Budapest Business Journal 2616

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BUSINESS JOURNAL BUDAPEST

VOL. 26. NUMBER 16

SEPTEMBER 7 – SEPTEMBER 20, 2018

SPECIAL REPORT

Information Technology

SPECIAL REPORT

Trying to Solve the IT Skills Shortage

That there is an acute shortage of IT professionals in Hungary is nothing new. The way the industry is trying to solve it or adapt to it, however, needs to change.  14

NEWS

Upgrades not Timely, Just Yet In a dissapointing end to a hot summer, two of the three largest rating agencies decided not to upgrade Hungary further, for now at least.

But despite that set back to government hopes, the economy has continued to expand.  3 SOCIALITE

Wine Flowing in Budapest The 27th Budapest Wine Festival runs from September 6-9. It is a major spectacle held in the stunning setting of the Buda Castle, and with some 150 producers to sip from. 22

Restoring Ambition

BUS

I NES

S

Nick Kós, the former CEO of PwC Hungary, talks exclusively to the BBJ about what he hopes to acheive as the first Hungarian to head the PricewaterhouseCooper CEE region.  8

CONSCIOUS BUILDING THE LATEST DEVELOPMENT OF CPI www.balancehall.hu

2 | 1 News BBJ

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Budapest Business Journal | September 7 – September 20, 2018

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Zsófia Czifra, Kester Eddy, Bence Gaál,

David Holzer, Christian Keszthelyi, Gary J. Morrell, Rob Smyth, Bálint Szőnyi, Zsófia Végh, Ágnes Vinkovits.

LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Zsolt Pataki PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

IN PRAISE OF PLAIN SPEAKING Having gone so long without an ambassadorial presence in

region. “All together, you have one hell of a market here,

Hungary, albeit the void was ably filled by Chargé d’Affaires

where things are going well; a big, big market.”

David Kostelancik, the United States appears to be wasting no time in making up for it now David B. Cornstein is here.

AmCham members got their first official look at the man –

And he offered the help of the embassy to Hungarian businesses wanting to open up in the States as much as to U.S. firms looking to move into Hungary. “I don’t

assuming they had not already done so at the Independence

care where your business is from. We will open any door

Day party in the ambassador’s residence just days after he

you need opened for you in America. We can even open

Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor. Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu

arrived – on Tuesday, alongside his opposite number, the

government doors here, as well.”

forum attendees they were his kind of people. “I have spent

language in education, or the need to fix the future of

SUBSCRIPTIONS:

40 years – actually more than that – in the business world. It

the Central European University, that might have been

is a pleasure not to be speaking to diplomats and politicians

uncomfortable for his opposite number (he even said

but to business people instead.”

the fact that Hungary is not better known “is the fault of

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News Services Hungary A.M., Energy Today, Regional Today 1 year, from HUF 179,000+VAT 6 months, from HUF 104,900+VAT 3 months, from HUF 58,900+VAT Book of Lists 2017-2018: HUF 19,120+VAT DigiBOL HUF 39,900+VAT Call +36 1 398-0344 or email circulation@bbj.hu What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential.

The ambassador was in a jovial mode, telling the business

Mildly upbraiding his audience for not doing more

He said a number of things, not least on Hungary’s dispute with Ukraine over the use of the Hungarian

Hungary, in my opinion”.) But there was also praise for a

business (for more on this, see our report on page 11) he was

government Cornstein says is open to promoting business.

refreshingly candid – reflecting, no doubt, his background in

“I have now met with every person in this government,

commerce rather than diplomacy.

“To become an ambassador of the United States, first you have to live long enough to get through the process,” he

except for one, who is a fairly important guy [Prime Minister Viktor Orbán], and I meet with him next week.”

The goal of Cornstein’s tenure is very clear, he said.

joked. You also have to attend what he called “ambassador

“The objective of the United States is to have a better

school” for a month. Having done that, he was now standing

relationship with this country.”

here, doing his best, but half of his class from January were still waiting to take up post.

He encouraged business people to look not just at Hungary, but at the whole Central and Eastern European

The blunt speaking ambassador might just be the man to deliver on that.

Robin Marshall Editor-in-chief

Photo: Attila Balázs/ MTI

Photo: Berkó Pál/Fortepan.hu

The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

Hungarian Ambassador to the United States, László Szabó.

THEN & NOW

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Above, right, students at a ceremony welcoming the start of the academic year at a secondary school in Nyíregyháza (230 km northeast of Budapest) on September 3. In the black and white photo, pupils celebrate a similar event in 1955 at an elementary school.

1

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Budapest Business Journal | September 7 – September 20, 2018

News///macroscope

Upgrades not Timely, Just Yet

Although the Hungarian government and the central bank, along with several analysts, think that the country’s economy is fit for an upgrade, two of the three major credit rating institutions have left the country’s sovereign debt rating unchanged in their latest reviews. In the meantime, the economy continues to perform well, producing a 4.6% yearly growth in the second quarter of the year.

ZSÓFIA CZIFRA

Hopes were high in August, when reviews for Hungary’s sovereign debt rating were scheduled at two of the three large international credit rating institutions.

In slightly disappointing decisions, both Standard and Poor’s and Fitch Ratings affirmed the country’s status as is, meaning the Hungarian economy hasn’t received the much awaited – and, according to many officials, the much deserved – upgrade.

On August 17, Standard & Poor’s Global Ratings affirmed Hungary’s “BBB-/A-3” long- and short-term foreign and local currency sovereign credit ratings. The outlook on the ratings remained “positive”.

S&P admitted the achievements the Hungarian economy had recorded, but also highlighted some downsides.

“Hungary’s strong external profile, its resilient export-driven economy, low private sector debt levels, and the flexible exchange rate regime support the sovereign ratings,” S&P said, explaining its rationale for affirming the ratings. “Relatively weak checks and balances between government branches, moderate wealth levels, and high public debt are key constraints on the ratings,” it added.

Signs of Overheating

The rating agency expects Hungary’s GDP growth to peak at 4% or slightly higher this year. Increasing domestic demand and growing wages are among the engine of the growth. However, S&P warns that the economy has started to show signs of

Foreign trade sales in Hungary (January-June 2017/January-June 2018) billion HUF; at current prices 2017 15.782

2018

16.756 14.287

15.426

1495

export

import

1329

balance Source: KSH/MTVA Sajtóadatbank/MTI

Shortly after the disappointing decision by S&P, another rating agency released a similarly dissatisfying report. The Hungarian authorities had again been hoping for an upgrade, which did not happen when Fitch announced on the last day of August that it had affirmed Hungary’s long-term foreign- and localcurrency issuer default ratings (IDR) at “BBB-”, just over the investment grade threshold.

Prior to the review, the National Bank of Hungary (MNB) said Hungary was “fit for an upgrade now”, according to its own assessment. Afterwards, MNB reasoned: “The credit rating agency may wait for indicators to stabilize at favorable levels and for a consolidation in the global investor environment before an upgrade,” adding that it continues to expect an upgrade in future.

In a note, Fitch said that ”Hungary’s ratings balance strong structural indicators compared with ’BBB’ peers against higher public and net external debt, and risks from policy unpredictability and procyclical fiscal policies. The positive outlook indicates the improving trend on net external and government debt,” it added.

But while international credit rating firms are not in a hurry to acknowledge Hungary’s economic performance, second quarter GDP data shows that the country is able to produce steady growth: the Hungarian economy continued to expand significantly in the second quarter of 2018.

According to preliminary data released

by KSH, the Central Statistical Office, GDP growth in Q2

was

overheating. According to the firm, the labor market is extremely tight, and unemployment reached a historical low at 3.6% in July.

“Labor shortages have been reported across almost all sectors, resulting in accelerated wage growth over the past few years. Coupled with continuous minimum wage hikes, this has led to fast growth of unit labor costs, which exceeded that in many neighboring countries. We note that so far this has been mitigated by cuts in social security contributions and corporate taxation. Yet, in the absence of a decisive policy response aimed at boosting productivity, prolonged overheating could weaken Hungary’s external competitiveness and balance of payments performance,” the agency writes in its rationale.

S&P forecasts that the longer term GDP growth should moderate at

around

2-2.5%.

“This reflects Hungary’s structural growth challenges, namely poor demographics – exacerbated by net emigration resulting partly from the official reluctance to accept labor migrants – a large public sector, a challenging business environment, low productivity, and a chronic skills shortage,” it says.

While the government rhetoric claims that Hungary’s economy growth is wellbalanced and each sector contributes to the increase, S&P points out that Hungary’s economy remains one of the most open in the region, with exports accounting for some 90% of GDP, of which more than 16% comes from the automotive sector.

The extent of Hungary’s export sector exposes the economy to external demand, in particular to swings in the German business cycle and the fortunes of the global car industry. Also, post-2020, growth outlook is likely to suffer from potential post-Brexit cuts in the total size of funds, alongside likely changes to their allocation criteria, the agency adds.

“Despite Hungary’s highly pro-cyclical underlying fiscal stance, we assume that pronounced budgetary slippages similar to those reported in 2010-2011 are highly unlikely. At the same time, we believe the government’s plans to reduce general government deficits to 0.5% by 2022 might be challenging to implement,” the agency says.

A Surge in Prices?

“Inflation has remained subdued in recent years, due to stable administrative prices, tax cuts, and low inflation expectations,” the rating agency writes. In the mid-term, it believes tight labor markets, strong domestic demand, and rising energy costs could lead to a surge in prices, bringing the consumer price index slightly above 3% in 2018 followed by stabilization at around 3% in 2019-2020. “This will in particular result from the gradual removal of monetary stimulus, which we expect to start in 2019,” S&P concluded.

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4.6%

year-on-year, accelerating from a 4.4% expansion in Q1. Most analysts agree that this year GDP growth might come to around 4.2-4.3% – the government’s expectation is 4.3% –, but the pace of the expansion will slow down from next year.

Numbers to watch in the coming weeks KSH will release the consumer price index for August on September 11. Next day, a second estimate of the performance of the Hungarian industry in July will be published, to be followed by the agricultural producer prices for the same period a few days later.

On September 14, construction sector data for July will come out.

4 | 1 News

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Budapest Business Journal | September 7 – September 20, 2018

News///in brief

Business Confidence Edges up in Q2 Business confidence improved slightly in the second quarter from Q1, a gauge of sentiment by the Economy and Business Research Institute (GVI) of the Hungarian Chamber of Commerce and Industry shows. GVI’s business confidence index edged up to 42 points in July from 39 in April, the highest level since the gauge was launched in 2010, according to a report on mkik.hu. Sub-indices for the construction and commerce sectors both stood at 45, up five and six points, respectively. The index for business services rose eight points to 39 and the index for the manufacturing sector was unchanged at 41 points. The indices gauge sentiment on a scale of -100 points to 100 points.

PPI up 8.4% in July

Gov’t to provide HUF 7 bln for Chain Bridge Renovation The government will provide HUF 7 billion for the renovation of the Chain Bridge and the Castle Hill Tunnel, as per the request of the Budapest City Council, Gergely Gulyás, head of the Prime Minister’s Office said on Friday, Hungarian news agency MTI reported. In return, the cabinet has asked that the renovation should take no longer than a year and a half to finish, Gulyás said, adding that although this will require serious organizing, it is feasible. He noted that by the end of the renovation works, Széchenyi tér on the bridge’s Pest side would also be refurbished. The Budapest municipal council in April approved HUF 16 bln for the renovation of the Chain Bridge.

Industrial producer prices rose 8.4% in July from the same month a year earlier, the Central Statistical Office (KSH) said on August 31. Prices for domestic sales were up 8.5%, while export prices rose 8.4%. In a month-on-month comparison, industrial producer prices were up 0.2% as domestic prices edged up 0.1% and export prices were up 0.2%. Year-on-year, factory gate prices in the manufacturing sector rose 8.1% in July. Prices of the transport equipment segment were up 10%, and prices in the computer, electronic and optical products segment were up 4.1%. Prices in the food, beverages and tobacco segment were up 2.5%. Prices in the gas, electricity and

steam supply segment rose 9.8%. In January-July 2018, industrial producer prices rose 4.9% y.o.y. compared to the same period last year, as domestic prices climbed 5% and export prices were up 4.9%.

Investment in Hungary Totaled EUR 9.5 bln in H1 The volume of investment in H1 2018 was up by 13.4% year-on-year, rising to a total of HUF 3.113 trillion (EUR 9.5 billion), the Ministry of Finance said in a statement on August 30. In Q2 2018, the indicator showed growth of 15.3% y.o.y. (totaling HUF 1.852 tln). The quarter-on-quarter expansion of 4.2% shows “strong growth momentum” the ministry said in the statement, released on the official government news portal, kormany.hu. It says the favorable data was the result of the implementation of EU-funded projects, the housing boom resulting from the government’s housing program and a corporate income tax rate of 9%. “The EU’s lowest CIT rate is expected to make Hungary even more attractive for investment also in the future,” the ministry says. The volume of output in the construction sector gained 15% y.o.y., fueled by the dynamically increasing volume of infrastructure and housing projects.

