Budapest Business Journal 3016

VOL. 30. NUMBER 16

SEPTEMBER 9 – SEPTEMBER 22, 2022

HUF 1,850 | EUR 5 | USD 6 | GBP 4

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

SPECIAL REPORT INSIDE THIS ISSUE

IT & System Integration Challenges Await in Booming IT Integrators’ Market The pandemic gave a much-needed push for businesses toward digital transformation, which has lifted the profile of IT integrators and digital service providers. While the growth potential is immense, the market is facing internal and external challenges.

The BBJ takes an overview of the industry with T-Systems Hungary.  16

IT News Roundup 4iG, State Acquiring Vodafone Hungary; Science, IT Teachers Especially Lacking; Delta Systems Wins Almost HUF 900 mln in Contracts; and IT Professionals Mull Leaving Hungary After Kata Change.  17

A Welcome Return

SOCIALITE

Mörk’s Psychedelic Soul Finds a Foreign Audience Don’t quote him on this, but David Holzer believes “soul futurists” Mörk might be the first ever Hungarian band to be mentioned on the U.K. music website NME. And it called them “entirely engrossing.”  22

NEWS

The war Against Inflation to go on The 13.7% CPI measured in Hungary in July is way above the 9.8% European Union average, though still nowhere near the 80% inflation seen in Turkey or the official 22% in war-ravaged Ukraine.  3

BUSINESS

Szabolcs Pintér, SAP Hungary’s managing director, hails the relaunch of the “essential” SAP NOW annual conference, the largest in the region, after a two-year COVID-caused hiatus. It also marks the 25th anniversary of the firm here. 11 BUSINESS

Independent Conservative Newspaper Battles to Survive Newspaper publishers in the serious “broadsheet” category would argue it’s never been an easy business, made progressively harder by the internet, COVID, and now rising operating costs. In Hungary, arguably no paper has had it tougher than Magyar Hang. 10

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Budapest Business Journal | September 9 – September 22, 2022

IMPRESSUM

THE EDITOR SAYS

BUSINESS CHALLENGES MORE THAN JUST HOT AIR

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia

Czifra, Kester Eddy, Bence Gaál, David Holzer, Christian Keszthelyi, Renáta Kónya, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth.

LISTS: BBJ Research (research@bbj.hu)

An at times uncomfortably hot summer recedes in the rearview mirror as we advance into the fall. But as the days draw in and the temperatures drop, it seems inevitable there will be plenty more uncomfortable days ahead.

The United Kingdom, or more accurately the Conservative Party, has changed leader with Liz Truss taking over as the new Prime Minister on September 6. Commentators have described her inheritance as “an intray from hell.” I was interviewing a Hungarian CEO the other day, and it struck me that this might be the most challenging time to do business since the 1970s and possibly trumping even then. The energy crisis back then must undoubtedly have been traumatic to live and work through (I have only my parents’ horror stories to judge by), with the threats of blackout prompting energy rationing and shortened work weeks. The inflation at the time was no joke either, but at least there was no state-on-state warfare raging on the European continent.

The economic headwinds may not be legion, but they are several and could be overpowering.

The pandemic has slipped down the news agenda, but it hasn’t gone away, and as we work through September and into Q4, there must be a real danger that a new wave could return, along with the flu season. (And a word of warning on that front: Australia is the bellwether for Europe when it comes to flu, and the season there started earlier this year, meaning it may well do so here, too.)

Supply chains have somewhat recovered, but it would not take long for more lockdowns in China,

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say, to disrupt them again. Then we have inflation, which shows no sign of slowing down anytime soon.

Hungary has a particular challenge all of its own in coping with near full employment and the constant battle to source adequate workforce. This appears in all kinds of areas. There are not enough GPs or teachers, for example. In the latter case, there is, in particular, a shortage in the natural sciences and IT. And talking of IT, that sector may have its own worries to confront soon, with large numbers of professionals reportedly considering a move abroad on the back of the changes to the simplified tax regime known as Kata.

Perhaps the biggest worry, though, will be energy, despite government assurances that enough gas has been sourced to mean “people will be able to heat their homes during the cold winter months, and the Hungarian industry and economy will remain functional,” to quote State Secretary Tamás Menczer.

Having the gas is one part of the equation. Knowing how much it will cost is another.

Energy, and the many questions surrounding it, will be the topic for our next CEO Breakfast Briefing, in partnership with the German-Hungarian Chamber of Commerce and Industry at the Anantara Hotel New York Palace on September 28. But I suspect it will be a matter that we come back to again and again for the remainder of this year, at the very least.

Keep well, keep warm and carry on!

Robin Marshall Editor-in-chief

Why Support the BBJ? • Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be.

• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities.

Now, more than ever, factual business reporting is vital to good decision-making.

For more information visit budapestbusinessjournal.com

Photo by Fortepan / Sándor Bojár

• Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value.

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• Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together.

THEN & NOW The chocolate factory in Diósgyőr (186 km north east of Budapest, near Miskolc) has been manufacturing happiness for six decades. In the color photo from MTI, taken on September 6, Chocolate Santas are being made; it is the only Nestlé location that produces hollow figures.

The black and white image from the Fortepan public archive shows the same factory 55 years ago, then owned by Magyar Édesipar Szerencsi, with hollow chocolate rotary phones on display.

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Budapest Business Journal | September 9 – September 22, 2022

News

Speedy Expansion

• macroscope

Battle Against Inflation to go on, With no Immediate end in Sight

ZSÓFIA CZIFRA

Hungary’s inflation, which accelerated at its fastest in 24 years, had left no other choice for the central bank than to raise interest rates by the most in the European Union. At its latest rate-setting meeting, the Monetary Council of the National Bank of Hungary (MNB) hiked the base rate by 100 basis points to 11.75%.

Currently, the base rate is higher than it was during the

2008

financial crisis,

when it peaked at 11.5%, after an extraordinary rate hike between October 22 and November 25, 2008.

The decision was in line with expectations. “The further rise in inflation and persistent inflation

Numbers to Watch in the Coming Weeks July construction sector data will be published on September 15. The KSH will release its report on the state of the Hungarian labor market on September 22. The next rate-setting meeting of the Monetary Council is scheduled for September 27.

Energy Demand in Hungary, Jan. 2021-Aug. 2022

“Maintaining tighter monetary conditions for a longer period is warranted to manage increasing second-round inflation risks resulting from persistently negative supply effects.”

“Maintaining tighter monetary conditions for a longer period is warranted to manage increasing secondround inflation risks resulting from persistently negative supply effects,” the statement added. The council reiterated that the tightening cycle would continue “until the outlook for inflation stabilizes around the central bank target in a sustainable manner and inflation risks become evenly balanced on the horizon of monetary policy.”

Draining Liquidity

The MNB said it would continue its cycle of interest rate hikes with inflation risks on the rise. To enhance monetary transmission further, the Monetary Council also introduced three measures to help

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that month, year-on-year. Based on working-day adjusted data, production rose by 6.6%. According to seasonally and working-day adjusted data, industrial output was 1.1% higher than in June 2022.

The preliminary data of industrial production in July indicates more significant than expected growth and show a favorable picture for the state of the economy. However, according to analysts speaking to the national news agency MTI, the breakdown of supply chains and the rise of energy prices overshadow the short-term outlook.

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Sky-rocketing Prices

Source:

risks warrant the decisive continuation of the tightening cycle,” the council reiterated in a statement released after the meeting.

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Actual electricity consumption in Hungary per month, GWh

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With inflation soaring across Europe, Hungary is proving no exception.

In fact, the 13.7% consumer price index measured in July is way above the 9.8% European Union average, though still nowhere near the 80% inflation in Turkey or the official 22% in war-ravaged Ukraine.

Hungary’s economy expanded at one of the fastest rates in the European Union in the second quarter, Minister of Finance Mihály Varga said in a Facebook post following the release of the data. He added that Hungary’s 6.5% GDP growth in Q2 was more than 50% above the EU average.

A graphic in the post shows Hungary’s Q2 GDP growth, adjusted for seasonal and calendar year effects, was the third-highest in the EU, after Slovenia and Portugal.

Hungary’s industrial production also performed relatively well in July.

According to the KSH, the volume of the industrial output grew

drain interbank liquidity. The bank will raise the required reserve ratio set for the banking system as part of these measures.

The MNB was the first European Union central bank to start raising interest rates in June 2021 and has lifted its base rate by more than 1,000 basis points since then.

But inflation, running at 13.7% yearon-year in July, has outpaced the bank’s forecasts. Deputy governor Barnabás Virág said earlier in August that the bank must use all tools to fight inflation. He said it could peak later and at a higher level,

around

18-19%,

than previously expected, and will likely start declining only from next year and at a slow pace. Hungarian core inflation surged to an annual 16.7% in July, the highest in 25 years.

