca 51. (1) 336-2910 (1) 336-2911 info@ focusconsulting.hu

Mariann Tál Attila Szabó –

1027 Budapest, Henger utca 2/B (1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

TESK TANÁCSADÓ KFT www.tesk.hu 22

23

NR

110,532

WORKPLUS KFT

6,984

www.workplus.hu

FOCUS CONSULTING KFT www.focusconsulting.hu

VENTIV TANÁCSADÓ ÉS NR SZOLGÁLTATÓ KFT www.ventiv.hu

»

»

402 211

63 18

223 158

17 12

»

» »

1,680 730

200 70

181

15

75

60

35

85

25

40

65

57

14

25

79

76

20

–

–

24

80

100

100

54

12

12

93

» » » » » » » »

80

50

55

–

50

10

–

–

–

–

–

–

10

–

20

–

–

–

–

–

–

» » »

10

1 – 1

–

1 – 1

1997 11

Magánszemélyek (100) –

15

1 – 2

1995 18

Attila Pál (100) –

NOTES: (1) Financial data provided by the companies has been closed by accountants but not yet audited.

REST ASSURE D, SOLUT ION PROVID E D!

TEMPORARY EMPLOYMENT 1134 Budapest, Róbert Károly krt. 82-84.

Responsibility absolved Competence obtained Payable as bill of costs

Phone: +36 1 888 9200 Fax: +36 1 888 9206 ceginfo@workwayclub.hu www.workwayclub.hu

BOOK REVIEW

How to make better choices in life and work

Q&A

36

RESTAURANT REVIEW

Costes: It’s a kind of magic

37

MIGUEL VIEIRA Chef of Michelin-star awarded Costes stes

BUDAPEST DESIGN MARKET HITS THE ROAD

Budapest’s WAMP design market brings a new co−owner on board and eyes opportunities around the region.

➜ READ ON

ANDREEA ANCA

www.bbj.hu

34

Budapest Business Journal | April 19 – May 02

➜ BUDAPEST DESIGN MARKET HITS THE ROAD late, wine to toys, who take turns to sell their creations; up to 100 of them are present each Sunday.

STORY HIGHLIGHTS ■ Sziget-founder

Károly Gerendai acquired 25% stake in WAMP last year ■ He plans to invest another HUF 30 million into WAMP

NEW UP-MARKET VENUE WAMP’s new venue is a 4,000 square meter multi−level shopping mall in a recently refurbished historical building on Váci utca. The shop units are empty for the time being, but the narrow corridors have been filled with the WAMP stalls every Sunday since February this year. Regular fairs and the up−market venue are part of the development agenda, as is a move to focus each week on one “sector” of WAMP’s ever−expanding range of offer− ings, whether it be fashion, gastronomy or things for children. Designers and craft−makers see WAMP not only as a place to sell their wares, but also as a major platform for marketing. “If I wanted to put an advert in the paper it might cost me a few hundred thousand forints,” says Viktória Tisza, who sells flower−patterned swimwear for women.“For me it is well worth coming here, even if sales only cover the rent I pay for my stand, because I get to be known.” Krisztina Csősz, who makes earrings, necklaces and rings from colorful beads and crocheted lace, sells well enough to justify the trip into Budapest from her home in Szentendre.