Investment in machinery and equipment was also up by 16% y.o.y., thanks mainly to capacity expansion projects. In the commercial accommodation and catering sector, the volume of investment grew by 21% as a consequence of hotel construction and reconstruction works, while that of the construction sector increased by 29%.

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Rózsavölgyi Szalon: Exciting, Culturally and Intellectually Inspiring Meeting Point Growing out of Budapest’s most influential music store and publisher with roots from the 19th century, and scraping through the cultural and political storms of the 20th, Rózsavölgyi Szalon Arts & Café has again become a hub for city intellectuals with a strong cultural thirst. Artistic Director Zsófia Zimányi tells the Budapest Business Journal how it stays devoted to the highest quality. ÁGNES VINKOVITS

BBJ: What are you looking forward to most in the new season?

Zsófia Zimányi: I cannot wait to see our play “Diplomacy” on October 30, since it works up one of the most mysterious stories of the 20th century. Taking place in Paris in 1944, a dozen German soldiers, who have set explosives across the entire city from the SacréCoeur to the Invalides, are facing the 30,000-strong army of the Allies. No one knows how or at what cost, but

a Swedish diplomat finally manages to convince the German commander over the course of a single night not to destroy Paris. For me, this story is about what we can do against oppression and how much can depend on one single person. Then, on New Year’s Eve, when we usually come up with something lighter, we play the “Amazons Three Years Later”, which is the sequel of our three-year-old play the “Amazons” and carries on with the story of three young women searching for partners. It will be a night rich in humor and irony. And there is a third play very much worth

to accept that the men around her take precedence in several aspects: her ideas are either decried or stolen. On top of that, she cannot find support even from the other woman. So this play digs very deep into the dynamics of human relationships and is also interesting since America is often thought to be the symbol of equality, while here we see the complete opposite.

BBJ: Choosing plays about very current or socially hot topics seems to be a strong principle when putting your program together.

ZsZ: Of course. We aim to stage productions that deal with problems interesting for our audience. And people are interested in the world surrounding them; this is what they can connect with.

Zsófia Zimányi being highlighted, something I have read recently and am eager to see on stage. “What We’re Up Against” (Amiért meg kell küzdeni) is written by an American female writer and is about a woman who starts working at a cool and edgy architectural studio in New York with three male colleague and one other woman. Very soon she has

BBJ: And what about your music lineup?

ZsZ: Sometimes we organize events to introduce music records but only quite occasionally. Great venues have been created for this purpose in the past decades – think about MÜPA or the Academy of Music – and we believe that it is better not to run in a competition where you cannot be the best.

BBJ: Looking beyond this very season, what are your long-term plans?

ZsZ: This is our seventh season and we see that we could fulfill our initial aim, which was to become an exciting, culturally and intellectually inspiring meeting point in the city. This is what we would like to keep strengthening in the future too.

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Budapest Business Journal | September 7 – September 20, 2018

Strong Investment Predicted for H2 JLL forecasts that CEE regional investment volume will reach or exceed EUR 12 million, in line with 2016 and 2017 levels. In Hungary several assets of above EUR 100 mln are in due diligence or under marketing with closing expected in the second half.

GARY J. MORRELL

With this pipeline, the annual investment volume for Hungary is set to reach EUR 1.7 billion-1.8 billion. A limited supply of investment grade product is continuing to act as a brake on investment activity, however.

The first half year volume for the Hungarian investment market reached circa EUR 490 mln, significantly below the EUR 1.1 bln H1 2017 level according to JLL figures.

“This disappointing volume is the consequence of the limited availability of core products of scale, as we saw only two transactions with a volume of above EUR

100-150 basis points

Promenade Gardens by Horizon Development.

40 mln in H1 2018, namely Váci Greens D and Premier Outlet Center. Larger transactions are expected in the second half of the year,” said the consultancy.

For the full year, JLL expects around EUR 2 -2.5 bln for Czech Republic. The forecast for the dominant Poland market is that it will reach an all-time

record of

EUR 5.5 bln,

based on the second half year pipeline deals that are committed, in due-diligence and at advanced marketing.

At the same time, the emerging Romania market is expected to reach the EUR 1 bln threshold. Sentiment is seen as improving as financing terms and conditions are getting closer to those in the core Central European markets.

“Poland still has high investment volume whilst other markets are showing lower levels of activity, which is predominantly

Skanska Sells Mill Park Skanska Property has sold its dual-phased, 36,000 sqm Mill Park development to Hungary’s Erste Alapkezelő, a subsidiary of Erste Asset Management, for a reported EUR 100 million. This is the second acquisition deal between Skanska and the Hungarian fund following the Nordic Light transaction in 2016.

GARY J. MORRELL

“The acquisition of Mill Park is in line with our desire to increase the fund’s real estate portfolio with newly built “A” category office buildings. This transaction provides a defensive, longterm sustainable income for the fund, so it serves well the interests of our investors,”

“Erste Real Estate Fund is always on the quest for top technical quality buildings in our home market. Promenade Gardens stands out among our recent acquisitions,” comments Balázs Pázmány, president of the board at Erste Asset Management. This is the completion of a deal agreed earlier, however, and goes into 2017 investment figures.

Local capital provides added security for the markets when it comes to any potential downturn. With regard to the breakdown between investors, domestic capital has been most active in Hungary and Czech Republic, with a record share of volume according to Turpin.

“Of interest is the growth of domestic capital in Czech Republic and Hungarian markets where domestic volumes are growing year-on-year and for H1 2018, make up 67% and 43%, respectively,” he says.

The yield spread between Hungary and Czech Republic and Poland is

commented Balázs Pázmány, head of the board of Erste Asset Management.

Mill Park, located in District IX, is

80% leased

to multiple tenants, including IT Services Hungary, and will be completed in the third and fourth quarters of this year; the project is expected to receive LEED “Gold” certification.

driven by a lack of product,” says Kevin Turpin, head of CEE research at JLL.

Leading Asset Classes

In Hungary, office was the leading asset class with a 58% share of the total volume, followed by retail with 31% and industrial with 10%.

In Czech Republic, office was the again the most favored investment destination with about 50% of total investment volume, followed by retail with 38%.

Back in Hungary, Erste Asset Management has completed the acquisition of the 25,000 sqm Promenade Gardens from Horizon Development, reflecting the role of local money at the high end of the Budapest investment market.

In the current business and economic environment, the office development boom looks set to continue with developers able to source finance, conclude the necessary preleases and sell a development on to investors. Take-up volumes reached 250,000 sqm in the first half year with a current vacancy rate of 7.6% according to Cushman & Wakefield. As much as 76% of the H1 new office supply is pre-let, with a further 168,000 sqm scheduled for delivery in H2. Skanska was advised by Cushman & Wakefield on the sale of Mill Park.

Three Deliveries

Only three schemes were delivered in the second quarter of this year, bringing the total supply of quality office space in Budapest to 3.5 million sqm. However, a shortage of investment grade product is limiting investment market activity.

In Prague, Skanska has sold the 23,000 sqm LEED and WELL accredited Visionary to CA Immo

depending on the asset class and this is not compressing. Despite the perceived solid fundamentals of the Hungarian market, assets are still priced at a significant discount compared to Poland and Czech Republic, where financing is cheaper according to Benjamin Perez-Ellischewitz, head of capital markets at JLL Hungary.

“The region continues to offer an attractive yield profile and the outlook for the remainder of the year is continued activity as investor demand is certainly not reducing,” concludes Turpin.

CEE Prime Yields: Q2 2018 (%) Country Office

Malls

Industrial

Poland

4.75

4.9

6.5

Czech

4.85

4.85

5.75

Hungary

6

6

7.5

Romania

7.5

7

8.5 Source: JLL

6 in Bucharest, also to CA Immo, for EUR 53 mln; the transactions occurred within a two-month period.

With Mill Park close to completion Skanska is looking to source further development plots in Budapest in line with its regional policy of developing office centers in major Central European capitals and leading Polish cities and selling them on to investors. The company is currently developing the 13,000 sqm third phase of the LEED Gold Nordic Light office project in Váci út.

for EUR

68 mln

and in a separate deal the first phase of the LEED Gold accredited Campus

Mill Park by Skanska.

6 | 1 News WHO’S NEWS

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Budapest Business Journal | September 7 – September 20, 2018

Do you know someone on the move? /// Send information to news@bbj.hu

New Leadership Team at Telenor Hungary Telenor Hungary has announced its new CEO, Financial Officer, Chief Marketing Officer and Chief Corporate Affairs Officer.

The mandate of the new leadership team

from Egypt and he has more than 20 years of international experience in digital marketing, brand and product implementation and product development in the field of multinational companies and start-ups. ElSayad comes from Magyar Telekom, where he had been working as marketing director between 2015-2018.

Győző Drozdy is now Chief Corporate Affairs Officer. He was the first Hungarian employee to join Telenor (then Pannon GSM) in 1993. Since then, he has filled several positions at the company, greatly contributing to its achievements over the past 20 years. Since 2011, he has been acting as strategic advisor to the CEO.

Corvinus University Honors BCSDH’s Irén Márta

Jan Hanuš started after Telenor Group recently completed the sale of its Central and Eastern European Assets to PPF Group.

From August 1, Jan Hanuš (pictured above) took over as CEO. Hanuš graduated at the University of Hradec Králové with marketing, economy and IT degrees. He had worked in the FMCGsector for more than ten years, and from 2017 he led the commercial area and HR at the telco division of PPF Group. He also has Hungarian experience, as the CEO and vice chairman of Ceres Sütő Ltd., Győr in 2011-2012.

Martin Oravec joins Telenor Hungary as its new CFO. Oravec started his career in EY and Deloitte in transaction and M&A advisory. In 2009, he joined O2 Czech Republic (formerly Telefónica Czech Republic), a publicly listed company, as head of corporate finance. Since then he has gained a broad range of experience in finance, telecommunications and leadership through various positions in O2.

Mohamed ElSayad becomes the Chief Marketing Officer. He comes

Irén Márta, managing director of the Business Council for Sustainable Development in Hungary, was awarded this year’s Pro Facultate Prize by Corvinus University’s Faculty of Business Administration.

The award was given in recognition of her achievements in the business sector and her activities in the practical and scientific development of this area in cooperation with the university’s Faculty of Business administration.

The prize was presented by dean of faculty Zita Paprika Zoltayné,

scientific vice-rector László Gulácsi, and deputy dean of education Richard Szántó.

Corvinus’ Faculty of Business Administration first awarded the Pro Facultate Prize in 2010, to recognize people who have enhanced the reputation and authority of the faculty in terms of collaboration between the business sector and the scientific world. The title is awarded once a year.

CEU Professor Elected to British Academy Fellowship The British Academy for the Humanities and Social Sciences has named CEU Professor Gergely Csibra a Fellow in recognition of his work studying the cognitive capacities of infants.

Professor Csibra (of the Department of Cognitive Science at CEU) thus joins a community of more than 1,400 of the leading minds that make up the UK’s national academy for the humanities and social sciences.

Current Fellows include the classicist Dame Mary Beard, the historian Sir Simon Schama and philosopher Baroness Onora O’Neill, while previous Fellows include Sir Winston Churchill, C.S. Lewis, Seamus Heaney and Beatrice Webb, a press release sent to Budapest Business Journal says.

Irén Márta receiving her award.

Gergely Csibra This year saw the largest yet cohort of new Fellows elected to the British Academy, with 76 world-leading academics elected.

Gov’t Appoints Magyar Posta CEO Andrea Bártfai-Mager, Hungary’s minister without portfolio in charge of managing state assets, has appointed György Schamschula CEO of state-owned postal company Magyar Posta, national news agency MTI reported.

Schamschula has more than 20 years of finance, banking and business management experience both in Hungary and abroad, the minister said in a statement.

Schamschula worked in financial management in the United States between 2005 and 2012, first for Landmark Group, then for consultancy Deloitte. He oversaw the establishment of a capital financing program at Magyar Export-Import Bank from 2012 until 2017, and served as CEO of leasing company Takarék Lízing from September last year. Schamschula replaces Zoltán Illés, who is leaving his post by mutual consent.

The minister acknowledged Illés’ work to stabilize the operations of Magyar Posta, make upgrades, and put the company’s package delivery business on the right track during his two years as CEO.