In the meantime, the Hungarian economy is holding up surprisingly well, even if it’s only for the time being, and darker times surely lie ahead. The second quarter GDP data exceeded analysts’ expectations. The Hungarian economy expanded by 6.5% in Q2 compared to the same period of last year.

From the previous quarter, the expansion was 1.1%, and for the first half of the year, the data came to 7.3% on a yearly basis. Although an apparent slowdown cannot be avoided in the second half of the year, the overall annual GDP growth might be between 5-6%.

On a year-on-year basis, price rises of 27% were recorded for food in July. Margarine (by 65.8%), bread (by 57.9), cheese (by 52.6%), pasta products (by 49.1%), milk products (by 43.8%), poultry meat (by 38.8%), rolls (by 38.5%) and eggs (by 37.5%) all became markedly more expensive. The price of seasonal food products (potatoes, fresh vegetables, and fruits) went up at a below-average rate, by 13%. Chocolate and cocoa cost 12.7% more, sugar rose 8.4% and edible oil 6.9%. Consumers paid 14% more for consumer durables, including 20.1% more for kitchen and other furniture, 18.2% more for living and dining room furniture, 17.9% more for second-hand passenger cars, and 17.5% more for new passenger cars. Alcoholic beverages and tobacco prices rose by 11.2% on average, with alcohol up by 13.2%. Pet food became 33.1% dearer, household repair and maintenance goods’ prices were up 26.5%, toiletries rose by 16.9%, and motor fuel was 6.7% higher. Service charges were up by 6.8%, within which taxi costs were 27.4% more, household repair and maintenance rose by 20.7%, the repair and maintenance of vehicles jumped 16.4%, and recreational services became 13.1% more expensive.

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Budapest Business Journal | September 9 – September 22, 2022

Hungary Sends Mixed Messages on Ukraine, Says Goodbye to Gorbachev Hungary will have enough gas this winter to supply its households and the economy, State Secretary Tamás Menczer at the Ministry of Foreign Affairs and Trade told TV news channel M1 on September 5. “Gas is flowing to Hungary, where people will be able to heat their homes during the cold winter months, and the Hungarian industry and economy will remain functional,” Menczer said.

NICHOLAS PONGRATZ

The news came in light of the indefinitely suspended closure of the Nord Stream pipeline last week, completely cutting off the supply of Russian gas to that region of Europe. The pipeline is owned and operated by Nord Stream AG, whose majority shareholder is the Russian state-owned company Gazprom, which said the connection would be closed for maintenance until the company could receive supplies currently under sanction.

This closure comes on the heels of a deal brokered by Minister of Foreign Affairs Péter Szijjártó with Gazprom on

Ukraine

Crisis Roundup three Russian nationals be removed from the EU’s sanctions list, Politico reported. Two of the diplomats identified the Russian businessmen concerned as Alisher Usmanov, Petr Aven and Viktor Rashnikov.

Another example of mixed RussoHungarian messages came when Prime Minister Viktor Orbán led a Hungarian delegation paying final respects to former Soviet leader Mikhail Gorbachev at a public funeral ceremony held on September 3 in Moscow, according to Radio Free Europe. Curiously, he was one of the relatively few world leaders to attend.

Many Western countries such as Germany, the United Kingdom and the United States were represented by their ambassadors.

In this photo released by the Press Office of the Prime Minister, Prime Minister Viktor Orbán pays his respects at the funeral of former Soviet leader Mikhail Gorbachev in Moscow. Photo by Vivien Cher Benko / Prime Minister’s Press Office / MTI. August 31, which he said would provide an additional 5.8 million cubic meters of natural gas per day for Hungary throughout September and October.

Szijjártó said Gazprom delivered up to 2.6 million cubic meters of gas per day in August, in addition to the volume stipulated in the long-term contract.

The additional volumes contribute to the safety of Hungary’s energy supply, he said, citing Eurostat data that reserves in Hungary’s gas storage facilities exceeded 36.5% of annual average consumption, compared to the EU average of 21.5%.

While Russia continues its gas deliveries to Hungary, Budapest proceeds to make deliveries of its own to Ukraine. Some 41,000 doses of the Pfizer COVID vaccine were delivered to Transcarpathia, in the west of Ukraine, Szijjártó said in a video message posted on his Facebook page on September 6.

In addition to the medical support, the Hungarian Reformed Church (MRSZ) announced that it had donated HUF 81 million (EUR 200,000) to the Transcarpathia Reformed Church (KRE) to support the creation of bomb shelters.

The donation will be used to set up and equip shelters in four secondary schools in the region and an elderly care home operated by KRE in Berehove.

The MRSZ had already contributed HUF 21 mln to cover the utility costs of 76 congregations over three months. The charity has also collected non-perishable food items worth HUF 41 mln, which will be delivered to Transcarpathia to help communities there in the coming months.

Yet, even as Hungary continues to provide support for Ukraine, it also seems willing to try to lessen sanctions against Russia. According to four anonymous European Union diplomats and officials, Hungary requested that

“Gas is flowing to Hungary, where people will be able to heat their homes during the cold winter months, and the Hungarian industry and economy will remain functional.”

Gorbachev was not afforded a state funeral; his legacy and reputation are viewed in quite a different light in Moscow. Russian President Vladimir Putin did not go but attended the coffin in private in the hospital where the last Soviet leader died. Despite the liberation of millions of people from communist oppression, the fall of the Iron Curtain, the reunification of Germany, and greater EU integration, the reforms enacted by the final Soviet premier led to the collapse of the Soviet Union. Putin has described that as a “disaster.” Hungary, however, is now ranked 13th on this year’s Global Peace Index, according to the Institute for Economics and Peace.

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Budapest Business Journal | September 9 – September 22, 2022

News | 5

Regional Investors Still Exercising Some Caution Analysts expect a restrained investment of around EUR 1.1 bln1.2 bln for Hungary this year, given the current uncertain economic and geopolitical climate. Colliers estimates that Central European year-end volumes will reach between EUR 9 and EUR 10 bln for 2022.

By way of comparison, Hungary generated around EUR 1.3 billion in commercial property investment volume for 2021, significantly below the pre-pandemic levels of EUR 1.7 bln-1.8 bln, according to JLL.

Although investment volumes have been rising towards their pre-pandemic levels, investors continue to be wary in the uncertain economic and geopolitical environment.

GARY J. MORRELL

Hungary and the Central European region continue to be seen as attractive investment destinations as CEE offers quality assets, in addition to a strong pipeline of asset-grade products.

Investors are also increasingly concluding deals in the hotel and residential sectors.

Poland has maintained its dominant position among CEE countries, generating 58% of total investment transactions in the first half of 2022, JLL said. According to the consultancy, investment volumes for Poland amounted to EUR 6.4 billion for 2021. It put the investment total for the Czech Republic, Hungary, Poland, Romania and Slovakia last year at EUR 11 bln.

As in recent years, the office sector dominated with 70% of investment activity in Hungary, according to JLL, followed by logistics with 11%.

The consultancy has recorded six significant deals in the Budapest market thus far in 2022. The biggest was the purchase by GTC of the Ericsson and Evosoft headquarters from Wing for a reported EUR 160-170 million. Union Investment purchased

BudaPart Gate the Szervita Square Building from Horizon Development for a reported EUR 70 mln-80 mln, and Property Market is said to have sold BudaPart Gate to S-Immo for a similar amount.

Colliers put the investment volume undertaken by domestic investors at 40% of the CEE total for the first half of 2022, with 20% and 11% conducted by Czech and Hungarian investors, respectively.

ESG Rising

As evidenced by recent CEE commercial office transactions, ESG investing (the integration of environmental, social and governance factors into the acquisition and exit process) is increasingly a concept and code of practice that has been adopted

by investors as a central part of their strategy in both the top end and valueadd sectors of the office market.

“ESG is increasingly higher up the list for investors and developers.

This is partially driven by changing attitudes on responsibility towards the impact of real estate on the environment, but also by increasing requirements on the financing and reporting side of things that will ultimately impact the feasibility of business models going forward,” comments Kevin Turpin, Regional Director of Capital Markets in Central and Eastern Europe for Colliers.

“But we also see sustainability and green ratings moving from a ‘nice to have’ to a ‘must have’ for various players active on the market, in particular from tenants and banks.

This means that investors and developers will need to react and adapt if they want their buildings to continue to be competitive and attractive in the future,” he adds.

“We also see sustainability and green ratings moving from a ‘nice to have’ to a ‘must have’ for various players active on the market, in particular from tenants and banks. This means that investors and developers will need to react and adapt if they want their buildings to continue to be competitive and attractive in the future.”

“The underperformance of the market was mainly due to the significant undersupply of available products for sale (especially in an open-market tender),” the consultancy said.

The total combined investment volume for Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia for 2021 was EUR 11.7 bln, according to Colliers. Poland dominated CEE market investment market activity, attracting EUR 9.4 bln, 58% of the volume. This was followed by the Czech Republic with 17%, Romania at 9%, and Hungary and Slovakia both at 8%, according to Cushman & Wakefield.