Few things express the eclectic style of Buda− pest better than WAMP, the weekly design market that offers everything from cool jew− elry to gourmet food in an atmosphere buzz− ing with music and conversation. In its seven−year existence, WAMP has become a favorite for style−conscious locals and visitors to Budapest alike, and it has now committed itself to defying the tough economic times and growing both in Hun− gary itself and around the region. Károly Gerendai – known for transform− ing Hungary’s annual week−long Sziget music festival into one of the largest such events in Europe – paid HUF 1 million last year for a 25% stake in the business. He is bringing not only his reputation and expertise to the project, but planning to invest an additional HUF 30 million into WAMP to fuel its expansion plans. MORE THAN JUST A MARKET Gerendai told the Budapest Business Journal why he is now a part owner of a business that he has admired for some time. “WAMP has two qualities; it has nice things – and this is because we select the designers and don’t allow just anybody to participate. Then the way it presents itself conveys qual− ity: it is a coherent brand and in this respect it aims at being a lot more than just a market – it wants to be a real ‘event’.” Gerendai believes it was vital for WAMP – which originally took place just once a month at different locations – to become more frequent and predictable, hence the introduction of weekly markets in a histori− cal building on Váci utca. He also intends to take the homegrown Hungarian brand into new territory around Central and Eastern Europe. “If we want to reach the Austrian or the Slovak markets we should really organize WAMP there, in Vienna or Bratislava,” says the Sziget mastermind; he hopes to take WAMP to both cities this year and bring together Hungarian and local designers. “You have to take the actual fair to the people – we don’t expect foreigners to travel to Budapest to see, and buy at, WAMP,” he explains, admitting that selling a music fes− tival to an international market was less complicated than exporting this design fair. FROM THE BOTTOM UP In a similar way to Sziget, WAMP has grown from humble beginnings thanks to the hard work of enthusiastic founders. Réka Matheidesz, one of four friends who started building WAMP from the bottom up in 2006, says that she and her fellow owners see a like−minded investor in Gerendai. Matheidesz, Kinga Moshammer and two other women who are no longer part of the business, set out to popularize lit− tle−known Hungarian designers by creat− ing a platform for them to show and sell their works to the public.

YOU HAVE TO TAKE THE ACTUAL FAIR TO THE PEOPLE – WE DON’T EXPECT FOREIGNERS TO TRAVEL TO BUDAPEST TO SEE, AND BUY AT, WAMP KÁROLY GERENDAI

The women’s inspiration for WAMP, which stands for Sunday’s Hungarian Design Market, came from the Old Spital− fields market in London, where Mosham− mer studied fashion. The first event, organized on Erzsébet tér, turned out to be a great success and a nov− elty both for the local designers, whose out− put was suddenly in demand, and to eager shoppers who had been hitherto oblivious to their work. “At the time, the Hungarian designers were totally obscure,” says Matheidesz, who has a background in economics and man− ages the marketing and communication side of the business. “I can say that WAMP did a lot to bring the designers out of their studios and into the open – it looked quite good when they were all together in one place,” she says with a smile, recalling that first event in July 2006 when many of the 35 designers present sold out. WAMP now works with some 700 mak− ers of everything from clothes to choco−

www.bbj.hu

35

Photos: WAMP, Andreea Anca

Budapest Business Journal | April 19 – May 02

“There are many foreigners here and that’s good. Hungarian customers like to buy the cheaper things. Now I make these rings, which cost only HUF 1,500, and they are popular with Hungarians. People like to buy something – instead of an ice−cream, they buy my rings.” Marcus Goldson, a foreign artist based in Budapest who sells his poignant and col− orful depictions of Budapest street−life and the places he travels to, talks with admira− tion of WAMP. “It’s bigger and more professionally run” than it used to be, he says, although he adds that he misses the more rough− and−ready market−feel of the previous venue at Millenáris. “This is a great building but people pre− ferred being at the other location because it was more of a market space, you could leave the kids in the middle and wander off in any direction.” The good news for Goldson and many of his fellow artists is that WAMP will move outdoors again during the summer months

to Erzsébet tér, where the fair can attract as many as 13,000 visitors in one day. Perhaps a larger concern for Geren− dai and his fellow WAMP owners is whether this distinctive Budapest brand will translate abroad: they hope to intro− duce it to Vienna in the summer and Bratislava this fall.

“WAMP was a good idea at the right time and in the right place,” says Gerendai. “These kind of design products are increasingly trendy; the problem, of course, is the recent economic crisis. This is why we are looking at other markets where people might have more money to spend on design.”