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Budapest Business Journal | September 7 – September 20, 2018

Business MVM Hungarowind to Build 110 Solar Plants MVM Hungarowind, a unit of the state-owned electricity works MVM, plans to build 110 small solar power plants, with maximum capacity of 0.5MW, as part of several projects across Hungary this year with European Union co-financing, the company said on August 29. The new power plants are expected to start commercial operation before the end of this year. MVM Hungarowind

Company ///news ELMŰ-ÉMÁSZ to Enter Telecom Market Regional electricity distributor ELMŰÉMÁSZ, majority-owned by Germany’s RWE-EnBW, will start offering clients access to its optical cable infrastructure from this month, chairman Marie-Theres Thiell said on August 28, orientpress.hu reported. The services, offered through its new company ELMŰ-ÉMÁSZ Solution, will mark the company’s entry onto the market for providing telecommunications infrastructure, Thiell said at an event celebrating the 125th anniversary of the Budapest Electric Works. ELMŰ-ÉMÁSZ also inaugurated Hungary’s first large-scale battery energy storage facility in the south of the capital yesterday.

Provisions Release Raises CIB Bank Profit The consolidated first-half after-tax profit of CIB Bank, the local unit of Italy’s Intesa Sanpaolo, rose 25% ADVERTISEMENT

year-on-year to HUF 11.9 billion, lifted by provisions releases, Hungarian news agency MTI reported. Net interest income fell 11% to HUF 9.6 bln and net revenue from commissions and fees dropped 4% to HUF 13.4 bln. Freed up provisions came to HUF 13 bln, up 67% from the base period. CIB Bank had total assets of HUF 1.836 trillion at the end of June, up 9% from the end of 2017. Client loans were up 8% at HUF 821.6 bln and client deposits also rose 8% to HUF 1.285 tln.

DXC Wins HUF 4 bln in EU Funds DXC Technology Magyarország Kft. has won a contract worth some HUF 4 billion to develop the IT system of state-owned railway company MÁV and its passenger unit MÁV-Start, MÁV said on August 31, hvg.hu reported.

The Ministry for Innovation and Technology is covering 90% of the costs of the contract. DXC Technology has 22 months to deliver on the contract.

GVH Closes Procedure Against Google Hungary’s Competition Office (GVH) said on August 31 it had closed a procedure against Google after the company made commitments to inform users how its Allo chat client processes their data “in plain language and in a balanced manner”. Google must also post an educational banner on its YouTube channel for one day in the fourth quarter of 2018 highlighting that it collects and handles consumers’ personal data and recommending that consumers review the privacy policies and settings.

“The rights of consumers to make undistorted business decisions may be violated even if data protection rights are properly observed, if consumers are not supplied with information that would be necessary to make well-established decisions (or not supplied timely with correct information, or supplied timely with misleading information, or the information is not clear enough),” GVH said in a statement explaining its decision.

Number of Companies in Hungary Decreasing According to the National Company Register (Nemzeti Cégtár), there are 550,000 active companies in Hungary,

will build 24 small solar power plants in southwest Hungary for HUF 6.79 billion, 19 in central Hungary for HUF 5.38 bln, 21 in northeast Hungary for HUF 5.94 bln, 21 in western Hungary for HUF 5.94 bln and 23 in northern Hungary for HUF 6.51 bln. Once the investments are completed, the MVM group will have Hungary’s biggest solar power generation capacity, the statement said.

a 22,000 decrease compared to the end of last year, while compared to 2013 there are 90,000 less companies in Hungary.

In rural areas 90% of the companies are micro-sized, with less than ten employees, but depending on where they are located, they have radically different opportunities. That is why the situation of companies located in Budapest and in rural areas must be analyzed differently, László Németh, president of the Hungarian Association of the Craftsmen’s Corporations (IPOSZ) told business site vg.hu. Compared to the liquidated 22,000 companies, 18,000 new ones have been started. This has been an ongoing trend for several years.

Bosch Launches HUF 37 bln Expansion of Development Center

German engineering and electronics company Bosch has launched the expansion of its current development center on Gyömrői út in Budapest’s District X, portfolio.hu reported. The new building will be 90,000 sqm and will provide space for 2,000 more engineers. The development includes the renewal of old roads and the building of new ones in the area as well as the creation of a P&R parking area. There will also be a 10,000 sqm test track for self-driving and electric cars. The project is estimated to cost HUF 37 billion.

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Budapest Business Journal | September 7 – September 20, 2018

Restoring Ambition to the CEE Region Two months into his new role as CEO of PricewaterhouseCoopers CEE, Nick Kós sat down with the Budapest Business Journal for an exclusive interview to discuss how he has found the job, how he got it and what the future might bring.

ROBIN MARSHALL

“It’s been interesting,” Kós says with a smile. It has also been full of travel.

The Irish-Hungarian was CEO of PwC Hungary for six years, but also has previous experience working at both PwC Poland and PwC Russia, so he knows many of the Partners in the business. But a new boss must get around as many of the offices as possible.

The CEE role gives Kós a leadership position taking in around 300 Partners, 10,000 staff and 29 territories. Those postings to Warsaw and Moscow, along with his work on the supervisory board and as chairman of the audit committee, mean he has “a regional footprint and understanding”.

“It is not necessarily new for me, travelling around the region, albeit in a different capacity,” he says. “It is refreshing and exciting going around, meeting Partners and staff and seeing their level of anticipation of a future of change.

Accountants and tax and finance advisers are, for the most part, fairly conservative; they do not necessarily like change. But the people I am meeting are engaged with the idea of change, and that gives me a lot of energy and also a lot of impetus.”

Change is a recurring theme in our discussion. The CEO for the regional business is elected by the Partners for a four-year period. The incumbent, Olga Grygier-Siddons, a Partner at PwC

On Travel “Actually, I have never minded the travel. I spent two years in Moscow and commuted every week. Compared to that, this is a piece of cake! Given its location, it is manageable from Hungary to do a two- or threeday trip a week, or even two if it is necessary. I am also on the global strategy council, so that involves intercontinental travel every couple of months, which

Nick Kós at the annual presentation of the PwC Hungary CEO survey.

Poland, had been in the role since 2014 when she became the first “local” to take on the role, and the first woman.

Continuity vs Change

This time the Partners were given a choice between continuity and change.

The whole process is managed by the supervisory board, with hustings and Q&A sessions held in Moscow, Warsaw and Vienna, in addition to webcasts. It began in February of this year, with the results announced at the end of March.

The winner acknowledges that contested elections, by their nature, can prove uncomfortable but says: “It is healthy for a Partnership that has a democratic process to have a choice and that, along with encouragement from Partners across CEE, was a primary motivation for running for the role. However you have to get the balance right between campaigning and not disrupting the business.”

Kós feels that if PwC is to fulfill its purpose of “Building Trust in Society and

takes a little more planning, but I don’t mind that either. If you are not passionate about this role – I do not look at it as a job – there is no sense in you doing it.

Ultimately, as we always say, this is a people business. Maybe it’s the ‘sociability thing’, being half Irish and half Hungarian, but I enjoy meeting and talking with people, and the feedback I get gives me the energy to do it. This is an incredibly exciting opportunity.”

Solving Important Problems” and a goal of continuously delivering differentiating value to its clients, it must rediscover its ambition. The financial crisis of 2008, and the dip that came in 2011-12 when the expected recovery did not come through in full force, had kept the Partnership in something of a “lock-down” mode.

“Maybe because of that we became a little more cautious. We lost our ambition,

“We have to rediscover the ambition we should have as the great firm we are both regionally and globally. Everything starts with that.” lost our way; we were reactive rather than anticipating and overcoming the challenges we faced.”

He is mindful of the fact that the regional role takes in individual businesses, each with their own country manager, but Kós says there are concepts that he followed in his previous roles that he would like to apply, largely embodied by the motto “Ambition, Action, Achievement”.

Effective and Efficient

“We have to rediscover the ambition we should have as the great firm we are both regionally and globally. Everything starts with that.” The right action then needs to be taken, leading to results, he says.

Crucially, the decision-making processes needs to be agile, effective and efficient.

On the Region and a ‘Balanced Perspective’ “I am the first Hungarian to hold this post, and I am very proud of the region and what it has achieved. The limelight has faded a little recently for the BRIC countries and for us. A big part of my role is restoring our credibility at a global level, giving an independent view to the global network about what is going on in CEE. Hungary, Russia and now Poland are not always seen in the best light. I enjoy seeing the lights go on when you give people a view that is accurate and balanced, about why certain things happen and reminding them of some of the good things that go on here. Very often there is only one perspective given; it is good to have a place at the top table, and I feel it needs to be used to represent the interests of CEE. It is very important for Partners in the U.K. and U.S. to really understand Russia, for example, and its huge potential.

I was in Moscow last week, and it has the feel of a city that is still developing. There is still a lot of tourism post-World Cup, and you really get the feeling that this is truly a global power. We have a great business in Russia, despite the sanctions, which really don’t help us.”

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On Family “My wife and I met at PwC and her understanding of the firm and its commitments and challenges has been a fantastic support. It’s a real team effort with our kids – I have two boys and a girl – all swim, so we have to keep a balance between following them swimming and doing this. But, actually, one of the things that inspires me is the ambition of my family. The kids are all good swimmers, the eldest is a multiple junior Hungarian champion, and participated in the European

“We have to be seen as a firm that develops our people if we are to win the war on talent. This also feeds into subsidiarity, allowing local Partners to ask what is it that makes our firm attractive to the market, and empowering them to find the answers.”

“My approach is based on two concepts: taking personal responsibility, and subsidiarity,” he explains. “We can’t allow ourselves to make excuses and explain things away.” Decisions should be made, action taken, mistakes learned from if necessary, but the staff have to be personally accountable if the business is to be driven forward, he says.

Subsidiarity is also part of that process, “giving Partners the right to make decisions where those decisions need to be made”.

Too much has been centralized, he says. “We have become more corporatized without always helping the individual businesses or achieving great cost savings. Human capital is a prime example, with salary and bonus decisions taken centrally rather than in individual markets; this often robs those businesses of the agility they need to act quickly and secure the best talents. One size does not fit all,” the CEO notes.

Junior Swimming Championships recently in Helsinki, even though at 15 he was very young compared to most of his competitors. My wife has gone back to do a masters at the University of Physical education which supports our sporting life and I am struck by the ambition they all have and determination to succeed, the hard work involved, being smart about what you need to do, what helps and what does not. Seeing them do that makes me very proud and inspires me to mirror their success at PwC.”

While there “obviously needs to be a level of oversight”, Kós says he does not intend to micro-manage. “With my team we are looking at regional functions and how we can support effective decisionmaking. Being closer to the market makes our approach more agile.”

The focus will be on three areas: Digitization; Talent; and Transformation.

PwC has invested in technology businesses, but Kós believes the greater challenge is to be a technology-enabled firm that brings value to its clients by digitizing its core businesses.

“Niche is fine, but it struggles to drive the firm forward. If your core businesses generates 95% of your income and you grow that by an additional 2-3%, you are already achieving something worthwhile.

To match that, niche offerings have to grow by hundreds of percent. It’s clear to me that we have to refocus on the core and enable our Partners with technology

“My approach is based on two concepts: taking personal responsibility, and subsidiarity. We must meet and overcome the challenges of our region, not use them as excuses.”

Business | 9

PricewaterhouseCoopers CEE

1 CEO

29 territories

300 partners

10,000

our relevance. Our core businesses are our core businesses for a reason; it feels as if they have been left a little to one side because we got so excited about technology.”

Investment in the Future

Technology also feeds into talent; enabling people and Partners with technology helps them do their job better, but it also makes PwC more attractive to young talents. Kós says one of the first casualties of the costcutting brought on by the financial crisis was coaching and development. That kind of investment in the future has to be capabilities that match the progress being maintained. made by our clients; match that with the “We have to be seen as a firm that fantastic offerings we have and it increases develops our people if we are to win the war on talent. This also feeds into subsidiarity, allowing local Partners to ask what is it that makes our firm attractive to the market, and empowering them to find the answers.”

Transformation is also linked to the first two. Kós says he would like to see greater leverage of the benefits the global firm can offer alongside allowing the local firms subsidiarity.

“We are proud of the PwC brand, and we either add to that brand or benefit from it. Where we get a referral from the global business, we are the beneficiaries.

If we develop a local client, we are adding to the brand, helping build the global brand. The more we are helping develop the global brand, the more control we will have over our own destiny,” he explains.