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Budapest Business Journal | September 9 – September 22, 2022

Hydro to Close the Loop on Aluminum use in Hungary We are now investing along two pillars: 1) To strengthen our position in low-carbon aluminum and recycling and 2) To grow and diversify in new energy solutions, like renewable energy projects, green hydrogen, and energy storage, like batteries. We are maturing several projects along these lines, alone and with partners, and I am confident they will contribute to both profitability and sustainability for Hydro, our stakeholders and society.

Hydro offers a range of certified aluminum products with a transparent footprint. One of these is Hydro Restore, part of our recycled offering. The new facility in Székesfehérvár will produce Hydro Restore locally. This is a range of aluminum products made from a combination of recycled pre-consumer scrap, recycled post-consumer scrap and primary aluminum. Once the scrap is collected, it will be melted, cast into new billets at the recycling facility, and returned as input material for use in new products.

The new aluminum recycling plant will allow customers to close the loop. In a closed loop, production scrap is collected and sent directly back to the recycling plant from manufacturers. Closed-loop recycling uses and re-uses materials that can be continuously recycled without losing quality and with less energy or resources.

Norway’s Hilde Merete Aasheim, president and CEO of Norsk Hydro ASA, spoke with the Budapest Business Journal ahead of her visit to the groundbreaking ceremony for the new aluminum recycling plant of Hydro Extrusion Hungary Kft. in Székesfehérvár. The EUR 88 million investment will create 80 new jobs.

ROBIN MARSHALL

BBJ: You were vis iting Hungary to mark the start of construction of a new aluminum recycling plant in Székesfehérvár. How significant is this project?

Hilde Merete Aasheim: Recycled aluminum is becoming increasingly important within the extrusion industry.

The new aluminum recycling plant is a significant investment for a greener future and helps boost Hydro’s sustainability strategy. As our customers put more emphasis on greener solutions, this is a breakthrough step in Hungary to grow the market with advanced products and drive sustainability. We are increasing our recycling capacity in Central and Eastern Europe, ensuring reliable billet supply to our customers, and creating possibilities of closing the loop by taking back and recycling production and postconsumer scrap in Hungary.

BBJ: How important is the Hungarian operation to Hydro’s overall business?

HMA: Hydro Extrusion Hungary is Hydro’s largest and most advanced extrusion plant in Europe, with six aluminum presses, several surface treatment technologies, and more than 300 fabrication machines providing jobs for nearly 1,500 employees.

The 60,000-tonne capacity plant mainly grows in the e-mobility segment and serves the premium automotive industry, alongside others.

BBJ: The factory will presumably be state-of-the-art and highly efficient.

Can you talk us through its features?

HMA: The new facility will be equipped with an advanced double chamber melting furnace, which enables the recycling of post-consumer scrap.

This scrap has already lived a life, like a beer can or an aluminum car frame.

Without revealing too many technical details, we can state the concept will be very flexible to assure continuous production of small and large batches of

BBJ: One concern we hear from investors is the challenge of finding suitably qualified labor in a country with near full employment. Is this a worry for you, and how are you working to overcome it?

Hilde Merete Aasheim, president and CEO. Photo by Norsk Hydro ASA. special alloys, mainly for the premium automotive market. The technological setup will enable us to develop and produce new alloys in cooperation with Hydro’s innovation and technology center to strengthen our positioning in the extrusion market.

BBJ: The common perception is that working with aluminum is energy intensive. Is this so? And do you have concerns about your energy costs, both here and across your business, given the war in Ukraine and rising global prices?

HMA: Aluminum and renewable energy play an essential role in an ever more sustainable economy. The EU has deemed aluminum a strategic material supporting the green transition.

However, it matters how and where it is produced. More than 70% of Hydro’s aluminum is made using renewable energy. For over a decade, we have also been investing in new technology to ensure we can incorporate more used aluminum to accelerate the transition to a circular economy. Aluminum recycling requires only 5% of the energy needed to produce the original metal. This is where aluminum stands out.

The war and the sanctions add to the inflation pressure, energy crisis, and supply chain disruptions and lead to tighter markets both in energy and

materials, including aluminum. The fact that we decided to proceed with the project despite the increased energy prices shows that we believe this is the right thing to do, and we stick to our sustainability ambitions.

BBJ: The new plant will recycle aluminum and is, therefore, a vital step in reducing the carbon footprint of your customers.

How green is your business overall?

How are you seeking to improve this?

HMA: Our goal is to help create a fair society and a circular economy by producing responsibly, delivering circular solutions, making net-zero aluminum by 2050 or earlier, and producing and using more renewable energy.

We experience a specific pull in the market for low-carbon aluminum products, on top of the more general decarbonization, electrification, and circularity trends supporting aluminum demand in sectors like automotive, building and construction, consumer durables and renewable energy infrastructure.

It is now more important than ever to maximize the benefit and minimize the footprint of our aluminum and all industrial production. That’s why sustainability is an integrated part of our path to profitability and why our strategy is to pursue opportunities where we have competitive advantages.

HMA: Our company is located in a fast-developing region in Hungary, which gives us several advantages and also some challenges. We are one of the biggest employers in the area.

We are taking many actions internally to improve working conditions and employee engagement continuously. We are proud that more and more people recognize Hydro as a stable employer with good payment and secondary benefits. We stimulate and enable internal development and promotions.

Next to the internal activities, social responsibility plays an essential role at Hydro Hungary. We constantly strive to make a positive difference in the societies we are part of, especially taking an active part in initiatives that can encourage the development of the city that hosts our plant.

We aim to contribute to the development of local communities because we care and because we can only succeed as a company if the society around us also succeeds.

The communities of which our present and future employees are part.

BBJ: Do you have any more pipeline investments for Hungary?

HMA: We believe in continuous improvement. Serving the premium automotive segment triggers the demand for new machines and investments. We expect to announce further investments in the future to keep or improve our market position.

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Budapest Business Journal | September 9 – September 22, 2022

Hungarian British Business Association Leads Trade Delegation to Budapest A London-based business organization founded in January of this year to promote trade between Britain and Hungary will be hosting its first field trip to Budapest from October 5-7.

BBJ STAFF

The Hungarian-British Business Association was created to encourage connections between business leaders in the United Kingdom and Hungary and to support companies and individuals looking to invest, who have an interest in growing their exposure to a new audience, or who are considering this country as a destination to sell their services or build an offshore center.

Describing the business trip as its “flagship event of 2022,” the HBBA says the visit will include a cruise on the River Danube, meetings with senior British and Hungarian business leaders, lots of networking, and a visit to the House of Parliament in Budapest. It is being organized in cooperation with the Embassy of Hungary in London.

“This exclusive trip will take in the cultural highlights of Budapest

whilst creating an environment where Co-founders Susanna Toth delegates can learn about doing business and Alireza Yaghmaei in Hungary. With direct access to ministerial o ffi cials, the itinerary will include a series of in-depth business seminars, including subject matter interested parties to visit Budapest, keynote speakers about developing whether interested in technology important business links between the or any other field of business.”

U.K. and Hungary and Central Europe,” Alireza Yaghmaei, co-founder and according to an HBBA statement. chairman, added: “Budapest is [at] the The association says the event will heart of Central Europe and an ideal be of specific interest to business location for establishing your business leaders in technology, innovation, and making strategic regional connections. startup, business services, corporations, On our trip, we hope to facilitate the investment and private equity. connections between more than O riginally from Budapest, co-founder 100 British and Hungarian businesses. and chairwoman Susanna Toth said, Your network is your net worth.”

“We are seeking to provide direct connections for export-import partners [.…] through promoting [both] Hungary and the U.K. as favorable destinations for companies to invest, set up and establish their businesses. We encourage

News | 7

Flying the Flags The HBBA represents Hungarian, British, and international companies that follow what it calls “British business values.” It works to promote trade and investment flow between the two countries, providing support and promotion for business expansion. Honorary members include the Hungarian ambassador to the United Kingdom, Ferenc Kumin, Paul Fox, the British ambassador to Hungary, Judit Czakó, investment and trade commissioner at the Embassy of Hungary, and honorary chair, author Peter Wilcock.

The HBBA provides its members with opportunities to raise company profiles and strengthen competitiveness in the U.K. and on international markets through various events, publications, and information exchange, such as knowledge transfer for SMEs. HBBA members are helped in finding opportunities for regional partnerships through connections and business services from other, more experienced members and the London Chamber of Commerce and Industry.