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36

Budapest Business Journal | April 19 – May 02

BOOK REVIEW

MAKING THE RIGHT CHOICE Just making a decision can be hard enough. How do you judge whether or not it’s the right one?. When it comes to decision−making, our brains are flawed instruments. We’re overconfident. Short−term emo− tions distract us. We seek out informa− tion that supports our point of view, while ignoring that which does not. In short, we’re frequently tripped up by powerful biases and wishful thinking. But how can we do better? A number of books have identified just how irra− tional our decision making can be but, as Chip and Dan Heath explain, being aware of a bias doesn’t correct it, just as knowing you’re nearsighted doesn’t help you to see better. From the bestselling authors of Made To Stick and Switch comes Deci− sive, a book that helps us to overcome our brains’ natural biases and make better, more informed decisions in our lives – both at work and at home. ADVERTISEMENT

Drawing on decades of psychological research as well as a range of case stud− ies, Decisive offers practical tools that can help us think more clearly about our options, avoid common pitfalls and find the best answers. The Heath brothers begin by dis− cussing how the usual decision−mak− ing process works. They argue that four ‘villains’ of decision−making, embedded in our unconscious behav− ior, hamper us: narrow focus, confir− mation bias, short−term emotion and overconfidence in the outcome. Their solution is a four−step system called WRAP, which stands for Widen your options, Reality−test your assump− tions, Attain distance before decid− ing, and Prepare to be wrong. The remainder of the book is dedicated to explaining this process in more detail and illustrating it with real− world examples. Fascinating stories and case stud− ies help us to put Decisive’s tech− niques into context. From the down− fall of Kodak to the inspiring account of a cancer survivor, from a rock star’s

ingenious decision−making trick to a CEO’s disastrous acquisition, we an see how the Heaths’ principals can he be implemented. We also learn the answers to critical questions such as: z− How can we stop the cycle of agoniz− ing over our decisions? How can we make group decisions without destruc− c− tive politics? And how can we ensure re that we don’t overlook precious oppor− r− tunities to change our course? Decisive is an important and acces− s− sible book, offering fresh strategies es ke and practical tools to help us make h− better choices. As the Heath broth− er ers write, “Our decisions will never er. be perfect, but they can be better. an Bolder. Wiser. The right process can steer us toward the right choice. And nd nt, the right choice, at the right moment, can make all the difference.”

DECISIVE by Chip and Dan Heath Published by Random House Business Books ISBN 9781847940858 Available to order through www.hungaropress.hu

www.bbj.hu

37

Budapest Business Journal | April 19 – May 02

BE ON TOP OF YOUR GAME In an exclusive interview with the Budapest Business Journal, Miguel Vieira, star chef of Costes restaurant, talks about how creativity and consistency go together in his everyday work, and how Hungarians are now more open−minded than they were five years ago. ÁGNES BALLA

Q

What makes Costes one of the best restaurants in Hungary? Can you name the three most important things? A: I give you two: hard work and passion. You always have to be on top of your game.

Q

How do you match creativity with systematic work? You reproduce each dish the same way each and every night. A: Creativity is one leg of my job, consistency is the other. It is important to be able to create the same dish exactly the same one after the other. To cook for 20, to cook for 40 persons – you have to do the same every day. That is part of our job. When your work hard, and the kitchen is a real melting point, you can’t work

on ideas. Usually during the week it is quite busy. Obviously I try to have some time on my own to put my head in order, especially on my vacations, or on my days off.

Q

What inspires you? How do you learn? A: Ideas come from everywhere, really. From travelling, from eating abroad, from markets, seasons, the weather, music, films, or sometime a good idea just comes.

Q

Did you always want to be a chef? A: I never cooked before graduat− ing from high school. I started to study tourism, and got a scholarship to Lon− don. There, in the second year of univer− sity there was a cooking course. That settled everything: I immediately knew that this was what I wanted to do.

Q

How did you learn how to lead people? A: I am still in the learning pro− cess (he laughs). You need to be a bit of a psychologist as well. You must under− stand the boys downstairs. I try to be very demanding on one side, but give of myself on the other. It is not just asking, asking, ask− ing and not giving back.

Q

How do you get feedback? Do you talk to the guests here? A: I feel comfortable in the

kitchen, and I don’t feel comfortable upstairs. So I stay in the kitchen, and I usually get feedback through the waiters. There are slight differences between foreign and Hun− garian guests, but I can say Hungarian guests are much more open−minded than they were five years ago.

Q

Do you personally pick raw mate− rials, even abroad? A: When we opened, we pur− chased almost everything abroad, mainly from France. Now thing have changed a bit; we get approximately 50% of the raw materials in Hungary; for example lamb, venison, duck liver, or mushroom in season.