“We have to be close to the market, vested in our local markets. Partners need to have ambition about what they can do in Kós (at center, pointing) with his successor the local market, and we have to allow as CEO of PwC Hungary, Tamás Lőcsei. them to benefit from that.”

people

In a little under four years’ time, the region’s Partners will be asked to vote again. The CEO is very clear that, having stood on a platform of change, he will be judged on the results, not least by himself.

“I said that if we do not start to achieve our ambitions I will not stand again. Winning the election was only the first stage.”

Mini CV: Nick Kós

• July 1, 2018-Present: CEO PricewaterhouseCoopers CEE • July 2012-June 2018: Country Managing Partner, PwC Hungary • July 2011-July 2013: Assurance Leader for Hungary and the Western Region, PwC Hungary • January 2010-July 2011: Assurance Leader for Russia and the Eastern Region, PwC Russia • January 2007-December 2009: CIPS Leader & Regional Assurance Clients and Markets Leader, PwC Poland • July 2000-January 2007: Assurance Partner for Hungary, Head of Technology, InfoComm and Entertainment group, PwC Hungary EDUCATION • 1986-1990: University College Cork, Bachelor of Commerce (B.Com.)

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Business

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Budapest Business Journal | September 7 – September 20, 2018

A System to Keep Down and Outs in Their Place I work”), on which he and his employer pay taxes and all the various contributions.

László Murányi is off the streets and resolved to stay that way. Sadly, an estimated 30,000 others are less fortunate, living in shelters, stations, parks and shacks across Hungary. The shelters are typically ridden with bed bugs: personal valuables are at risk of theft. The shacks are unhealthy and illegal, as is sleeping in, or “habitually using”, any public place, according to punitive legislation passed by parliament this summer.

LIN E M O T T O B TH E

László Murányi was never going to be a rocket scientist: even a career as gas heating fitter eluded him: he failed his technical school course after three years’ study. But he was prepared to work Affordable Housing Lacking until he failed to pay a fine for a driving offence, The Hungarian authorities are not alone in seeking to legislate their homeless and ended up in prison. He was homeless, co-citizens out of sight: some great jobless and more or less penniless on release. western cities have pursued the same KESTER EDDY

That kind of experience leads many to depression, alcoholism, crime – and worse.

Murányi however, is made of sterner stuff.

He was down, but not out. “I accepted my situation, but was determined to get out of it,” he says.

He found a job – no easy matter with no permanent home address for the

past six months except “prison” on a CV – and found assistance, via a tiny NGO. The From-Streetsto-Homes Association (Utcáról Lakásba Egyesület) believed in Murányi, and provided a bridging loan – worth HUF 200,000 – to lift him over the financial hurdle to renting his own flat.

Today, he is a productive member of society, earning between HUF 200,000 – 300,000 a month (“It depends on how much

line. But life for the homeless Magyar is especially bleak because the lack of affordable housing makes the first step back to a normal life an insurmountable barrier for so many.

Government officials point to the public work program as a practical way to help, and instil a sense of worthiness to, the unemployed. Indeed, some participants have expressed enthusiasm for the scheme to your correspondent – but those have all had a home (however impoverished) to go back to at night.

The monthly remittance for the homeless is, alone, utterly insufficient to offer any future off the streets.

The task is not easy: the homeless tend to be poorly educated. László Murányi himself says many have simply accepted their situation. Even activist (and some would say optimist) Vera Kovács, the leader of From-Streetsto-Homes, admits that to make it off the streets, at least one-third of the homeless would need “a lot of intensive social care”. That would need trained professionals, and money.

But, she argues, the taxpayers’ money that is spent on the issue – in subsidizing the shelters, and supporting the children who are separated from their parents and taken into care when families lose their homes – at best only maintains the status quo, and longterm, makes matters worse. The children in care, for example, are more likely to suffer psychological trauma – leading to more future caring costs.

In recognition of this, Kovács argues, it is for economic reasons, as much as moral, that many Western governments have enacted programs to help the homeless get a permanent roof over their heads – programs that are notable for their absence in Hungary.

Such programs need planning, take time and cost money, but pay off in the end. If in doubt, just ask László Murányi.

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Business | 11

Photo: Hajnalka Hurta/AmCham

Cornstein: ‘Hungary the Best Kept Secret’ “Good as you have been, you can do a hell of a lot better.” These were the uncomplicated if challenging words U.S. Ambassador David B. Cornstein left with guests as the public part of an AmCham business forum closed on September 4.

ROBIN MARSHALL

Cornstein urged AmCham members to “really ensure you do more business with the United States, because it is there for you”. Cornstein and his Hungarian opposite number, Dr. László Szabó, were at AmCham for the now traditional forum that sees the two ambassadors brought together.

This was the first time Cornstein had spoken to AmCham’s membership, and he was in jovial mood. “This is a very, very impressive audience here today,” he quipped. “As a businessman, I don’t know how much they are charging you, but I would charge double!”

He told members: “Hungary is the best kept secret in the world – especially in America. It is not the first location you think of when travelling, and it is the last place you think of doing business.”

Hungary had not done a good enough job in marketing itself, its “phenomenal workforce”, relatively low cost labor, “ridiculously low, thank God” corporate tax rate and its business minded government.

“You are leaving so much on the table it is not even funny. If you worked for me, you’d have one foot out of the door by now!” He felt businesses should be looking at least at

for next year.

10% gains

Priority Issues

Beyond business, the life-long New Yorker laid out what he sees as four priority issues where he wants to see progress or to help smooth relations: defense spending; energy dependency; Ukraine; and the Central European University.

He was particularly blunt about the latter two. Saying he did not believe Russia would have invaded Crimea had Ukraine been a member of NATO, he pointed out that geography meant it was in Hungary’s interests to have the best relationship possible with Ukraine. He did not personally like the law Ukraine had passed on the language used in education, which prohibits Hungarian and has angered the government here to the extent it has threatened to veto NATO expansion talks, but it is the law, he said.

“What language has to do with NATO I have no idea. They should not be linked together, but there it is.” He

Dr. László Szabó (left) and David B. Cornstein. added, however, that “we are very close to hopefully solving that”, adding that he would do whatever he could to help.

On the CEU, he pointed out that at least

25

senators

had asked him what was going to happen with the university at his hearing prior to becoming ambassador.

“I think I am close to solving it. […]

The university is not going to go away.”

Certainty was needed however, if CEU was

“You are leaving so much on the table it is not even funny. If you worked for me, you’d have one foot out of the door by now!” to continue to attract students and keep its professors. Were the university to relocate to Vienna, it would be bad “for the city, for the country and for the government”, Cornstein warned.

‘Beyond Important’

On the issue of energy dependency, which he described as “beyond important”, the U.S ambassador recalled that in the not so distant past, the United States had been dependent on oil from the Middle East.

Hungary had to find a way to access nonRussian supplies, and work was ongoing to make sure it was no longer

80%

dependent

on one source.

“I don’t care what the names of the two countries are, it is wrong,” he said.

Defense was perhaps a surprising priority, given how close the two countries

are, but Cornstein had in mind one very specific area, the Defense Cooperation Agreement, under which Hungary will be

given

USD 55 million

to be spent on upgrading Hungarian Air Force runways. The final hurdle appears to be over who has jurisdiction over the workers doing the work, but the ambassador pointed out there was some urgency as “that money goes away at the end of September” if there is no agreement.

Ultimately, Cornstein said he was optimistic about all four of his immediate priorities. “These are not for the benefit of the American ambassador, or the U.S. government, but for the benefit of Hungary.”

László Szabó, Hungary’s ambassador to the United States, said that in the year since he last spoke to AmCham (as then ambassador-designate), “a lot of things have moved, changed and improved; there is progress in our relationship”.

The ambassador noted how close U.S. and Hungarian policies are in many fields, and said he was pleased this “conservative approach to the world has been paying off big time”.

Businesswise, the bilateral relationship continues to blossom, Szabó said. “Trade has never been better: in just the last quarter, exports expanded by more than 6%, and imports also grew by more than 4%.”

‘Most Exciting’

Echoing Cornstein’s comments on energy dependency, Szabó recalled that one year ago he had said if American LNG could find its way to Hungary during his five year posting he would consider it a success.

Potential sources via proposed LNG terminals in ports in Poland and Croatia continue to be explored, he said, while (“probably most exciting”) a new source on

Romania’s Black Sea is being explored by U.S. company ExxonMobil.

“Once imports get started, we can get rid of Russian dominance in our market.

That will be a great breakthrough, and I certainly think it is realistic,” the Hungarian ambassador said.

One new announcement he made concerned the November 15 ground breaking ceremony for an innovation center and incubation house on the grounds of the U.S. Embassy in Washington D.C. for Hungarian startups who want to “invade” the American market.

Entrepreneurs had told Szabó they need “a roof over our heads, a desk, Wi-Fi and coffee: this much we can provide”.

“Once imports get started, we can get rid of Russian dominance in our market.

That will be a great breakthrough, and I certainly think it is realistic.”

The embassy is also building a business case for the United States to grant opportunities for Hungarian investors to visit on B1 and B2 visas through what is being called the HUSSAR (HungaryUnited States Supporting Advanced Relations) Act, which would make Hungarian nationals eligible to enter the United States as nonimmigrant traders and investors if Hungary provides reciprocal nonimmigrant treatment to U.S. nationals.

In trade, culture and defense, Hungary and the United States have long been close allies, Szabó noted. “The political relationship between the two countries has also started to grow tremendously.”

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Special Report Information Technology

We all know there is a marked shortfall in the number of IT professionals in Hungary, but what is being done to fill that gap?

Trying to Solve the IT Skills Shortage

 14

Cyber Security ‘Game’ a Serious Exercise  15 How Digital Does Hungary Rank?

 16

‘Outstanding’ ITSH Moving in and Moving On

 17

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Budapest Business Journal | September 7 – September 20, 2018

Special Report | 13

Disruptive IT Education: Strictly á la Carte Please “We’ve been invited to pitch at Stockholm Tech, a major tech gathering which should be a huge milestone to raise our visibility.”

Another popular event in Sweden, Music Tech Fest has bought the prototype to engage female participants by allowing them to code imagiCase on different tunes.

“We get enormous help from Ericsson’s incubator and EIT Digital’s Stockholm office,” adds Pálfi whose success has propelled her all the way to become a nominee for the 2018 European Institute of Innovation and Technology awards in the women’s category.

Coding alone is way too little out there; the IT sector increasingly needs techies with solid business skills. A Europewide education program also available in Hungary offers just that.

Networks Matter

BÁLINT SZŐNYI

He’s the kind of guy who wrote his own algorithm to find the cheapest air fares because he wasn’t happy with the comparison sites on the market. Why? Because he always aims for the best. And he’s also the kind of guy who would regularly mentor SMEs and startups for free just to see them grow. Why? Because he wants to give something back to the community. That is exactly what the purpose of his PhD is also about.

“I’m working on a methodology that is set to optimize agricultural production with machine learning,” Balázs Horváth says.

“If such consequential savings result in keeping food prices steady for a year or two, it was already worth it.”

The doctoral program Horváth is participating in is run by EIT Digital, a European innovation and education organization that bets on turning research into viable products by connecting industry and academia. In this way, it ensures that only industry-tested theses get the green light.

Horváth has the liberty to venture into his four-year PhD. He has just merged his software developing firm with his consultancy, which offers business mentoring and coaching services, so the doctoral stipend is all but icing on the cake. He got so far not least because, prior to his PhD, he had completed an EIT Digital Master’s program where you can

Balázs Horváth

Dóra Pálfi

choose from not only the trendiest technical majors such as data science or cyber security, but you can also master strong business skills.

“In service design class I was made aware of all the mistakes I made with my first venture, which I set up right after starting university,” Horváth says.

“Generation Z is a lot pickier about the way they are taught,” notes László Gulyás, CEO of EIT Digital’s Budapest office. “You can’t just offer them a preset menu; they expect learning skills in á la carte fashion.”

Masters courses are regularly adapted to market demand, with autonomous systems offered for the very first time, for instance.

European students also benefit from the fact that, during the program, they do one year at each of two leading European technical universities and tuition is taken care of.

few years. Pálfi was no IT whiz kid at first; computer science was only her minor.

“While at NYUAD I had a strong focus onacademic research, and I realized I wanted to do something more hands-on and applicable, so EIT Digital’s practiceoriented curriculum grabbed my attention right away,” she explains.

Entrepreneurship initially wasn’t a priority for her, but she quickly embraced it, especially given the inspiring environment in Stockholm. That’s where she did her first year, which lead up to a research project labeled imagiCase.

“The idea is to lower the barrier of entry to programming, for girls in particular,” Pálfi says. ImagiCase is a phone case with embedded LEDs that can be programmed to display any text, design, color through programming with the imagiCase mobile app.