To learn more about the HBBA, visit its website hungarianbritishbusinessassociation. co.uk or its LinkedIn page. The deadline for buying tickets for the Budapest trip is September 15. Interested parties should contact info@ hungarianbritishbusinessassociation.co.uk

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Budapest Business Journal | September 9 – September 22, 2022

Wage Expectations, Relying on mum and dad, and the end of Kata After a summer of unprecedented turbulence, Hungarians step into an unpredictable last month of Q3 and on to Q4. Changes in taxes and prices, combined with food, water and fuel scarcity, undermine both business and consumer confidence in the medium term.

BALÁZS BARABÁS

For four months in a row, business and consumer expectations continued to deteriorate in August. Compared to April, business expectations fell by around 13 points, while consumer expectations dropped by nearly 30 points, most sharply in August, according to a study released by GKI Economic Research.

This indicates a growing reluctance of the business sector to employ, which has, in turn, resulted in increasing fear of unemployment in households since April.

In addition, “households perceived their own financial situation to be significantly worse than in the previous month, and their ability to save to have been steadily deteriorating since the all-time record high in February,” GKI noted.

This perception of a fragile financial situation is sustained in other surveys too. Salaries have grown steadily in recent years, but so has inflation, most noticeably this year, which has eroded the raises.

As a result, the period that can be bridged without a wage has not increased, according to the K&H Safe Future survey. The active population of 30-59-year-olds could bridge an average of seven months without income.

However, one-third said they could only cover their expenses for a maximum of one month if they did not get paid, the financial institution said,

GKI Economic Sentiment Index and Elements, 2018-2022

Business confidence index

Consumer confidence index

GKI economic sentiment index

and only 14% have enough reserves for six months. Meanwhile, a quarter of those affected cannot or do not tend to put money aside. This proportion has increased significantly, up from only 18.4% a year earlier.

Army Rises

Some categories, however, fair somewhat better. As of this month, soldiers’ wages will increase by an average of 26%.

As Minister of Defense Kristóf SzalayBobrovniczky announced, a private soldier without a high school diploma previously earned HUF 280,000, which will now increase to HUF 400,000, he said. The salary of private soldiers with a high school diploma will increase from HUF 323,000 to HUF 415,000.

He added the wages of starting lieutenants would increase from HUF 468,000 to HUF 585,000.

Executive salaries have never posed many worries for bridging periods without income, but their increases accelerated recently. Analyzing the remuneration packages of

7,000 executives,

Wyser, a recruitment company specializing in the sector, observed that salaries in Hungary vary between HUF 1.5 million and HUF 3 mln. Regional managers may earn up to HUF 3.4 mln.

With the depreciation of the forint, managers have increasingly been asking for their salaries in euros instead of HUF, while it is also more challenging to provide them with a company car due to long waiting lists.

Companies are expected to be more careful with layoffs, the authors of the analysis said. During the pandemic, it became clear that, despite

the difficulties, it is better to keep employees than to reduce headcount and then hope to rehire workers later. Recent experience shows that the companies that responded to the challenges by hurriedly laying off staff took longer to recover, Wyser added.

Great Expectations

Becoming an executive takes time and experience, but career starters are far from being unsure of their expectations.

Two-thirds of young people starting their careers would like to receive a gross monthly salary of more than HUF 350,000, while just over 30% of those interviewed would be satisfied with a monthly salary of HUF 350,000 or less, according to the results of a survey commissioned by human resources service provider Work Force.

Some 27% of young people would require a salary between HUF 350,000450,000, while the proportion of those who consider a salary of HUF 600,000-800,000 realistic is over 10%. Surprisingly, some (about 2.7% of respondents) expect a HUF 1 mln wage from the start. Only 10% of career starters could not say how much they would like to earn.

As careers progress, things get complicated. Another survey shows that a quarter of young Hungarian adults are not completely financially independent from their parents.

Indeed, more than half of the

18-39 age group

are in this situation, according to their own assessment.

In villages, 60% of young adults consider themselves completely independent from a financial

HR Matters A monthly look at health issues in Hungary and the region

point of view, while in Budapest, this ratio increases to 72%.

While the general perception is that the employees in the IT sector enjoy generous incomes, this has somewhat changed this summer.

Many paid their taxes under the Itemized Tax for Small Businesses (Kata) scheme. As of September 1, the government has significantly altered the system, so much so that many have had to quit using it.

During the pandemic, it became clear that, despite the difficulties, it is better to keep employees than to reduce headcount and then hope to rehire workers later. Recent experience shows that the companies that responded to the challenges by hurriedly laying off staff took longer to recover, Wyser added.

According to the No Fluff Jobs survey, this could severely affect the IT sector. More than 300 Hungarian IT professionals participated: Nearly 20% of them said that, following the termination of Kata, they were planning to leave the country, while another 30% said they were considering moving abroad. Meanwhile, 60% of them plan to continue working as an employee at a local or foreign company.

Those moving abroad look for higher wages, a better quality of life and improved career opportunities.

Young Workers Choose Multinationals Magyar Telekom Nyrt. is the most popular employer among career starters, according to an annual survey from job portal Zytern.com. OTP Bank Nyrt. ranked second, while Robert Bosch Kft. came third. Regarding the type of employer, the vast majority of respondents (59%) want to be employed by a large international company.

Compared to last year, the popularity of startups and the entrepreneurial spirit of young people has decreased, based on the answers provided by 3,000 respondents.

Opening a business doesn’t make you a businessman.

2

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Budapest Business Journal | September 9 – September 22, 2022

Business

His work for Magyar Hang has even divided his family, his brother accusing him of being paid by arch-liberal George Soros to write critical articles.

“I told him he was crazy. We no longer speak to one another,” he says.

Controversial Contributors

Cash-strapped Weekly Battles to Offer Independent Conservative Voice Newspaper publishers in the serious “broadsheet” category would argue it’s never been an easy business, made progressively harder with the advent of the internet, COVID, and now a dramatic rise in operating costs. In Hungary, arguably no paper has had it tougher than Magyar Hang, the Hungarian Voice.

Csaba Lukacs, managing director of Magyar Hang, in the paper’s former editorial offices. It moved premises this summer.

audited circulation figures compiled by the Magyar Terjesztés-ellenőrző Szövetség (Hungarian Distribution Monitoring Association or Matesz).

And as Lukács points out, in the last two months alone, two venerable weeklies, KESTER EDDY Figyelő and 168 Óra have moved from paper to online-only publications. A third, “We like having an economist on the front which he won’t name as yet, is likely to page; it helps sales, impulse buyers, in follow in the near future, he says. these difficult times,” says Csaba Lukács, Moreover, as a quick leaf through managing director of Magyar Hang, as he the 32-page latest edition reveals, hands over the latest edition of his weekly. Magyar Hang’s survival is all the We are in his modest District IX office, more remarkable given its advertising a 120 sqm apartment, in early September, revenues, because there are none. and the front-page photo is of Péter “This year, so far, we have had in total Ákos Bod, Minister of Economy in the less than one page of paid advertising. first democratically elected government We are in September,” Lukács grimaces. of 1990 and later a governor of the central bank. Inside, Bod has a full-page Independent Conservative The reason, he says, lies in the paper’s article entitled, in Hungarian, “Orbán origins (see box) and its editorial Should ask for Forgiveness.” line, which is conservative but fiercely Lukács hopes Bod’s image will lift sales this week towards the 12,000 mark, a level independent from and critical of the Fidesz government. that, reckoning with current operating As a result, although the majority of costs, keeps the publication in the black Magyar Hang’s readership is middle to and alive. Such circulation numbers may seem small for a country of nearly 10 million, but for Lukács and his team of 31 full-time staff, it’s no mean success.

“Today, most newspapers are sold in The Origins of Magyar Hang grocery stores, not at newsstands. But, Magyar Hang’s staff were the chosen when people are shopping, and they see editorial remnants from another conservative the costs of cheese, bread, everything daily, Magyar Nemzet, which experienced a ever higher, they don’t buy a newspaper. turbulent period between 2014-2018.

They consider it a luxury,” he says.

Back then, Magyar Nemzet was owned by Indeed, sales of daily papers in Lajos Simicska, a business-media magnate Hungary have fallen 60% since the onset and long-time economic confidante of of COVID, and the decline is ongoing: Prime Minister Viktor Orbán. As such, the second quarter circulation figures of paper had been the unofficial mouthpiece serious papers and magazines typically of successive Fidesz administrations. slipped around 2% on the previous three However, in 2015 Simicska fell out months. Even HVG, Hungary’s longwith Orbán, and Magyar Nemzet, while standing, high-quality weekly, shifted only 25,000 copies, according to the

upper-middle class (60% of sales are in Budapest, most particularly in the wealthy Buda hills), according to Lukács, many companies “are afraid” to advertise for fear of upsetting relations with the government.

To illustrate his point, he tells the story of a visit to a major automaker, hoping to attract advertising.

“We showed the CEO our readership survey because we have good [knowledge of] what kind of financial capabilities they have. He said that we

fit

100%

into their advertising strategy, but, fearing the loss of state aid for a new plant he was planning, he would not risk advertising.”