Q

What is your favorite food? A: Fish and seafood. Maybe because I was born and raised a few meters from the sea and I’ve grown up eating them. I think that there is no food that I don’t like but if I have to pick one it would definitely be something sea related (sea bar− nacles, sea urchins, razor clams, sardines – something in that line). Now that I am far away from the sea, that is what I miss the most.

Q

Have you ever thought of enter− ing the Bocuse D’Or world cook− ing contest? A: It is not my cup of tea. I do not have the time for it.

MIGUEL VIEIRA Vieira left his home country, Portugal, at the age of 20 to go to England and study hotel, restaurant and tourism management at the City of London College. During the second year of the course Vieira was lucky enough to find what he believes is his vocation in one cooking class. After graduating from the world famous Cordon Bleu cooking school, he did his apprenticeship in London and then went to France and later Spain, learning with the best in the profession. In 2008 he was invited to come to Budapest and open the Costes Restaurant. Costes quickly become a reference not only in Hungary but on an international level too. In less than two years Costes was awarded the very first Michelin star in Hungary – an award that has been kept since then – and many other important recognitions.

RESTAURANT REVIEW

IT’S A KIND OF MAGIC As the only restaurant in Hungary to be rewarded the Michelin−star twice, Costes is undoubtedly one of the best in Budapest. While its menu and prices are primarily aimed at foreigners, it has found its local audience as well. Arriving at around seven, the place was still quiet, with only a few tables busy. After taking a seat and looking at the menu card, we decided to choose two tasting menus: one vegetarian and one named Discovery. Both menus consisted of five courses, and were completed with some “presents” from the chef. First we were offered homemade bread with a variety of spicy butters laid on brick of a Himalaya salt: a small scoop of salted French butter, one with peppers, one with basil and one with black olives. A scoop of spicy duck lard indulged those with a Hun− garian tooth. Our next culinary gift was an ice−cold carrot salad with lemon and ginger, with hot cheese foam on top. “You should try the hot and the cold part together,” our waiter passed on the chef’s instruction.

On the next plate we got black maca− rons seasoned with sepia and filled with a goat cheese cream, and little cubes of curry marshmallows. The last welcom− ing surprise was warm fennel cream with herring caviar; and a tiny portion of leek soup with smoked bacon foam on top. All of these small and creative bites were deli− cious, surprising and showed a lot of pas− sion and creativity. Our first “official” starter was grilled scal− lops, Jerusalem artichoke, black garlic and little cubes of lacquered “Durok” pork belly. It was an amazing dish! The scallops were perfectly grilled, the Jerusalem artichoke

came as chips, bake and puree, and the lit− tle cubes of pork belly complemented the composition with a stronger taste. My part− ner got a garden salad that looked like a three dimensional impressionist painting: colorful and vivid, yet fresh and rich. By the time the soup has arrived, we were pretty full. I got oven baked potato soup with truffles, and free range egg yolk rav− ioli. The vegetarian menu offered broccoli soup with wild salmon rolls. My soup tasted (without exaggeration) like heaven, when the three−minute egg spilled from the quite large ravioli into the hot, creamy potato soup. The broccoli soup was fine, had a fresh and natural flavor, but was not as hot as we expected. As a main course I got lamb, which was again excellent. The meat kept all its natu− ral flavors yet was soft and juicy. The thyme and lemon seasoned gravy, and the vege− table pearls left al dente, joined in perfect harmony on my plate. My partner’s main course was hand−rolled agnolotti, pumpkin and pecorino “Fiore Sardo”. It was a light yet sophisticated dish, with complex tastes and a playful variety of textures. We finished our dinner with three types of desserts: Orange Baba, Yuzu Parfait, Confit Kumquat, Lemon Cream; Coconut Mousse, Lime Yoghurt, Passion Fruit Curd,

Mango Sorbet; and one with a lot of choco− late: the Costes version of the classic “Poire Belle Hélène”. The pear and some biscuit were hidden in a gold dusted ??? chocolate sphere, which melted down in a few second by pouring on hot chocolate. The waiters were professional, kind, well informed, and paid great attention to us all evening, yet we still we had the chance for an undisturbed talk during our dinner. Costes is a place that is highly recommended to those who enjoy fine modern food, who are willing to pay extra for quality, and who appreciate the luxury of fine details. RATATOUILLE