“In this way, computer science is introduced as a tool for customization and self-expression, and based on our research this appeals to ourtarget audience of girls aged 9-15.”

The project turned out to be so exciting that Pálfi had to squeeze in a gap year to focus entirely on it. Her efforts have paid off.

Girl Power in Tech

Dóra Pálfi is also among those

1,350 students

who have been attracted by this form of education across the continent in the past

Eight masters majors are available for EIT Digital students at 18 European universities, with the Hungarian ELTE University and Budapest Technical University among them.

“The goal is to turn the digital nomads of the 21st century into digital conquerors who can make a difference and become true global leaders,” says Gulyás. “We focus on how to prepare this generation for the jobs of the future.”

This is important as the job market is also being transformed. Human resources will be needed mostly in areas where humans are better than robots such as creativity, interaction and managing autonomous tools.

“These masters consist of project works that are like startup hackathons,” says Horváth, recalling his first-year experience in Helsinki. Another plus was the wide range of business aspects that were covered, he says.

“The lawyer of Apple was there too, and he told us what legal loopholes to watch out for when you found your company to avoid problems at the time of an eventual take-over attempt.”

There is an even more important advantage the EIT Digital Master’s program can offer, though. “Apart from crucial business skills, it was the invaluable network that gave me the most,” concludes Horváth. It is time for him to say good-bye as he needs to go back to his research.

“I’m young enough to put 100 hours a week into it, the time for it is now.” The payoff will surely be when we see those food prices stalling as a result.

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Trying to Solve the IT Skills Shortage That there is an acute shortage of IT professionals in Hungary is nothing new.

The way the industry is trying to solve it or adapt to it, however, needs to change.

ZSÓFIA VÉGH

It has been more than three years since the last official figures by Bell research on the number of IT professionals the industry is short of came out. Since then employers and the ICT Association of Hungary (IVSZ), which lobbies for the interests of the industry, have used the 20,000 plus figure at every possible platform to raise awareness of the problem. The government, too, relied on it when creating the Digital Workforce Program, a strategy aimed at making digitally competent workforce available.

Yet even if the program’s educational goals of directing substantially more young people onto a digital career path were accomplished, it would prove too little to fill the gap which has

only widened since. (IVSZ is currently working on updating the figure; it puts it at 30,000-40,000 now.)

Companies need the “mass”, of course, less qualified IT professionals who are able to perform simple tasks. But as more complex projects and R&D centers are brought here, a supply line of the

20%

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

INSIDE VIEW

IT is all around Brigitta Bilinszky IT Team Leader

HAYS HUNGARY There is still a huge labor shortage – approximately 22,000 people – on the ever changing IT market. R&D and AI centers are opening, digital transformation is happening within companies in all sectors, new positions and technologies are appearing, and salaries are further booming: these are the trends and expectations for the rest of 2018 as well.

The perception towards the IT profession itself is also significantly changing. More people are developing into this area with different backgrounds and at different ages. Children are now not just playing with computer and mobile games, they seek to understand the logic behind them and start learning programming at a really young age. Students at the age of 18 are more open to choose to study IT and continue their education in this direction.

People with engineering, finance, marketing and sales backgrounds are eager to invest money and a lot of time to drop their

“Simply, there are not enough children willing or capable of doing university STEM training and fulfilling these tasks.”

upper

of professionals, who will drive these process, needs to be ensured as well.

“Simply, there are not enough children willing or capable of doing university STEM [standing for science, technology, engineering-and mathematics] training and fulfilling these tasks,” Barbara Fazekas, head of IVSZ’s Digital workforce and education working committee told the Budapest Business Journal.

previous profession and start their career as a software developer.

Though there is growing interest, it can still nowhere near match the number of experienced IT professionals needed to fill the open positions present on the market. And the race for the best people is getting tougher.

This year’s key buzzwords are cloud based solutions, machine learning/ deep learning, AI, data science, and IoT (internet of things). If a company is opening up a new business or an existing company is starting a new division with these areas involved, they can more easily get the attention of the IT people.

We continually hear about the number of the open positions, the SW developers we are lacking and the areas that are suffering most from the shortage, but we hear less often about how good the people who we have here in Hungary are. Top programmers, world famous Hungarian start-ups, successful green field projects are all present on the Hungarian market and the success stories are sure to be continued.

This is an exciting field with seemingly limitless opportunities. One way or another, IT is here in our everyday life and it will continuously create new jobs and ensure career development for the professionals working within this field.

www.hays.hu

work-life balance means more than earning an additional HUF 150,000.

Nor does not help that, being a globalized industry, IT professionals can earn European salaries. Candidates are well aware of this.

“IT is the industry where categories among candidates with different level of experience have blended [the most],” says Mirtill Megyeri, co-founder of Zyntern, a job platform. So did salary levels. Junior level programmers, with no experience (that is, senior college students) have HUF 400,000-450,000 (gross) salary expectations, according

Barbara Fazekas The group headed by Fazekas, who was formerly co-founder and a CEO of Green Fox Academy, a coding boot camp company based in Budapest, has done a feasibility study into this problem, which is currently being validated by the biggest employers.

What Hurts Most?

It also set out to identify how the skills and labor shortages have affected employers in the past two business quarters. “We wanted to find out what hurts them most,” Fazekas says. The strategies of the Digital Workforce Program are good but an HR director can

“Our publications focus on the role of employers.

We don’t want to tell them what to do – they need to tailor these methods according to their needs. We just want that they start thinking about this problem.” hardly relate to “trying to direct more teenage girls towards IT”, she notes.

Fazekas’ committee quizzed

136

companies

and summarized the results in its “Labor Market Symptom Map” (Munkaerőpiaci Tünettérkép).

The major problem, it appears, is that employers can’t get a grip on the changing labor market – neither in recruitment nor in labor retention terms. Classic packages no longer work here, Fazekas notes. For many,

to Zynterns’ research. Applicants with some experience can ask for HUF 600,000-650,000 (gross). Salaries are capped at HUF 800,000 – one million, but compared to other industries one can reach this level fairly quickly, Megyeri notes.

Counter offers, the sum an employer offers to try and retain an employee wishing to leave, are also very revealing.

In other industries, employers would offer a 20-30% raise. In IT, this can be as high as 50-60% percent, Megyeri says.

Breaking Point?

It is little wonder, then, that, according to the expert, the Hungarian labor market is getting to the point where it can no longer offer more. Employers simply won’t be able to pay more than HUF 1 mln-1.2 mln. Startups can’t even match that, owing to their salary policies. International companies also come to Hungary in search of cheaper workforce, and will cap salaries. As a result, professionals keep leaving the country, further exacerbating the shortage.

So what are employers supposed to do?

Based on the problems diagnosed in the symptom map, IVSZ will issue another publication with its proposed solutions.

“Obviously, it is not a handbook for life,” Fazekas says. But it will contain figures on how much it costs for an employer to lose an employee and also methods for retention. “This way we can convert this problem still handled on a moral basis (‘Is an employee asking for a month’ sabbatical every year shameless?”) into a business one, and companies may consider that it may be worth creating a system adjusting to these needs,” Fazekas says.

IVSZ hopes to publish its guidelines this month. “Our aim is to have as much publicity/echo as we can: this way employers can’t avoid taking a stance,” the expert says. “The Digital Workforce Program tells what the government needs to do. Our publications focus on the role of employers. We don’t want to tell them what to do – they need to tailor these methods according to their needs.

We just want that they start thinking about this problem.”

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

PRESENTED CONTENT

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Special Report | 15

Cyber Security ‘Game’ a Serious Exercise

Trust is the key in IT Security Outsourcing

international level,” Kemendi explained.

“The Invitech team, consisting of around a dozen experts, succeeded in coping with many technical challenges, managing them according to the processes of the company and reporting to ENISA. Press inquiries simulated during the two-day exercise also had to be dealt with. Coordinating the issues with other relevant participants, the company was able to react to these inquiries in time.”

This year’s exercise was the fifth event organized thus far by ENISA. To date, Invitech has participated successfully in two international exercises and one national event. Also participating from Hungary this year were Magyar Telekom and Telenor, in addition to a number of players from public administration.

CTO Kemendi added: “Invitech worked from beginning to end with excellent cooperation and at a high standard, supported to a great extent by Zsolt Virág, the leader of the team, who performed the very complex task of ensuring smooth coordination both within the company and with other participants and organizers of the game.”

Based on conclusions drawn from the previous exercise, Invitech created and operated an online forum that enabled the participants to coordinate their positions concerning the preliminary assessment and evaluation of incoming attacks and incidents, to request the opinion of others and to coordinate their planned measures within the frame of the rules.

The two-day international exercise was evaluated by domestic stakeholders under the coordination of the National Cyber Security Center. The organizers and domestic players all gave positive feedback on the online forum initiated

by Invitech. They reported that this forum contributed significantly to the successful performance of Hungarian participants.

It seems businesses have finally got the message about the need for proper IT security, even if company size is a big determinant of how easy it is to cope.

“Large companies probably have the resources in terms of people and money to handle IT security themselves. That’s usually not the case for smaller sized firms,” says László Marton, senior director and business unit lead for enterprise and governmental units at Invitech. But even larger companies, those which could handle security tasks internally, are beginning to turn more often to outside providers such as Invitech.

“We have one large client to whom we have been talking for five years about network provision, but we have found them very closed. But when it comes to IT security, we suddenly found them much more open to outsourcing the tasks.”

Trust is the key, Marton says. Clients have to believe a service provider will take care of everything.

“When we established IT security as a service from our data center it was such a complicated field that customers at first were very closed to the idea. But over a lot of meetings, we have been able to demonstrate the need and the service; now clients think it is a good solution for the topic.”

Earlier this summer, the European Union Agency for Network and Information Security (ENISA) organized Cyber Europe 2018, a two-day exercise involving more than 900 security specialists from about 300 organizations across 30 countries. Hungary’s Invitech was among those taking part.

BBJ STAFF

The exercise saw participants contending with a simulated series of incidents that impacted on organizational, local, national and European levels. Over the course of the two-days, more than 23,000 incidents and/or attacks (so-called “injects”) were launched by a radical group across Europe, which mainly impacted air traffic. The principal task was to localize and manage these attacks.

“The company took its participation very seriously as security is an essential element of Invitech’s services; the stakeholders and suppliers of the air transport sector also constitute a major part of Invitech’s customer base,” said the firm’s chief technical officer Zsolt Kemendi. “A lot can be learned from such an exercise; in a real emergency all the experience gained could be utilized to the benefit of clients.”

ENISA controlled the exercise from its Cyber Exercise Platform in Athens while the participants “played” from their own workplaces. Invitech set up its “general headquarters” in a building which also hosts its DC-10 data center and Security Operation Center, as a

Zsolt Kemendi major part of its technical infrastructure and expert staff is concentrated here.

Technical Incidents

“Invitech managed a number of technical incidents and press inquiries during the exercise at both a national and

Fundamental Trust

Once the fundamental trust is established, Marton says the benefits of outsourcing IT security quickly stack up. Keeping abreast of all the regulations, keeping IT engineers up-todate with their training (and paying them and providing them with interesting challenges), use of the latest technologies, with international accreditation are all taken care of for the client.

“Most companies that deal with it internally are reactive; they respond to an attack. The approach of an IT security service provider is more proactive, however, with the emphasis on preventing the attacks in the first place.”

Marton says Invitech adjusts the packages it offers according to the size of company, starting with covering basic requirements for SMEs all the way up to bespoke systems for the largest multinationals.

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16 | 3

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

How Digital Does Hungary Rank?

A snapshot from the EU’s 2018 Digital Economy and Society Index of the progress Hungary has made, and where it needs to do more.

When it comes to business digitization and e-commerce, Hungary ranks 25th. The commission considers Hungary as having “an alarmingly low” share of enterprises using business software to share information electronically.

BY SAM MACMAHON BALDWIN, FOR THE BBJ

It’s difficult to attend a business conference or trade fare these days without “digital transformation” or some variant of this term forming part of the agenda. In fact, several recent events have been dedicated exclusively to this topic – for example the Digital Business Transformation conference held in April at the new Ericsson House and the American Chamber of Commerce in Hungary and Hungarian Investment Promotion Agency “Digital Mythbusting” conference held in May. At these events the message is clear: Develop digitally or get disrupted. But what actually is the state of play on digital transformation in Hungary? Where are we doing well and where are we falling short?

The European Commission attempts to answer these questions in its annual digital scoreboard – the latest of which was released in May 2018. The scoreboard measures the performance of each EU country in a wide range of areas, from connectivity and digital skills to the digitization of businesses and public services.