Lukács admits that nobody knows “whether they will be punished or not,” but says almost none is “brave enough” to take the risk.

On a personal level, Lukács says he has been the target of libelous slurs, including accusations of being a pedophile by one pro-Fidesz journalist.

He sued and won his case, though he’s still awaiting payment of damages.

maintaining a national-conservative line, became a harsh critic of the government.

But the editorial pivot meant the end of any advertising from government and state-owned companies. Immediately after the third successive Fidesz election victory in 2018, Simicska, unable to sustain the huge costs involved, pulled out of his media empire.

Having burned their bridges with any Fidesz-friendly publications, this left the Magyar Nemzet staff facing unemployment.

In response, fired up in the belief that the country needed a patriotic yet independent

Criticism of the paper’s editorial line is not confined merely to Fidesz supporters, however. Some conservatives reject the paper’s more controversial contributors, notably columnist Róbert Puzsér, because of his coarse language.

Lukács admits Puzsér is “divisive” and is often not to his own taste but says he attracts “a certain kind” of reader.

“Half of our readers send us letters or telephone if we don’t publish him, the other half send letters and make calls if we do.

Sometimes I try to smooth his opinion, but then we have problems with him about that. Unfortunately, among Hungarian columnists, this kind of language has become quite [normal],” he says.

Meanwhile, having mounted a successful subscription campaign to counter a sales dip after April’s election, the paper faces a new challenge in the form of a massive rise in utility costs.

The publishing company counts as a “large business,” and the first of the new gas bills has arrived: it is a fraction under HUF 90,000.

In a bid to offset rising costs, the paper’s shelf price has been hiked from HUF 640

to

HUF 790,

but this risks losing sales, particularly in deprived areas where the equivalent of EUR 2 is a significant sum.

The obvious answer to reducing costs would be to follow the herd and move online, but this goes against the team’s ethos.

“There are many older, rural people who don’t like to read online. It’s definitely important to serve them with the printed paper,” he says.

Can Magyar Hang, devoid of adverts, continue to provide an independent conservative voice in the future?

“I don’t know, to be honest. When we started, it was a [kind of] therapy because we had lost our jobs at Magyar Nemzet.

I didn’t believe that Magyar Hang could survive for four years. That’s a miracle!” he says. “We will continue for as long as it is possible. We are extremely grateful to those 11,000-12,000 people who are still buying our paper. If they disappear, we have no plan B.”

conservative paper, Lukács and some close colleagues determined to found a new publication. Working feverishly, with a shoe-string budget and a slimmed-down workforce of just 30, Magyar Hang was born within a week.

“We couldn’t find a printer brave enough to print the paper in Hungary; we had to go to Slovakia. And we were desperate for cash, so we all went out onto the streets to sell the paper,” Lukács recalls. “Some people called us traitors, others were crying and hugging us. It was a great experience.”

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Budapest Business Journal | September 9 – September 22, 2022

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Business | 11

SAP: Birthdays, Growth and a Welcome Return SAP Hungary managing director Szabolcs Pintér talks to the Budapest Business Journal about the long-awaited return of its annual conference, significant anniversaries, cloud developments and the ticking deadline for the end of Business Suite 7 support.

BBJ STAFF

BBJ: After a two-year, COVIDenforced gap, the annual fall SAP NOW Hungary conference returns on September 11-13. How does it feel to be back?

Szabolcs Pintér: Without boasting, I can say that the annual SAP end-ofsummer conference was an essential event both for the IT and general business sectors in the years before the enforced shutdown. The fact that it is back fills me with excitement and satisfaction. On the one hand, it signifies some return to normality. On the other hand, naturally, it is crucial for us from a business point of view. The fact that we can host our clients, partners and suppliers, and even our competitors’ representatives once a year impacts the speed, volume and quality of cooperation on the other days of the year.

BBJ: This year also marks two significant milestones: the 50th anniversary of SAP and the 25th anniversary of SAP Hungary. How do you plan to celebrate these events?

SzP: We are celebrating both the international and the Hungarian anniversaries throughout the year. For example, we held a family day for our colleagues at Budapest Zoo in mid-July.

In addition, there will be surprises at this year’s SAP NOW conference, and we will recall those key milestones that marked the development of the brand and the business environment. If we just consider how some concepts have shifted into mainstream usage, for example, digitalization, the cloud, data security, and the consumer/user experience, we immediately realize that the world has changed together with SAP. BBJ: Given the anniversaries and the two-year gap, how many people are you expecting at this year’s event?

Will it be more than usual?

SzP: In earlier years, we welcomed approximately 1,000 guests over the three days of the conference, typically consisting of informal networking on the first day and two days of professional

and business culture instantly jumped several rungs up the maturity ladder.

The significance of SAP Hungary is similarly indicated by the fact that the second largest SAP community in the region operates in Hungary with more than 1,500 employees.

BBJ: Digitalization and the cloud are the big trends in the industry today. How will they be presented?

What is the latest news concerning them that non-corporate IT CEOs should be aware of?

SzP: We try to demonstrate with realistic examples, through real-world corporate case studies, what sorts of changes the introduction of cloud computing and state-of-the-art software bring to a company’s operation. We also aim to show how much more freely companies can think in shaping their business strategy. When we talk of “disruption,” the background is that a company can dare to think with an innovative approach and in terms of a new business model thanks to the returns from digital transformation. All SAP-using IT professionals need to be aware that the deadline for official support on our SAP Business Suite 7 package is the end of 2027. The date refers to all applications of the package (ERP 6.0, CRM 7.0, Supply Chain Management 7.0, Supplier Relationship Management 7.0); support will only be available at an additional charge from January 2028 to December 2030. That is why we emphasize on all channels that clients should not leave their migration to the latest S/4HANA system until the last minute. It can be done most effectively Szabolcs Pintér managing director of SAP Hungary using our cloud-based RISE package.

Currently, this position affects several hundred companies in Hungary, for programs. We reckon on roughly the the 21st century, we talked about going whom the launch of the process will same attendance this year because it is green and the drawbacks of globalization. become increasingly pressing given the evident that, besides the “regulars,” an These have now become essential time necessary for the switch and the enormous number of younger managers elements of any professional discourse. capacities available on the market. see in it an opportunity to meet the biggest names in the domestic IT sector BBJ: What have been the major BBJ: What other trends should we in one place and to see presentations that milestones for SAP Hungary over look for in the future, and how is SAP will assist them in their work. the past 25 years? involved with them?

SzP: The first and most important SzP: Today, companies can see, in real BBJ: The Hungarian event has grown was the foundation of a local office. time and with a 360° perspective, all data into the largest SAP program in Multinationals that arrived after 1990 impacting the price, quantity, demand, Central and Eastern Europe. Why do and domestic corporations already ran and inventory of their products and you think that is? What has been the SAP software. The fact that they could services, not only for them but also for secret of its success? now turn to a locally-based affiliate with their suppliers and stakeholders. Over SzP: These days, there are weekly their operational and development needs the past few years, the trend has been conferences featuring inspirational, proved to be an enormous advantage. that enterprises should receive a similarly headset-wearing speakers in the From here, growth was exponential; we solidly-based picture of their consumers’ pattern of TED Talks, but this was far had an ever-expanding client base and behavior to pave the way for better from common 10 or 20 years ago. Back delivered digital solutions for increasing decision-making. Although handling then, the SAP annual events in Tihany, numbers of corporate functionalities. A the satisfaction of customers and the and later Siófok, included lectures, new important milestone was reached consumer experience that precedes roundtable discussions and debates that when the Budapest office received a this, along with the related employee we chewed over for weeks afterward. In commission not only to serve outside experience management, are not new two days, we had 100 speakers, with clients but also to supply SAP in-house, areas, they will remain hot topics for years a professor of economics following on global tasks. That is how development to come. As such, interest in Emarsys, from a top trainer, a mathematiciantasks arrived in Hungary with SAP developed for consumer experience scientist following a minister, a biologist Labs, and later on cloud operations for management, and SuccessFactors, following a bourse president, offering several major software products, such as designed to measure and improve the broad horizons extending far beyond SuccessFactors Cloud Service. These not employee experience, is constantly the fields of business and economics. only raised the profile of the Hungarian increasing. I believe that automation It will be great to experience this once office within SAP but were also a credit and AI will contribute most to the bottom again. Looking back, at the beginning of to the country in that the local workforce line of companies in these areas.

12 | 2

Business

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Budapest Business Journal | September 9 – September 22, 2022

Demographics and the Cost of Capital US Household Savings Rate by age Group

Les Nemethy and Margaux Plassard consider the links between aging populations and the rising cost of capital.

Fraction of Household Disposable income (%)

15 10 5 0 -5 -10

While there are short-term fluctuations in interest rates caused by economic circumstances and central bank policies, long-term structural trends also affect interest rates. This article will look in greater detail at one of the most important of these, namely demographics.