COSTES 1092 Budapest, Ráday u. 4. +36 (1) 219 0696 www.costes.hu

Degustation Price range Reservation menu

Speed of service

Sommelier

Wifi

3 Private dining

Business Michelin star, Gault Millau Credit cards menu awarded toque (pcs) accepted awarded

Parking spots

www.bbj.hu

38

Budapest Business Journal | April 19 – May 02

WHO'S NEWS

Name DR. ÁGNES SZENT-IVÁNY Current company/position SÁNDOR SZEGEDI SZENT-IVÁNY KOMÁROMI EVERSHEDS LAW FIRM/ MANAGING PARTNER

Name DÁNIEL LENNERT Current company/ position NOGUCHI PORTER NOVELLI / ADVISOR

Ágnes Szent-Ivány has been made managing partner of Sándor Szegedi Szent-Ivány Komáromi Eversheds, the Budapest office of Eversheds International. Mainly active in corporate, M&A, commercial, competition, employment and energy law, she is on the panel of the Court of Arbitration of the Hungarian Chamber of Commerce and Industry, and is chairperson of the Business Ethics Committee of the Joint Venture Association. She is country expert of the International Distribution Institute. Lennert has joined communications agency Noguchi Porter Novelli as an advisor. He arrived from ON-R Communications where he was in charge of planning web 2.0 solutions for RTL Klub, and also coordinated the social media activities of the TV channel. In 2010 and 2011, he was PR manager at Ombrello Media Kft. Between 2008 and 2010, Lennert was an account executive with Premier Kommunikációs Iroda.

Do you know someone on the move?

Supported by

Send information to research@bbj.hu

Name TAMÁS HOCK Current company/ position IP SYSTEMS/ MANAGING DIRECTOR

Name SZILVIA GRÄF

Hock succeeds as managing director Ákos Füzi, who will continue to be the owner of the company. Hock started his career as a programmer, and is a founding member of IP Systems. Before establishing the company, he worked as a developer for Synergon. He holds a degree in mathematics and obtained another degree in energy management at the Corvinus University of Budapest.

Gräf has joined the consumer brand communications group of Noguchi. Previously, she was a journalist with Heti Válasz, and also worked for news portal Origo.hu. Between 2009 and 2011, she was a PR manager at Eurolex Consulting. She started her career at communications agency Mmd as a PR assistant.

Current company/ position NOGUCHI PORTER NOVELLI / ADVISOR

Name CLARENCE SIMMS Current company/position COMFORCE ZRT / DEPUTY CEO RESPONSIBLE FOR INTERNATIONAL OPERATIONS

Name GYÖRGY KÁROLY Current company/ position APPENINN HOLDING / CHAIRMAN OF THE BOARD

Call center operator Comforce Zrt has created a new position and named Clarence Simms as deputy CEO in charge with international operations. Before joining Comforce, Simms worked as managing director at Transcom Magyarország and Unisys Global Services Magyarország. He also has significant experience in the international contact center sector. In his new position, he will be responsible for foreign expansion.

Appeninn Holding has appointed Károly as chairman of the board of directors, with Gábor Székely remaining as CEO. Between 2007 and 2013, Károly worked as head of Béres Investment Zrt. In that position, he was in charge of building the company’s real estate strategy, planning and executing projects and managing the real estate portfolio. From 2001 until 2007, he was strategic director of Dataplex Kft, and participated in the firm’s integration into Wallis and later into Magyar Telekom Group.

THE AGE FACTOR: OPTIMUM – AGE FOR PLASTIC SURGERY

P

lastic surgery is no longer confined to middle-aged patients; the very young and the elderly are also considering cosmetic corrections. Is there an optimum age for each beautifying technique?

“Timing is indeed a key factor in plastic surgery,” says Dr. János Gacs, plastic surgeon at Dr. Rose Private Hospital. “I meet 20 years old patients asking for lipo-suction, which is far too early in my opi-nion. On the other hand, an elderly lady was worried whether she was ready for a facelift already, while her skin was sagging so much that I had to talk her out of plastic surgery. “ “Age is a factor in what can and cannot be done, but each person is different, and that’s what really matters,” concludes Dr. Gacs. Having said that, we can establish an optimum age for certain methods, by and large. FOREHEAD WRINKLES Method: Botox Optimum age: 35+ Permanent wrinkles rarely show up conspicuously before the age of 40. Gestures bring out those lines, but Botox is recommended for crevices that are clearly visible only when the face is otherwise relaxed.