Overall, Hungary

graduates with IT qualifications and to improve their skills. The goals through various programs is to double the number of IT graduates

by

2021.

Sam MacMahon Baldwin performance connectivity and citizens’ use of internet services. Also important is the fact that Hungary’s relative progress in terms of digital development is on par with the EU average.

ranks

23rd

out of the 28 EU countries. The top-five is perhaps unsurprisingly dominated by Scandinavian countries, with Denmark, Sweden, and Finland followed by the Netherlands and Luxembourg.

There is, however, also praise for Hungary to be found in the commission’s report – particularly in the areas of high-

Good on Ultrafast Connectivity On connectivity in general, Hungary ranks 18th. The commission praises the “very strong platform-based competition” amongst the telecoms operators. It notes significant progress in the take-up of fixed broadband, surpassing the EU average of 75%. And almost half of homes subscribe

The EC’s Digital Economy and Society Index HUNGARY DESI 2018 value

EU

DESI 2017

DESI 2018

rank

value

rank

value

4a1 Electronic Information Sharing

14%

q

28

16% 2015

27

34%

4a2 RFID (Radio Frequency ID)

2.8%

q

23

3.9%

16

4.2%

4a3 Social Media

15%

22

13% 2016

21

21%

4a4 elnvoices

8.4%

p

26

8.1%

25

2017

4a5 Cloud

10.7% p 2017

22

8.0%

23

2017

4b1 SMEs Selling Online

12.5% p 2017

20

11.7%

20

17.2%

4b2 E-commerce Turnover

10.0% p 2017

14

7.6%

18

10.3%

24

4.5%

23

8.4%

% enterprises % enterprises % enterprises % enterprises % enterprises % SMEs

% SMEs turnover

4b3 Selling Online Cross-border % SMEs

the EU countries. As for advanced skilled professionals, the number of ICT specialists is just below the EU average and the number of STEM (science, technology and mathematics) graduates has increased, although it still remains relatively low.

The commission points to the fact that government and industry are seeking to address the shortage of ICT professionals by a specific program aiming to increase the number of university and college

2017 2017 2017 2017

5.2% 2017

p

p

2014

2016 2016 2016 2016

2015

2017 2017 2017

NA

NA

2017 2017 2017

to at least 30 Mbps, as opposed to the EU average of 33%. In addition, Hungary scores well above the average on ultrafast connectivity, mainly as a result of its widespread cable networks.

Moreover, the European Commission makes a point of mentioning the 5G Coalition (5GC), initiated by the Digital Success Program, that was formed with the aim of making Hungary a major European center of 5G innovation and taking a leading role in the region in testing 5G-based applications.

When it comes to business digitization and e-commerce, Hungary ranks 25th.

The commission considers Hungary as having “an alarmingly low” share of enterprises using business software to share information electronically. Although businesses’ use of social media, e-invoices, and cloud services have all grown, a significant gap to the EU average remains.

With respect to e-commerce,

only

12.5%

of SMEs sell online, with the EU average being 17.2%.

The commission therefore considers it “absolutely vital” for the competitiveness of the Hungarian economy that the government continues and extends its programs to digitize Hungarian companies – referencing the Digital Success Program 2.0 (DJP 2.0) and the Modern Business Program.

More to do on Human Capital On human capital in a general digital context, Hungary ranks 21st among

The commission has also measured Hungarians as such in terms of use of internet services. The Hungarians are high scorers and ranked 12th in the EU. When it comes to use of social networks, Hungarians are in fact the second most frequent users in Europe.

Finally, in terms of digital public services, Hungary is ranked second-tolast as 27th which – believe it or not – is an improvement from last year’s position of dead last at 28th.

The commission’s findings show that although Hungary is well into its digital transformation journey, there is still a fair way to go. Businesses in particular will need to continue to adopt and incorporate digital technologies aiming to enhance efficiency, reduce costs, better engage customers and business partners, and generally grab the opportunities of the Digital Single Market.

Mini-bio Sam MacMahon Baldwin is an attorney (advokat in Denmark) and a registered European lawyer (Budapest), having joined Szecskay Attorneys-at-Law’s EU Competition Law practice in June. Originally a British national, he practiced for eight years in Copenhagen, Denmark with toptier law firm Gorrissen Federspiel.

He is a seasoned compliance and competition law practitioner with experience of advocacy before national competition authorities and the European Commission.

He has represented companies in national court proceedings as well as at the General Court and European Court of Justice in Luxembourg.

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

PRESENTED CONTENT

3

Special Report | 17

‘Outstanding’ ITSH Moving in and Moving On When IT Services Hungary Kft. moved into its new state-of-the-art headquarters in Mill Park on August 30, the investment was so significant that it featured not just local CEO Erik Slooten, but also Adel Al-Saleh, the boss of German parent T-Systems International and Tamás Vargha, Secretary of State of the Ministry of Foreign Affairs and Trade.

BBJ STAFF

“We’ve not only moved, we’ve moved forward,” Slooten told a packed press conference in the offices. “ITSH has developed enormously in the more than ten years of its history: it has not only grown but is carrying out increasingly complex and ever higher added value tasks as a member of the Deutsche Telekom group,” he stressed.

ITSH describes itself as the biggest ICT service provider in Hungary, employing more than 4,600 people at its four bases in Budapest, Debrecen, Pécs and Szeged, and 2,200 in Budapest alone.

In answer to a question from Debrecen TV, Slooten said the company had moved offices in Budapest because: “We are growing and we needed more room; the lease on the old office was coming to an end and we could not expand there.

This is also a more modern office, better suited to the requirements of an IT company.”

Just how much that is true is illustrated by just one of the facts and figures ITSH put out to mark the move. The new building has 840 km of FTP cable networked throughout the building; laid end to end, that’s enough to stretch between Budapest and Rome.

The involvement of Adel Al-Saleh, CEO of T-Systems International, in the official inauguration of the new HQ, is testament to how important ITSH has become to the international business and its nearshoring philosophy.

Adel Al-Saleh

Outstanding Role

“Our corporate group can be successful when we place our clients at the center of attention,” Al-Saleh said told the gathered digniataries. “We are continuing to strengthen our nearshore activities, and in this we are giving an outstanding role to ITSH as one of the key strategic enterprises of the Telekom group.”

Speaking to the Budapest Business Journal after the main event, Al-Saleh was asked about the significance of the investment in the new HQ. “The strategy for T-Systems is that we have an ambition to create a global workforce with the right distribution for delivery of services; that requires the right costs and the right

skills and the right geographic fit, all of which we find in Hungary,” he said “We have been investing In Hungary for ten years. As part of that delivery strategy it is very important. Up to now we have been concentrating on scaling; now we are moving to the next level, moving up the value chain, doing more work complex in this location, more end-to-end delivery. That requires developing more competences as the staff take ownership of more work,” he told the BBJ. “If you look at skills we have at ITSH, there was initially a lot of specific entry level engineering work. The staff has proved itself able to handle some tasks very well – software, security, networks – and many of the skills have been developed so that it can take on more complex work today, and tomorrow can move to handling work end-to-end from Hungary without any other outside involvement.”

“The strategy for T-Systems is that we have an ambition to create a global workforce Developing Leaders Slooten explained that taking on end-towith the right distribution end tasks requires different skill sets from for delivery of services; that when you deal with just specific parts of a “We are now looking to develop requires the right costs and process. the leadership skills of many of our staff,” the right skills and the right he said.

And where does ITSH fit into T-Systems geographic fit, all of which long-term plans? “We are looking at developing centers of excellence that are we find in Hungary.” able to offer something unique, that are

Erik Slooten

ITSH HQ in Numbers • 17,345 sqm total floor area • 2,371 workstations • 400 parking spaces • 840 km of FTP cable networked throughout the building • 94 meeting rooms • 20 telephone-conference booths • 3 video-conference rooms • 2 TelePresence rooms leaders in the world for the company; that is our vision. Erik and his team are developing now what that might be for Hungary. Already they do important work here in IT development, security and data protection and cloud. I am sure there will be an opportunity to create more here in the next couple of years.

ITSH’s offices at the Mill Park East building have been designed in accordance with so-called alternative workspace strategy (AWS) principles. In this flexi seat system, ITSH employees can book workstations and take advantage of functional spaces such as video-conferencing rooms, telephoneconferencing booths and chill-out rooms. A green communal space and open-air gym have been established in the building’s 2,200-sqm garden. The structure of the office has been awarded LEED (Leadership in Energy and Environmental Design) green building certification.

The company says on its website that it is “continuously growing” and has job vacancies in all four of its bases.

“Pursuant to our company’s philosophy, we not only offer a job, we also provide an opportunity for our future employees to gain professional experience and test their knowledge, while working in a multicultural environment. Therefore we are waiting for candidates who like challenges and their work is an important part of their lives.”

18 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

Software developers

4

libRa sZoftveR ZRt.

5

kulCs-soft sZámításteCHnika nyRt.

6

7

8

www.nexon.hu

www.libraszoftver.hu

www.kulcs-soft.hu

sysdata pse kft.

www.sysdata-pse.com, www.pse.hu

gRepton infoRmatikai ZRt. www.grepton.hu

itWaRe kft.

www.itware.hu, www.createsmartapp.com

1,842

3,762 2,158

1,760

1,760 761

1,650

1,650 768

1,321

870

820

1,406 853

1,152 670

99.87

Germany

–

Siemens

Ÿ

Ÿ

Ÿ

Ÿ

Nigeria, USA

FusionR ERP, FusionR BSS, FusionR Utility, FusionR SFA, FusionR EDM, VERK/400, cDMS

Invitech, Heineken, NISZ, Garantiqa Hitelgarancia, Seven-Up Bottling Company, Vasivíz, Nyírségvíz

✓

✓

✓

✓

Ÿ

NEXONbér, NEXONtime, NEXON_PORT, NEXONhrm

9

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

USA, Romania

Kulcs-Ügyvitel, Kulcs-Könyvelés, Kulcs-Bér, BizXpert

60

Austria, Germany

Ÿ

Ÿ

Ÿ

Ÿ

Siemens

✓

✓

✓

✓

✓

✓

✓

✓

–

✓

–

✓

oWneRsHip (%) HungaRian nonHungaRian

top loCal exeCutive Cfo maRketing diReCtoR

addRess pHone fax email

1,229

– evosoft GmbH (100)

istván petényi Erika Balogh Bíróné Zoltán Gönye

1117 Budapest, Kaposvár utca 14–18.

(1) 381-6400 (1) 381-6631 sales@evosoft.com

120 73

Individuals (100) –

Csaba Rozenberszki Judit Andráskó Zsolt Rozenberszki

1038 Budapest, Ráby Mátyás utca 7.

(1) 436-7850 (1) 436-7851 info@rrsoftware.hu

✓

247

Individuals (100) –

szilárd ocskay, katalin sass Judit Nyeste Rita Lovas

1138 Budapest, Váci út 185.

(1) 465-5100 (1) 465-5101 nexon@nexon.hu

✓

55

Individuals (75), Volán Elektronika Zrt. (25) –

kálmán faur Zoltán Komora Petra Borbély

1113 Budapest, Karolina út 65.

(1) 255-3939 (1) 209-1477 info@mve.hu

Tibor Kulcsár (96) shareholders (4) –

ervin szabó Péter Szentesi Miklós Dulkai

1016 Budapest, Mészáros utca 13.

(1) 336-5300 (1) 336-5309 info@kulcs-soft.hu

Individuals (100) –

ákos szekendy – –

1143 Budapest, Gizella út 51–57.

(1) 471-3000 (1) 471-3002 contact@ sysdata-pse.com

Protomix Zrt. (34), Zoltán Madár (30.50), ZB Home Ingatlanhasznosító Zrt. (25.50), András Süli (10) –

Zoltán madár – –

1087 Budapest, Könyves Kálmán körút 48–52.

(1) 204-7730 (1) 204-7731 mail@grepton.hu

Individuals (100) –

sándor dankó – –

1117 Budapest, Budafoki út 209.

(1) 463-0620 (1) 463-0621 infomail@itware.hu

✓

✓

5.14

UK, Germany

Ÿ

Ÿ

✓

✓

–

✓

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

✓

✓

–

✓

949

no. of full-time employees on august 1, 2018 of tHese, full-time softWaRe developeRs

total net Revenue in 2017 (Huf mln) in H1, 2018 (Huf mln) 2,519 1,450

distRibution of oWn pRoduCts

3

nexon kft.

www.rrsoftware.hu

2,317

Resale

R&R softWaRe ZRt.