The thesis underpinning this article is that global demographics will likely make the cost of capital more expensive over the coming decades, negatively affecting equity and asset prices. Allow me to walk you through the analysis.

The life cycle theory developed by Nobel laureates Franco Modigliani and Milton Friedman is fundamental to understanding the relationship between demographics and aging. Those in their 20s and 30s borrow to buy and furnish a home, bring children into the world, and so on. From

-15

25-34 35-44 45-54 55-64 >65 Age of the Head of the Household

Of course, the trends discussed above will be favorable for savers. Bonds are likely to carry higher yields. In fact, baby boomers become more risk averse as they approach and pass retirement and are likely to shift their portfolio from stocks to bonds. This will act as a headwind on equity valuations and potentially boost the value of bonds (partially offsetting higher yields caused by reduced availability of savings and capital).

What are trends that could dampen the increasing cost of capital? First, technological innovation tends to improve productivity and hence income and savings rates. Economies may be able to produce more with less labor, generating greater earnings and savings.

Note: average for the period 2013-2017.

Source: CaixaBank Research, based on data from the Bureau of Labor Statistics.

The baby boomers are the demographic equivalent of a pig working its way through a python.

Fantastically Productive

their

40s

<25

The Corporate Finance Column

until retirement, they save to pay off earlier borrowings and fund retirement.

Upon retirement, they abruptly switch from saving and begin liquidating assets to fund their retirement.

The life cycle curve is seen in the chart.

The shape of this curve can be explained by the desire to maintain a stable quality of life over time.

So, the two main demographic trends hitting us today are a) couples giving birth to fewer children; and b) a demographic cliff, where the baby boomer generation suddenly retires.

Post-World War II, new family formation and births reached an unprecedented peak. During the past few decades, this age cohort became fantastically productive and saved vast amounts of money. Over the course of the next very few years, they are about to retire.

From a savings point of view, this is like throwing a switch. People who have been saving like crazy to squirrel away as many nuts as possible for their retirement will, from one day to the next, begin using up those savings.

Given the sheer number of people retiring in the next few years, this will likely create big waves in savings and hence the supply of capital.

This is a global trend. It is even stronger in China, for example, than in the United States, first because more people are going into retirement, both in absolute terms and relative to population size, but also because the Chinese have been much bigger savers than Americans or Europeans, because of the One Child Policy and lack of social security safety

net in China. Economists have talked of a “savings glut” in China, which may quickly swing to the opposite extreme.

A number of economists believe that this demographic tailwind over the past few decades has contributed to a

roughly

1.5-2%

lower interest rate than otherwise would have prevailed. This may soon disappear; indeed, the pendulum may swing the other way.

If you accept that the tailwind shifts to a headwind, and we are facing higher interest rates and cost of capital over the coming decades, how does this affect share and asset prices? The pricing of any asset is based on the risk-free cost of money and the risk premium associated with the asset in question.

Risk Premium

Because of reduced savings (e.g., reduced supply of capital), the risk-free cost of capital increases. And because much of those savings are still held by retirees, a higher risk premium may be required to fund riskier investments. So, the pricing of all assets is likely to be affected, but riskier assets more so.

The baby boomers are the demographic equivalent of a pig working its way through a python.

Second, should increasing life spans and health spans push back the retirement age, we might see a diminution of the effects talked about in this article.

So far, due to COVID-19, the trend seems to have been towards early retirement.

If the pandemic were to become a distant memory, this could theoretically change. However, it is unlikely that either of these trends will outweigh the increased cost of capital. On balance, it is likelier that cost of capital will increase, creating a headwind of share and asset prices over the coming decades.

Les Nemethy is CEO of EuroPhoenix Financial Advisers Ltd. (www.europhoenix.com), a Central European corporate finance firm.

He is a former World Banker, author of Business Exit Planning (www. businessexitplanningbook.com), and a previous president of the American Chamber of Commerce in Hungary.

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EdTech app Redmenta Receives EUR 140,000 Angel Investment Hungarian educational technology app Redmenta has received a EUR 140,000 investment from angel investors. Redmenta is looking to use the cash injection to scale domestic sales and get a foothold in the international market.

BENCE GAÁL

“It’s a good base for us that we already have 250,000 monthly active users on our system, and it’s not only popular in public education but also supports the training of employees in many places, from small businesses to the country’s largest employers to government,” says Zoltán Visy, co-founder and CEO of Redmenta.

“Our users are mainly from Hungary, but, so far, we’ve grown organically beyond our neighbors in Germany, France, and many other places from South America to Asia.

We would like to accelerate this growth with this investment,” he explains.

“The only way to prepare today’s young people for the challenges of the future is to teach them to solve problems, think analytically, choose strategies, and develop their creativity and communication skills,” says Visy.

“The Redmenta worksheets are a great Co-founders Zoltán Visy (left, way for teachers to do all this without CEO) and Bálint Mérő (CTO) deviating from the expected curriculum.

When evaluating the worksheets, we pay a lot of attention to the coaching approach Redmenta, an online worksheet to feedback, as this is the best way to app, was launched by two high develop the learner,” the CEO adds. school students, an educator who Big Name Investors decided to change career paths and The lead investor in the equity a communications professional back in investment is Péter Csillag, who recently sold his own company, Starschema, and became the president of the Hungarian Initially, the teachers used Redmenta Business Angel Association (HunBAN). mainly for accountability and practice. With He was joined by András Fülöp, the the arrival of the COVID shutdowns, the former Hungarian head of consultancy focus on digital learning tools in Hungary Deloitte; Szabolcs Szakacsits, founder grew. This momentum led the team to and CTO of Tuxera; Máté Wohlmuth, introduce new developments to create CEO of Coding Sans; and Iván Gyurácz unique, higher cognitive skill-building Németh, partner at Absolvo Consulting. solutions for education in Hungary.

“This is my first investment in The project’s success is demonstrated educational technology, and I’m by the fact that last year it won first happy to invest in such a strong team place in the Vodafone Digital Awards. with such a strong market presence,

2013.

Business | 13

S TA R T U P SPOTLIGH T

a product validated by many users.

We are confident that the capital, support, and mentoring provided

by HunBAN members will be used effectively, achieving significant market success both at home and abroad,” Csillag says of his investment.

Bálint Mérő, co-founder and CTO of Redmenta, notes that “for the first time in Hungary, we used an internationally proven platform that makes syndicated investments (when several investors inject capital into the same company at the same time) significantly faster, cheaper, and simpler.”

The investment coincides with the arrival of Redmenta’s upgrades which aim to meet the needs of professional institutional and corporate environments, providing a system for new partners.

The company’s application is well suited for adult education or corporate in-house courses, from fire and safety programs to training contact center staff or keeping colleagues up to date.

Analysts predict the educational technology market will expand at a staggering rate over the next few years, with an 18% growth rate between 2022 and 2026, or USD 133.05 billion globally.

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Transformation of Kata may Result in Major Labor Market Restructuring KÁROLY RADNAI

The amendments to the old flat rate tax of small entrepreneurs (Kata) announced in the middle of the summer affect nearly 450,000 small taxpayers. According to a statement from the National Tax and Customs Authority, by the middle of August, almost one percent of the current Kata taxpayers had indicated they wanted to remain in the reformed Kata regime, which will be operating according to the new rules. Since the deadline for filling out and submitting the form required for this declaration is September 25, this will most likely increase, but it is not expected to exceed 10%.

Life after Kata

Based on the current legislation, those who can no longer opt for this form of taxation will not find an equally beneficial alternative. Because of the extra amount of tax payable and the additional administrative burdens compared to their current obligations, they can only choose from among less poor options. These small taxpayers cannot expect new options, significant tax relief, or substantive changes in the relevant tax legislation in the short term.

The last significant modification took place on August 10, when the Hungarian government amended several tax acts in the form of government decrees. One of

the relevant changes is the elimination of the 13% Ekho (simplified contribution to public revenues) burden of disbursers as of September 1, which will significantly decrease the effective tax rate under the scheme. In the professions affected by this amendment, primarily in the creative and cultural industries, among others the film industry, it will be worthwhile to choose Ekho instead of the new Kata, especially since the disbursers must handle the Károly Radnai administrative burdens. However, due to the restrictions on professions that can choose taxation by Ekho, this option Back to the Labor Market will only be a solution for a few tens of There is a danger that the radical changes in thousands of small taxpayers. the tax legislation will lead many to the grey As an alternative to Kata, flat-rate personal income taxation will be the most or black economy. However, the proportion popular option. According to the Ministry of those current Kata payers who give up their entrepreneurial status and establish of Finance, one of its advantages is that re-registered employment will probably its administration is a breeze since those be even higher. Partly because the more who choose this regime only have to keep records of income and do not have to deal complicated tax administration would be too much of a burden for them and partly with expense invoices. However, the picture is complicated by the fact that one has to because they simply will have no other choice. This could result in a significant declare personal income tax and social restructuring of the labor market, the security contributions separately; thus, extent of which will first be revealed by especially with the latter, the majority of taxpayers will need the help of an accountant. the October statistics.