EYES Method: eyelid surgery Optimum age: 40 Sagging eyelids and bags under the eyes is a topical issue for 40-somethings. Bags are caused by excess fatty tissue under the eyes. Some are genetically prone to the condition, but there is no need to worry, as plastic surgery can correct it successfully from 19 years on if need be. NOSE Method: nose surgery Optimum age: 20+ Surgery is an option as soon as facial bones stop growing – at the age of 18 in women and 19 in men. From here on, the sooner the operation, the faster the regeneration. It is not recommended above 50, because the skin loses its elasticity considerably. FACE Method: Facelift Optimum age: 45 The mid-40s is the optimum age for a facelift, because the skin is still elastic enough, only minor corrections are necessary, so the result will be convincing and unnoticeable – as if the patient had had a long, relaxing, rejuvenating vacation. Naturally, facelifts are possible earlier, and at a later age as well, but expect the best result at 45 or so.

LIPS Method: lip fill Optimum age: 37+ Women ask for this procedure for two reasons: they either want more sensual lips, a bit like Angelina Jolie, or they want to counter the effect of aging, and restore their naturally shrinking lips a little bit. Either way, one should aim for natural looking lips, otherwise the patient ends up looking like Donald Duck. BREASTS Method: implant Optimum age: 25+ Method: breast lift Optimum age: 40+ Modern implants can stay in place for 25-30 years if no complication arises. Above a certain age, however, implants are not enough, breast could do with a bit of lifting. We suggest that you wait for the procedure until you don’t plan to have any more babies. TUMMY Method: abdominal plastic surgery Optimum age: 35+ Once again, having children is a milestone for this surgery, one has to wait until the end of pregnancies. This is no trifle, the patient has to be in good physical condition to undergo treatment. All in all, a fit 35-60 year-old is the usual patient for a tummy tightening.

HIPS AND THIGHS Method: liposuction Optimum age: 30-35 Below 30? Eat well and exercise, and you are sorted. The only exception at that age are women genetically prone to ‘breeches’: large amounts of excess fat on the outer side of the thighs. The rule of thumb for liposuction is the same as any other method in plastic surgery: the younger the patient, the more easily the skin adapts to the new contour. GOOD TO KNOW Non-invasive beautifying procedures and plastic surgery are pushing the age boundaries. A comprehensive survey of AC Nielsen in 42 countries proves that today’s 40-year-olds are comparable to people in their mid-30s of the previous generation. Middle age was considered 50 back then, now it is above 60.

For an appointment, call (+36)1-377-67-37 or go online at www.rendelo.drrose.hu Széchenyi square 7/8, 1051 Budapest

NOTE: ALL ARTICLES MARKED PARTNER CONTENTS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

PROMOTION

www.bbj.hu

39

Budapest Business Journal | April 19 – May 02

UPCOMING EVENTS

APRIL 23

APRIL 23

APRIL 23

APRIL 25

WITH STYLE IN EUROPE – COMMUNICATION AND MARKETING LEADERS’ CLUB WITH MIKLÓS SCHIFFER, STYLE CONSULTANT LOCATION Le Meridien Budapest, Lafayette room,

GERMAN BUSINESS DAY – BUSINESS CONSULTING AND SERVICES LOCATION Német-Magyar Gazdaság Háza,

ST. GEORGE’S DAY 2013 A SCREENING OF WILLIAM SHAKESPEARE’S ALL’S WELL THAT ENDS WELL LOCATION Uránia Film Theater,

EXCHANGE OF EXPERIENCE FOR HR LEADERS LOCATION Német-Magyar Gazdaság Háza,

1051 Budapest, Erzsébet tér 9-10. TIME noon-2 pm ORGANIZER French-Hungarian Chamber of Commerce and Industry FEE Members HUF 7,900 + VAT; non-members HUF 10,300 + VAT CONTACT www.ccifh.hu