Ÿ

majoR Clients in 2017 Consulting

2

20,835

softWaRe pRoduCts

installation

www.evosoft.hu

20,835

main expoRt destinations

evosoft HungaRy kft.

softWaRe Related aCtivities

softWaRe expoRt in 2017 as a peRCentage of total Revenue

1

Company Website

net Revenue fRom softWaRe development in 2017 (Huf mln)

Rank

Ranked by net revenue from software development in 2017

Ÿ

Ÿ

Ÿ

90 14

92

Ÿ

59 47

21

Ÿ

9

multisoft kft.

612

1,107 686

86

UK, USA, Germany, France

MobileNAV (mobile app for Microsoft Dynamics NAV), Servotion (field service solution)

Ÿ

✓

✓

✓

✓

65 21

Gábor Kelemen (73), Judit Gyenes Kelemenné (27) –

gábor kelemen Orsolya Bozsóki István Kapocsi

1112 Budapest, Kőérberki út 36.

(1) 310-1492 (1) 310-1497 sales@multisoft.hu

10

teRC keReskedelmi és sZolgáltató kft.

402

855 617

–

–

TERC V.I.P. (GOLD, SILVER, BRONZ), TERC-ETALON

Parliament, ministries, municipalities

✓

✓

✓

✓

34 3

Magdolna Demeter (60), Miklós Konrád Molnár (30), Miklós Molnár (10) –

konrád miklós molnár Judit Horváth Magdolna Demeter

1149 Budapest, Pillangó park 9.

(1) 222-2402 (1) 222-2405 terc@terc.hu

IFS Applications ERP/EAM/ESM system

BioTech USA Kft., Vajda-Papír Kft., ANY Biztonsági Nyomda Nyrt., FÉMALK Fémöntészeti és Alkatrészgyártó Zrt., Híd-csoport

✓

✓

–

✓

27 6

– IFS WORLD AB- IFS CEE (100)

Zsolt Weiszbart – Gábor Halász

1132 Budapest, Váci út 22–24.

(1) 236-3700 (1) 236-3701 infohu@ifsworld.com

Gábor Cseresnyés (100) –

gábor Cseresnyés – –

2071 Páty, Kökény utca 3734. hrsz.

(30) 600-1400 (1) 700-4500 info@calltec.hu

Individuals (100) –

ákos balogh Enikő Kovács Ágnes Kramer

1135 Budapest, Mór utca 2–4.

(1) 237-9810 (1) 237-9811 saldo@saldo.hu

www.multisoft.hu

www.terc.hu

11

ifs HungaRy kft.

12

CallteC Consulting kft.

13

www.ifsworld.com

www.calltec.hu

saldo pénZügyi tanáCsadó és infoRmatikai ZRt. www.saldo.hu

380

764 380

221

221 154

Ÿ

Bulgria

99

783 411

–

–

–

–

MOL Fleet Solution F1-P1 fleet Kft., Euroleasing Kft., management system, Eurorisk Kft., ALD Pillar accounting and Bulgaria, MKB-Eurofinance system leasing Autópark Zrt.

✓

✓

–

✓

Ÿ Ÿ

Saldo Creator, Integrated (ERP) system, web-based small enterpreneurial software

✓

✓

–

✓

46 8

Budapest Zoo, Széchenyi István University, Dist. 15 and 16 municipality

3

www.bbj.hu

balabit-euRope kft.

NR www.balabit.com

gRapHisoft se NR

www.graphisoft.com

NR

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NR

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logmein kft.

NR

www.logmein.com

miCRosoft NR magyaRoRsZág kft. www.microsoft.hu

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–

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1,633

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4,930

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15,322

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13,693 (2016)

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10,125

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Rank

Budapest Business Journal | September 7 – September 20, 2018

35

Ÿ

Special Report | 19

oWneRsHip (%) HungaRian nonHungaRian

top loCal exeCutive Cfo maRketing diReCtoR

addRess pHone fax email

AMCS Kft. (100) –

tamás szabó – –

1117 Budapest, Infopark sétány 1.

(1) 205-0055 (1) 205-0056 info@alerant.hu

– BalaBit IT Security Deutschland GmbH (Ÿ), BalaBit S.á.r.l. (Ÿ)

bradley omar Haque – –

1117 Budapest, Alíz utca 2.

(1) 398-6700 (1) 208-0875 info@balabit.hu

✓

193

✓

✓

354

– Nemetschek AG (100)

viktor várkonyi Gábor Svéd Ákos Pfemeter

1031 Budapest, Záhony utca 7.

(1) 437-3000 (1) 437-3099 mail@graphisoft.hu

✓

✓

✓

315

4G Nyrt. (100) –

Zsolt kovács – –

1037 Budapest, Montevideo utca 8.

(1) 270-7600 (1) 270-7679 info@humansoft.hu

Ÿ

Ÿ

Ÿ

362

– IBM Ireland Product Distribution Limited (100)

péter szalay Árpád Koncz Svetlana Stavreva

1117 Budapest, Neumann János utca 1.

(1) 382-5500 (1) 382-5501 info@hu.ibm.com

Ÿ

354

– Logmein Ireland Holding Company Ltd. (100)

john joseph markey, andrás láng – –

1061 Budapest, Andrássy út 9.

(1) 413-3780 – recepcio.bp@lonmin.com

Ÿ

215

– Microsoft Corporation (100)

gabriella bábel Katalin Antal –

1031 Budapest, Graphisoft park 3.

(1) 437-2800 (1) 437-2899 sajto@microsoft.com

– COM3 Consulting S.á.r.l. (Ÿ), D&K Fortescue Holdings Ltd. (Ÿ)

giles derek shrimpton – –

1037 Budapest, Szépvölgyi út 35–37.

(1) 872-0000 – legal@nng.com

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Ÿ

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Ÿ

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NR

nng SzoftverfejleSztő Kft.

Ÿ

36,385

Ÿ

Ÿ

Ÿ

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Ÿ

Ÿ

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Ÿ

Ÿ

888

NR

oRaCle HungaRy kft.

Ÿ

21,528 (2016)

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

370

– Oracle Nederland B.V. (100)

titusz Csaba puskár – –

1095 Budapest, Lechner Ödön fasor 7.

(1) 224-1700 (1) 214-0070 –

Ÿ

4,910

✓

229

Individuals (3) Qualysoft Holding Ltd. (97)

zoltán Kővári Tamás Zimányi –

1118 Budapest, Rétköz utca 5.

(1) 889-9800 (1) 889-9810 office@qualysoft.com

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986

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Individuals (100) –

lászló szalóki Anikó Nagy Norbert Somkutas

1133 Budapest, Váci út 76.

(1) 461-8030 (1) 352-1553 revol@revolution.hu

Ÿ

34,900

1000+

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– SAP SE (100)

balázs ablonczy György Simon Gergely Karkiss

1031 Budapest, Záhony utca 7.

(1) 885-7300 (1) 885-7300 –

15 8

Zsolt Koltai (100) –

Zsolt koltai – Diána Wágner

1149 Budapest, Nagy Lajos király útja 117.

(1) 220-6458 – sales@trilobita.hu

– UNIT4 Business Software Holding B.V. (100)

tamás Wehring – –

1023 Budapest, Lajos utca 28–32.

(1) 436-0540 (1) 388-2178 contact.hu@unit4.com

– UNIT4 Business Software Holding B.V. (100)

tamás Wehring – –

1023 Budapest, Lajos utca 28–32.

(1) 436-0540 (1) 388-2178 contact.hu@unit4.com

www.navngo.com

www.oracle.com

Qualysoft ZRt. NR

www.qualysoft.com/hu

Revolution NR softWaRe kft. www.revolution.hu

sap HungaRy kft.

NR www.sap.hu

tRilobita NR infoRmatikai ZRt. www.trilobita.hu

unit4 Coda HungaRy kft.

NR www.unit4.com/hu

vt-soft kft.

NR

www.unit4.com/hu

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

474

Ÿ

615 (2016)

Ÿ

565 (2016)

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

REVOLUTION deep. erp, REVOLUTION Iroda++, rEVOL Express

Balatoni Hajózási Zrt., RSM Hungary Zrt., Prímaenergia Zrt., Accent Hotel

Ÿ

SAP

Ÿ

Ÿ

TriDoc document management solutions, DocuBank secure document cloud, TriWorkflow, TriProject, TriCommission

OTP Bank Nyrt., UniCredit Bank, Linamar Hungary Zrt., Bank of China Magyarország, Magyar Lapterjesztő Zrt.

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Ÿ

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Ÿ

Ÿ

8

Ÿ

30

Ÿ

20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

Systems integrators

eRp

soFtWaRe development

it seCuRity

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mixed

t-systems HungaRy ZRt.

95,702

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✓

✓

✓

✓

2

dxC teCHnology magyaRoRsZág kFt.

23,573

www.hp.hu

Ÿ

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Ÿ

Ÿ

– ES Hague B.V. (Ÿ), ES Hague II B.V. (Ÿ)

Zoltán Czibók – –

1114 Budapest, Bartók Béla út 43-47.

(1) 279-8000 (1) 229-9000 cegugyek@hp.com

david blunck Gerald Grace Csaba Bőthe

2040 Budaörs, Edison utca 4.

(1) 801-1500 (1) 801-4424 vip@invitech.hu

soFtWaRe

1097 Budapest, Könyves Kálmán krt. 36.

(1) 452-1400 (1) 452-1401 info@t-systems.hu

HaRdWaRe

Zoltán kaszás – –

unix

Magyar Telekom Nyrt.

(100) –

WindoWs seRveR

addRess pHone Fax email

novell

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top loCal exeCutive CFo maRketing diReCtoR

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soFtWaRe

www.t-systems.hu

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Company Website

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total net Revenue in 2017 (HuF mln) total net Revenue in H1, 2018 (HuF mln)

Ranked by total net revenue in 2017

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inviteCH megoldások ZRt. www.invitech.hu 3

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–

✓

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✓

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China CEE Fund (99.99), other (0.01) –

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(100) –

istván brandhuber – –

1134 Budapest, Róbert Károly körút 70-74.

(1) 437-5200 (1) 437-5299 info@delta.hu

–

–

–

–

–

✓

Ÿ

–

–

✓

–

✓

✓

Ÿ

Ÿ

– IBM Ireland Product Distribution Limited (100)

péter szalay Árpád Koncz Svetlana Stavreva

1117 Budapest, Neumann János utca 1.

(1) 382-5500 (1) 382-5501 info@hu.ibm.com

–

–

✓

✓

✓

–

MOL, NISZ, Magyar Telekom, MVM, KIFÜ, MAVIR, Auchan, Dockler, MNB

✓

✓

✓

✓

✓

✓

✓

✓

Bravogroup Holding Kft. (100) –

árpád kucska Dániel Sutus –

1145 Budapest, Újvilág utca 50–52.

(1) 358-6350 (1) 358-6359 info@euroone.hu

✓

✓

✓

✓

✓

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✓

4G Nyrt. (100) –

Zsolt kovács – –

1037 Budapest, Montevideo utca 8.

(1) 270-7600 (1) 270-7679 info@humansoft.hu

✓

✓

–

✓

✓

–

✓

– S&T AG (100)

Péter Dezső Szabó Sándor Kulcsár Tímea Soós

2040 Budaörs, Puskás Tivadar út 14.

(1) 371-8000 (1) 371-8001 info@snt.hu

✓

Inter-Computer-Holding Kft. (100) –

tamás molnár János Bence Bajzáth –

1118 Budapest, Gombócz Z. utca 12.

(1) 411-3720 (1) 411-3749 info@intercomputer.hu

tibor gombos – Helga Szántó

1152 Budapest, Telek utca 7–9.

(1) 470-5000 (1) 470-5011 info@nador.hu

23,168

4

delta CsopoRt

20,326

5

ibm magyaRoRsZági kFt.

16,284

6

euRo one sZámításteCHnikai ZRt.

15,873 13,250

7

HumansoFt kFt.

13,693 (2016)

–

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Ÿ

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8

s&t Consulting HungaRy kFt.

13,461

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9

inteR-ComputeRinFoRmatika ZRt.

7,557

10

nádoR RendsZeRHáZ kFt.

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www.ibm.com/hu

www.euroone.hu

www.humansoft.hu

www.snt.hu

www.intercomputer.hu

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–

–

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István Bánlaki (52.50), Tibor Gombos (47.50) –

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– Dimension Data Holdings Nederland B.V. (100)

istván simon Mariann Köteles László Demeter

1117 Budapest, Budafoki út 60.

(1) 482-9500 (1) 482-9501 HU.Info@eu.didata.com

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– Accenture International S.A.R.L. (Ÿ), Accenture Minority I B.V. (Ÿ)

tomas volek – – Zoltán Kővári, luca turmezey, lászló gáspár, tamás Zimányi Tamás Zimányi –

1138 Budapest, Bence utca 1.

(1) 327-3700 (1) 266-7709 Info_Budapest@ accenture.com 1118 Budapest, Rétköz utca 5.