The general entrepreneurial personal Winners? income tax regime is another alternative, but the administrative burden here is even In recent years, it has been observed in several professions that traditional more significant since, with this option, employee schemes have competed with one has to collect the expense invoices.

Kata. Examples include the advertising profession or the IT sector, where new market participants could secure a considerable price advantage over companies that worked with registered employees by recruiting skilled freelancers who chose the freedom Kata offered over full-time salaried positions.

Here, the new rules will have a marketcleansing effect, as a result of which a healthier public burden structure may emerge in the affected areas. Companies that persisted in employing registered workers will benefit from the change.

Those leaving the Kata system may offer an extra workforce at these companies.

Losers?

In the case of those industries where it was a common practice to employ Kata taxpayers, the changes will have a serious cost-increasing effect.

One such is the film industry, where production costs can be expected to rise, reducing the sector’s international competitiveness (probably the Ministry of Finance recognized this and therefore simplified the Ekho rules).

The previously mentioned IT companies that have involved contractors on a project basis thus far may also fare badly. Some companies operating in specific segments of the sector will not be able to cover the increased cost of employing IT professionals, so there is a risk that professionals thus affected will accept well-paying foreign assignments instead. In the case of many of them, it is questionable whether they will stay in Hungary at all.

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Biodiversa+, the European Biodiversity Partnership, a network of ministries and agencies across Europe that support research, has introduced two reports, “Sustainable Use of Wildlife” and “Diverse Conceptualization of the Multiple Values of Nature and its Benefits,” that were presented for approval at the ninth plenary session of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) on July 3-9.

RENÁTA KÓNYA

Image by Chinnapong / Shutterstock.com

Reports Highlight Sustainable use of Biodiversity, ‘Nature Values’ Preservation

contribute to maintaining healthy fish stocks, a crucial element for the health of our oceans and biodiversity.

“What Buffer showed, analyzing over

100 MPAs

worldwide, is that different levels of protection have very different levels of effectiveness, especially depending on where they are placed from fully protected areas,” explained Lemaître.

The study found that 95% of protected areas in the Mediterranean do not have efficient regulations, for example.

Out of the 6% of the Mediterranean Sea covered by MPAs, only 0.23% is ecologically efficient. Lemaître argued that this demonstrates how research and innovation can promote effective policy implementation.

Biodiversa+ was launched in 2021 (see box for more details) and has five main objectives. These include promoting and supporting new Future Forests research on topics that can lead to GreenFutureForest, another groundbreaking science and improving “Sustainable Use” project, illustrates the monitoring of biodiversity and ecosystem services across Europe. It also scenarios for a sustainable “future forest” infrastructure and produced aims to expand the evidence base for simulations for land use, forestry, and developing and deploying nature-based conservation, from global to local solutions, promoting efficient sciencescales. The work can guide forestry and policy interfacing, and engaging with the IPBES to promote the international dimension of the partnership are essential elements of the project.

Biodiversa+ is a European Union Frédéric Lemaître, whose role is co-funded partnership with national described as a senior officer for the and local members, established science-policy-society interface, in the context of Horizon Europe, introduced two new IPBES assessments a science framework program of and projects within them that illustrate the European Commission. The how they might work. partnership targets a total budget The Buffer project, for example, of more than EUR 800 million by falls under the “Sustainable Use” combining individual contributions assessment and is a concrete example from partners with investment of Biodiversa+’s contribution to by the European Commission. increasing socio-ecological resilience.

Building on the 15-year legacy The project looks at the ecological of its predecessor Biodiversa, and socio-economical effectiveness of marine protected areas (MPAs), which

conservation strategies to secure wood production activities and improve the viability of forest species, as the former is a critical component of the transition from a fossil- to a bio-based economy.

The “Multiple Values of Nature” assessment focuses on how people’s values can be measured and used to support decision-making. The Connect project looked at how so-called “wild food,” in other words, food sourced from hunting or gathering (mushrooms, wild fruits, and plants), is valued across the EU and provided an overview of where and why people consume it.

After mapping the supply and demand of what they call “ecosystem services,” the researchers found that hunter-gathering activities have a strong cultural value for people in regions where it forms part of the traditions and cuisine.

The project has highlighted new methods for quantifying the value of ecosystem services in five case studies across Europe in collaboration with the public.

“Connect helped put this overlooked ecosystem service on the radar of EU policy,” said Tord Snäll, a professor at

Biodiversa+ comprises research and environmental policy actors from 36 European states and associated countries, including Brazil, Morocco, and Taiwan.

Hungary’s funding partner in the Biodiversa+ partnership is the National Research, Development and Innovation Office, making it possible for Hungarian organizations to apply for any joint transnational calls announced. The advisory board of Biodiversa+ is presided

2

Business | 15

the Swedish University of Agricultural Sciences. “They concretely highlighted where there are mismatches between wild food provision and demand with their maps, which has been taken up in the IPBES assessment on Europe and Central Asia.”

Just Transition

Another example lies with urbanization, with several groups of people with different uses and values of nature. Professor Dagmar Haase of the Humboldt University of Berlin highlighted how research and innovation are advancing governance of nature in cities for a just transition to sustainability. As urban spaces have increased, covering 5-8% of the globe’s surface, biodiversity value grows.

This project has advanced local authorities’ management of urban and peri-urban nature by showing the uses and values of the services rendered, the scales of governance required to enable ecological efficiency, and the linking of different cities around their biodiversity management practices and experiences.

Haase presented four examples of why city authorities need to plan for developing green and blue spaces sustainably and equitably. Trees, for instance, are creators of co-benefits by housing the maximum biodiversity of other species like birds, pollinators, and other insects. They are also significant due to their heat limitation, air freshening, and local water-saving functions in climate change mitigation, so planting diverse trees along our streets is one of the most effective cleansing measures in urban areas.

Secondly, studies found gardens to be multi-functional in environmental and social terms. While they produce local food that contributes

to

5-10%

of the vegetable supply for the surrounding population, plants, like trees, host biodiversity. In addition, gardens decrease the building pressure of big cities and create social spaces for people.

Brownfields, another host for biodiversity, were discovered as places where wild and diverse trees, shrubs, and vascular plant communities grow without human intervention. As Haase highlighted in a final remark, nature has human cultural functions, so equity is needed to make these benefits accessible for everyone, especially the most vulnerable.

by Hungarian ecologist András Báldi, bringing Hungary’s role and engagement in the partnership to another level.

The Intergovernmental SciencePolicy Platform on Biodiversity and Ecosystem Services is described as an “independent intergovernmental body that is open to all member countries of the United Nations.”

The IPBES HQ was officially opened in the UN Campus in Bonn, Germany, in July 2014.

3

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

Special Report IT, System Integration

Challenges Await in Booming IT Integrators’ Market The pandemic gave a much-needed push for businesses toward digital transformation, which has lifted the profile of IT integrators and digital service providers. While the growth potential is immense, the market is facing internal and external challenges. The Budapest Business Journal takes an overview of the industry with T-Systems Hungary.

CHRISTIAN KESZTHELYI

Elevated digitalization requirements sparked by the pandemic have accelerated the transformation of information technology system integration, which points toward trends shifting to a service-based operating model in Hungary.

Two main factors fuel this progress.

Firstly, prominent IT vendors on the market’s supply side are switching to service-based operations and business models. Secondly, customers are tailoring their processes toward using services rather than significant one-off investments, which supports them in running more flexible, adaptive and, thus, resilient operations. Such a burgeoning market is, however, challenge-ridden.

“As a result of the increasingly difficult availability of IT professionals, most customers are looking for strategic partnerships with some service providers, even starting open innovation collaboration with them,” József Sándor Kerekes, technology presales and consulting division director of digital service provider T-Systems Hungary tells the BBJ. Companies are also increasing their focus on the data economy. Data management and related artificial intelligence solutions are gaining momentum, especially for companies that produce and gather, and not just consume, data. This is encouraging a change in the market.

“Thus, also at T-Systems, we are talking about shifting towards offering convergent digital services on top of traditional systems integration functions,” says Gábor Vasvári, a strategic expert at T-Systems Hungary, which operates under the umbrella of local telco player Magyar Telekom, a daughter company of German giant Deutsche Telekom.

Such an industry houses competition that grows stronger as more complex service providers come to life via local mergers and acquisitions. Beyond such large-scale one-stop-shop businesses, smaller companies still exist in the market, offering services in a maximum of one or two areas, with highlyspecialized expertise.

“However, the main threat comes not from the local and regional IT service providers but from global tech, especially cloud companies, which, if they focus more intensely on the domestic market, can offer a serious competitive edge with their cheaper prices,” Vasvári warns.