1024 Budapest, Lövőház u. 30. TIME 1-6 pm ORGANIZER German-Hungarian Chamber of Commerce and Industry FEE Free, registration required CONTACT www.ahkungarn.hu

1088 Budapest, Rákóczi út 21. REGISTRATION 5:45-6 pm TIME 6-9 pm ORGANIZER British Chamber of Commerce in Hungary FEE Participation is for members only and free of charge, no-show fee HUF 2,900 + VAT CONTACT www.bcch.com

1024 Budapest, Lövőház u. 30. TIME 3-5 pm ORGANIZER German-Hungarian Chamber of Commerce and Industry FEE Participation is for members only and free of charge, registration required CONTACT www.ahkungarn.hu

MAY 6

MAY 7

MAY 6-7

MAY 9

AMCHAM COMMUNICATIONS SCHOOL WITH BENCE GYÖRGY, CHIEF EDITOR OF TV2 NEWS, AND RÓBERT KOTROCZÓ, NEWS DIRECTOR OF RTL KLUB LOCATION AmCham Conference Room,

AMCHAM CAREER SCHOOL WITH VIKTOR KASSAI, INTERNATIONAL SOCCER REFEREE LOCATION AmCham Conference Room,

SAXON-HUNGARIAN BUSINESS RELATIONS IN FOOD INDUSTRY LOCATION Német-Magyar Gazdaság Háza,

ROUND TABLE ON THE ECONOMIC SITUATION AND POSSIBILITIES OF COUNTRIES IN CEE LOCATION Kempinski Hotel Corvinus Budapest, Salon Corvinus,

1051 Budapest, Szent István tér 11. 6th floor REGISTRATION 6-6:30 pm TIME 6:30-8 pm ORGANIZER American Chamber of Commerce in Hungary FEE Free, registration required CONTACT www.amcham.hu

1051 Budapest, Szent István tér 11. REGISTRATION 6-6:30 pm TIME 6:30-8 pm ORGANIZER American Chamber of Commerce in Hungary FEE Free, registration required CONTACT www.amcham.hu

1024 Budapest, Lövőház u. 30. TIME 10 am-6 pm ORGANIZER German-Hungarian Chamber of Commerce and Industry FEE Free, registration required CONTACT www.ahkungarn.hu

1051 Budapest, Erzsébet tér 7. TIME 4-7 pm ORGANIZER French-Hungarian Chamber of Commerce and Industrial CONTACT www.ccifh.hu

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BBJ conference

Too big for a small pond?

GOING GLOBAL CONFERENCE – STARTUP AND INNOVATION IN HUNGARY What are the things that launch a Hungarian startup success story? What are the challenges these enterprises have to face at the start, or even later on? How does the business world welcome a startup concept that stems from Hungary? Is it possible to keep the initial momentum going? How do you make sure that the first idea leading to the breakthrough will be followed by others, and the company won’t be just a one−hit wonder but become an established element of the international business landscape?

SPEAKERS: GYULA FEHÉR co−founder−CTO, Ustream

ÁKOS BERZI CFO, Organica Water

BALÁZS VINNAI CEO, IND Group (TBC)

IMRE HILD CEO, iCatapult

GÁBOR BOJÁR Chairman, Graphisoft

SÁNDOR KÜRTI President, Kürt Co

MIKLÓS FEKETE partner, PwC Hungary

PRISZCILLA VÁRNAGY CEO, Be−novative Inc.

These and other questions will all be answered at the Budapest Business Journal’s conference on May 28, 2013.

MÁRTON JUHÁSZ winner Global Impact Competition2013

DATE: May 28 (9.00 am – 2.00 pm) LANGUAGE: Hungarian (with simultaneous English interpretation) PARTICIPATION FEE: HUF 35,000+VAT/person, (Fee includes: conference documentation, full lunch and coffee breaks.) FOR EARLY BIRDS (registration by May 1): HUF 29,000+VAT/person, DISCOUNTS − BBJ subscibers: 15%, 2−4 registrations: 15%, 5 or more registrations: 20% THE PROGRAM MAY BE SUBJECT TO CHANGE

FOR MORE INFORMATION, UPDATES AND REGISTRATION: WWW.BBJ.HU. E-MAIL: EVENT@BBJ.HU PHONE: +(36) 1 398 0344