(1) 889-9800 (1) 889-9810 office@qualysoft.com

www.nador.hu

–

–

✓

✓

✓

–

Magyar Posta, NISZ, MLSZ, municipalities, Fővárosi Vízművek

11

dimension data magyaRoRsZág kFt.

5,361 4,544

–

–

✓

✓

✓

–

Ÿ

12

aCCentuRe tanáCsadó kFt.

13

QualysoFt ZRt.

4,910 2,737

–

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✓

✓

14

duna elektRonika kFt. www.dunaelektronika.com

4,475 2,220

–

–

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15

HostlogiC ZRt.

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1,303

–

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17

www.accenture.hu

www.qualysoft.com/hu

www.hostlogic.hu

www.kurt.hu

18

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www.dimensiondata.com

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Ericsson Magyarország Kft., Mazars Kft., Ép-Gépész Holding Kft., Knorr-Bremse Vasúti Jármű Rendszerek Hungária Kft., Bonafarm Zrt.

–

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–

–

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Individuals (3) Qualysoft Holding Ltd. (97)

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Ÿ

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–

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–

–

Starpool Holding Hungary Kft. (85), Gábor Juhász (5) Freed Rebecca Lee (10)

peter Freed János Kóti Bernadett Bak

1183 Budapest, Gyömrői út 99.

(1) 666-1600 (1) 350-5660 sales@dunaelektronika.com

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–

–

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– Techwave (100)

péter Fárizs, Zoltán görbics Adrienn Szilvássy Attila Molnár

1134 Budapest, Váci út 35.

(1) 237-1730 (1) 350-4113 info@hostlogic.hu

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–

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János Kürti (37.30), Sándor Kürti (37.30), József Kmetty (25.40) –

sándor kürti – –

1118 Budapest, Rétköz utca 5.

(1) 424-6666 (1) 228-5414 kurt@kurt.hu

–

BioTech USA Kft., Vajda-Papír Kft., ANY Biztonsági Nyomda Nyrt., FÉMALK Fémöntészeti és Alkatrészgyártó Zrt., Híd csoport

–

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– IFS WORLD AB- IFS CEE (100)

Zsolt Weiszbart – Gábor Halász

1132 Budapest, Váci út 22–24.

(1) 236-3700 (1) 236-3701 infohu@ifsworld.com

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4

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

Socialite Appreciating Budapest’s Jewish History: Stone Soup and Celebration

three stars appear on Saturday night. It’s ushered in by lighting candles and reciting a blessing.

It’s possible to experience Jewish culture According to American cookbook writer in Budapest without trying too hard. You and journalist Joan Nathan, “Throughout may not visit the magnificent Dohány utca their wandering history, Jews have adapted Synagogue, the largest in Europe, or take their life-styles to the local culture. Food is a walking tour of the old Jewish quarter no exception. Following the same dietary in the city center. But you’re absorbing laws, Jews, relying on local ingredients, a little of Budapest’s Jewish heritage developed regional flavors. Because they without even knowing it. have lived in so many places, there is no And that’s a great blessing. I can’t think of ‘Jewish food’ other than matzah; haroset (the another European city where this is possible. Passover spread); or cholent or chamim (the Soho, north and east London used to have Sabbath stews that surface in different forms great Jewish restaurants, bagel shops and in every land where Jews have lived).” salt beef bars where goyim (non-Jews) like My first taste of cholent was at Kőleves me could stuff their faces and eavesdrop. on Kazinczy utca. “Kőleves” means “stone Today, apart from outposts like the fantastic soup” and refers to an ancient Eastern bagel shop on Brick Lane in the East End, European story, the basics of which you these have pretty much disappeared. can find on Wikipedia.

I’m using the Yiddish word for praise, One day, some travelers arrive in a village probably incorrectly, but you’ll notice carrying nothing but an empty cooking pot. an overwhelming emphasis on food in None of the villagers want to share their my farloyb of Jewish culture. This is for food with the hungry travelers, who fill the three reasons. pot with water, drop in a large stone, and Eating the food of an ethnic, religious or social group is the best way to show respect and have a chance of being tolerated, if not accepted. There’s always a story connected to food that will give you an insight into a people’s history and way of life. The Jewish food I’ve tasted so far in Budapest has been delicious.

When I come up to Budapest from the countryside, I love being able to drop into Frohlich Bakery and Café on Dob utca for coffee and the best flódni I’ve tasted so far in Hungary.

If you didn’t already know, and I certainly didn’t, flódni was traditionally made for Hanukkah, the Jewish holiday that takes place in December and celebrates the rededication of the Holy Temple in Jerusalem DAVID HOLZER

More to Life Than Food

Organized by the Budapest Jewish Federation (BZSH) and Broadway Event Kft.,

around

15,000

Jewish and non-Jewish visitors. More and more of these are tourists.

Music is, of course, the other perfect way into appreciating a culture. The festival program always reflects both Jewish tradition and contemporary

“This was the time of the Jewish renaissance in Hungary, mainly in Budapest. The Hungarian Jewish Community wanted to show itself, to enjoy freedom of selfrepresentation.” cultural trends. This year, the festival included the world-famous Budapest Klezmer band, the Barcelona Gipsy Orchestra, chief cantor Gergely Nógrádi and violinist Korcsolán Orsolya.

Although the festival is the highlight of the year, there are always Jewish cultural events happening in Budapest. I’d suggest you visit Spinoza, the theaterrestaurant on Dob utca. The flódni there is excellent, as is the entertainment.

Shalom!

Photo by Jorn Pilon/Shutterstock.com

One of the great, unexpected pleasures for me of getting to know Budapest has been dipping my toe into Jewish culture.

place it over a fire. A villager becomes curious and asks what the travelers are doing. They explain that they’re making “stone soup” which is delicious. They’d be delighted to share it with the villager, but it needs a little bit of garnish, which they don’t have, to improve the flavor.

The villager, thinking about the fantastic soup, is happy to part with a few carrots.

Another villager wants to know about the pot and the travelers tell them about stone soup. This villager hands over some seasoning. And so on it goes until the soup, now filled with ingredients, is ready. The travelers remove the stone and share the soup with the villagers.

Although the travelers tricked the villagers into sharing their food with them, everyone gets to eat something delicious.

For me, there’s something particularly Jewish about this story. A group of wanderers uses their wiles to trick initially unfriendly, not so smart people into parting with something they didn’t want to share but with happy results for all.

The cholent at Kőleves is great. There’s also a vegetarian option. But if you’re looking for something a little more authentic, check out Fülemüle on Kőfaragó utca, down from Astoria. The cholent there is absolutely fantastic but incredibly filling. In this recent summer heat, a mouthful is enough.

the Budapest Jewish Cultural Festival is a unique event that runs from late August up until early September. There’s nothing else like it in Central and Eastern Europe.

Andrea Deák, one of the organizers of the festival tells me that it first took place in 1998, towards the end of the first decade following the collapse of socialism in Hungary.

“This was the time of the Jewish renaissance in Hungary, mainly in Budapest. The Hungarian Jewish Community wanted to show itself, to enjoy freedom of self-representation,” she says.

Today, it is the most popular Jewish event of the year in Hungary, with

in

165 BC.

Flódni is made with poppy seeds, apple, walnut and plum jam, each layer separated by a thin slice of pastry.

Sabbath Stew

I only discovered cholent relatively recently.

This is the stew traditionally made before the Shabbat, when Jewish law doesn’t permit any cooking. Shabbat runs from just before sunset on Friday evening until

The Dohány utca Synagogue is only the most obvious example of Jewish culture in Budapest.

Socialite

22 | 4

www.bbj.hu

Budapest Business Journal | September 7 – September 20, 2018

Wine Flowing in Budapest and Beyond By the time you get your hands on this paper, the 27th Budapest Wine Festival (which runs from September 6-9) will be in full swing. While there are many tastings on in Budapest these days, the Budapest Wine Festival is still a major spectacle held in the stunning setting of the Buda Castle, and can keep wine lovers occupied for days with some 150 producers to sip from.

The Budapest Wine Festival benefits from a great backdrop in the the Buda Castle.

Furthermore, vintners from across the land are unleashing many brand-new releases.

One such wine comes from a cooperation from two Villány wineries: Heumann and Jackfall, and is a REDY 2017 – a blend of 51% Portugieser (provided by Jackfall), 35% Kékfrankos and 14% Kadarka (both grown

by Heumann), vinified only in the tank.

The idea to team up came from a local marketing mastermind after Erhard

ROBERT SMYTH

ADVERTISEMENT

Heumann said that his winery didn’t have the necessary Portugieser required to make REDY. The REDY concept, incidentally, is a new initiative to make light and fruity wines that appeal to Generation Y, instead of the robust, full-bodied, tannic wines that Villány is traditional noted for.

Lucky Gen Y: There are plenty from Generation X, Baby Boomers and even beyond have been crying out for wines that slip down with ease, or as they say in the trade these days, wines with good drinkability (many robust Villány reds can be heavy going after one glass).

Tasting Heumann and Jackfall’s REDY Kollab 2017 (to give the wine its full name), on a hot August day at the Jackfall winery, just after it was bottled – it really hit the mark with its zesty palate with light tannins and vibrant acidity. It oozes red fruit (raspberry, strawberry and sour cherry) with a touch of anise, violet and mixed spices.

This is coming out a bit later that some other members of the REDY family and is expected to cost a good deal below HUF 3,000 a bottle, although the final pricing is yet to be set.

“All our wines need time,” says German Erhard Heumann, who owns the winery with his wife Evelyn, a Swiss-Hungarian.

Erhard notes that he just held a tasting with people from the older generation in Switzerland, and they were very into it.

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2018. 08. 31. 14:59:04

Heumann and Jackfall are two excellent wineries that sometimes fly under the radar in Hungary. Jackfall is a delight to visit, with tastings conducted in a charmingly restored old Swabian house, in its long adjoining rooms, or out on the terrace, in Kisjakabfalva (220 km south of Budapest). Jackfall’s limited-edition oak aged rosé from the 2017 vintage also impressed with more mouthfeel than the regular rosé, but with little lost in the way of fruit. Heumann’s wines are actually made out in an industrial facility in Siklós (just 30 km south of Pécs), but the winery now has a cute tasting cellar on the high street in Villány.

Erhard Heumann is upbeat on the prospects of the 2018 vintage, which he describes as quite balanced. Although it was quite hot, it was not very hot with the maximum temperature of 32ºC (89.6ºF) until mid-August, when it then peaked at around 34ºC (93.2ºF). However, the wines started

to suffer from an almost total lack of rain for four weeks starting towards the end of July (fortunately there had been sufficient rainfall up until the end of June). However, rain came when it was desperately needed and with cooler nights now with us, the aromas of the grapes have become much better. He expects the harvest to be finished by the end of September, instead of the usual mid-October.

Tokaj’s Füleky is introducing a range of single vineyard wines to the public for the first time at the festival, including a terrific Sárgamuskotály Dobai from 2017. Füleky winemaker György Brezovcsik says that he likes this grape as dry as can be. The result is quite dramatic and perhaps a bit intense compared to what you’d expect from a Sárgamuskotály, but this somehow manages to be floral and fruity, yet quite full-bodied at the same time, with an exciting peppery finish. Not yet in the shops, this is HUF 2,690 direct from the producer.

Kabar (a crossing carried out in Tokaj of Hárslevelű and Bouvier) 2017 from the Vinnai vineyard with its loess top soil over volcanic dacite bedrock, is priced by the producer at HUF 3,900 and shows why it was a good idea to make this one of the official grapes of Tokaj, with its tropical ripeness and smooth (almost dry) palate.

The number of attendees at the Budapest Wine Festival in the last three years has ranged between 35,000 and 40,000, according to Rita Oláh, head of PR and Communication at Magyar Szőlő- és Borkultúra Nonprofit Kft., the organizer. When I spoke to her in late August, two weeks before the festival, she was hopeful of more attendees in 2018, with some 27% more people having indicated they would be going than in recent years. However, she noted that it all depends on the weather.

Some of my favorite memories of the festival involve braving the downpours and getting the winemakers more or less to myself.

If you are not done with the tasting, a great way to follow up the Budapest Wine Festival is to take off down to the southern wine region of Szekszárd. Szekszárd’s Harvest Days (Szekszárdi szüreti napok) festival, from September 13-16 is always a joy to attend with the winemakers themselves out in force in the town’s pretty central square.

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