Changing Needs

How are business needs changing in a vertical of such plasticity? On the one hand, “Flexible, calculable operation will become increasingly important for customers, based on which they will always pay only for the services used.

Furthermore, fast implementation and integrability will also become increasingly important aspects. The above demand represents one of the most significant advantages of the cloud model,” Vasvári adds.

On the other hand, customers still expect customized solutions nowadays, in addition to quality and legal guarantees of the given IT service provider concerning operation, which is the strength of traditional on-premise services.

The holy grail for combining these two business models is the availability of an IT/hybrid cloud solution, which combines the speed and flexibility of the cloud with the integrability and quality guarantees of on-premise solutions.

“T-Systems also prioritizes hybrid cloud and hybrid IT operations and can provide many services to its customers in this way,” Vasvári insists.

size of the country, the Czech Republic is the largest market, about twice the size of Hungary’s. Moreover, the Czech market is more mature in digitalization; businesses were able to make the compromise decisions along which they could better apply cloud technology,” Vasvári notes.

The Hungarian IT market is similar to Poland’s, as companies in both countries are more conservative about adopting new solutions than in the Czech Republic. A common trend in the V4 is that project-based services are growing more than managed services, and their market growth rate is similar in magnitude.

“Yet, this growth rate falls behind the cloud market in every V4 country.

In terms of future market growth, the Gábor Vasvári, strategic expert. public cloud will expand much more in the V4 (annual growth of Hungary is a mixed bag in digitalization when compared to its neighbors. According to the most recent digital economy and society index (DESI) produced by the European Commission, Hungary scores

43.8 points

out of 100. This puts it head-tohead with Slovakia, behind the Czech Republic but ahead of Poland, from among its Visegrád Four peers.

Hungary excels, both within the V4 and against the European Union average, in connectivity; in other words, the availability and price of fixed and mobile broadband. However, considering the digital technologies integration indicator, Hungary comes last among the V4 and is 25th in terms of the EU average (in a 27-strong club).

“This shows that the IT sector has plenty to do to increase the growth and usage of these technologies,” Vasvári says.

The ICT Spending guide by IDC, a global market intelligence firm, shows that 48% of the Western European IT services market already belongs to managed services. In the meantime, project-based solutions still dominate in Central and Eastern Europe, including the V4, as they have a 54% share of the IT service pie in the region, against only 39% in Western Europe.

More Adaptive

“Compared to Western countries, there is no significant difference between the V4 countries, but overall, the Czech IT market is more adaptive; they adopt new technologies much faster than Hungary or Poland. Compared to the

around

20%

is expected in the coming years) than the market for on-premise solutions, where we typically speak of an annual growth rate of less than 10%. And, of course, it is also important to note that the cloud market in all V4 countries is still far from saturation,” Vasvári adds.

The market is undoubtedly bursting with potential. The pandemic accelerated digitalization; many companies realized that digital solutions allow them to maintain business continuity and remain competitive.

“If we approach from this angle, the pandemic has even been beneficial for the spread of digital services, and it is enough to think about remote work opportunities, among others. But secure VPN [virtual private network, which helps users stay private online] solutions have also grown in importance,” Vasvári adds.

The indirect effects of the war in Ukraine, which appear across the entire economy in Hungary and globally, curb the growth possibilities of the IT market, too. Sputtering supply chains, increasing inflation, and rising energy prices harm all economic actors, who may have fewer resources for IT investment.

“However, it is also important to highlight that, with a prudent IT solution, internal business processes can be made more efficient, and energy efficiency can even be enhanced with an IoT solution, which offers opportunities for IT integrators,” Vasvári concludes.

Editor’s note: Other service providers were offered to chance to contribute to this article but had not done so by our deadline.

3

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

even further in the coming years. In the short term, employing retired teachers in schools could be a solution, believes Péter Listed IT company 4iG and state-owned Horváth, president of the National Faculty Corvinus have entered into non-binding of Pedagogy, who spoke about the current heads of terms with Vodafone Group to problems on Inforádio. This year, teachers acquire 100% of the telco’s Hungarian unit retiring or who have already retired no for a cash consideration equivalent to an longer have to give up their pension if they enterprise value of HUF 715 billion, 4iG take up work as civil servants in a stateannounced on the website of the Budapest run institution. According to him, this is a Stock Exchange on August 23. The “very correct decision,” but it is not a longtransaction would give 4iG 51% of Vodafone term solution to the problem.

Hungary and the state, through Corvinus, a 49% stake. The deal is expected to close 4iG Books HUF 1.6 bln by the end of this year, subject to due H1 Profit diligence, the finalization of the binding In the first six months of the year, 4iG, one contract, and regulatory approval. of the leading companies in the Hungarian “The combination of 4iG and Vodafone IT and ICT market, achieved a pre-tax is a significant step towards building a profit of HUF 1.6 billion and a sales revenue Hungarian-owned national champion of HUF 121.85 bln. Both are more than in the ICT sector,” 4iG said. The three times that of the previous year, the deal “creates significant potential for company announced on the website of the further growth through cross-selling Budapest Stock Exchange on August 31. opportunities, full fixed-to-mobile The report said that the growth was helped convergence and scale, resulting in by the acquisitions carried out in recent major B2B and B2C revenue synergies,” months; 73% of the turnover came from the while the potential of infrastructure consolidation “creates sizeable long-term activities of telecommunications companies. shareholder value from in-market cost and CapEx saving synergies,” it added.

4iG, State Acquiring Vodafone Hungary

Delta Systems Wins Almost HUF 900 mln in Contracts

Listed IT company Delta Technologies said on August 30 that its unit Delta Systems had won a contract worth a net HUF 143.6 million in a public procurement procedure called by the state-owned lottery company Szerencsejáték to deliver homogeneous servers and storage equipment, according to an announcement on the website of the Budapest Stock Exchange. The procedure for the project was called under a framework agreement signed earlier. As consortium leader, Delta Systems will book the entire contract value as revenue, Delta Technologies said. It noted that the framework agreements do not automatically guarantee orders. The state institutions serviced by the Digital Government Agency call their own tenders for the suppliers included in the framework agreement. Earlier, on August 24, Delta said another consortium led by Delta Systems had won a contract worth net HUF 755 mln for deliveries to government IT development agency KIFU.

Vodafone Hungary is Hungary’s second-biggest telco with net revenue of HUF 278 bln in its 2021-22 business year and adjusted EBITDA of more than HUF 93 bln. The headcount at the unit stands at more than 3,000. The combined group created by the transaction would have revenue-generating units of HUF 7.6 million as of 2022.

Speaking a day after the news broke, head of the Prime Minister’s Office Gergely Gulyás said: ‘The opportunity would not have arisen a year and a half later, or the chances of it arising would have been slim.” According to state news agency MTI, IT Professionals Mull Leaving Gulyás added that the deal fits well with the government’s economic activities as it Hungary After Kata Change The termination of the Itemized Tax boosts domestic ownership in a strategic for Small Businesses (Kata) could have sector and gives the state a stake in a severe effects in the IT sector, according company that “can stand on its own feet.” to the No Fluff Jobs survey, writes profitline.hu. The No Fluff job portal, Science, IT Teachers which specializes in the IT sector, asked Especially Lacking more than 300 IT professionals working There is a lack of teachers, especially in in Hungary how they are reacting to natural sciences and IT, writes hrportal.hu. the termination of Kata. Nearly 20% It is a growing problem that the number of participants in the survey said they of those graduating from teacher training are planning to leave the country, and cannot replace the number retiring. This another 30% are considering doing so. year, seven people were admitted to ELTE While every second IT professional for mathematics and physics, and four in asked is thinking about leaving the Szeged (170 km southeast of Budapest). country, only 7% see the solution in These numbers are likely to decrease establishing their own company abroad.

INSIDE VIEW

Hays Market Research Explores if Tech Market Slows Down by 2023 Balázs Simon

Team leader, Technology division HAYS HUNGARY

Amidst a changing economic climate, employers across industries are revising business strategies and hiring plans for next year. Many forecast a slowing recruitment pace, hiring freezes in specific sectors, and an intensifying competition for talent.

half of our clients did so, and we expect yet another wave of increases at the beginning of next year when even more employers might follow this trend,” Simon says.

Most IT contractors want payment in euros or another stable currency.

According to the Hungarian labor law, permanent workers can only receive their salary in forints; however, more employers are willing to adjust wages to the EUR-HUF exchange rate.

Most Wanted Skills

“You can search almost any programming language on the internet, and you’ll find an infinite number of open positions in the results,” Simon explains. “As for nondevelopment roles, experts in data science, cybersecurity, SAP, and cloud technology are most needed. In the future, I believe Python and Salesforce knowledge will be the new stars in technology, which are very much present in western countries, and we expect it to be dominant soon in Hungary as well,” he adds.

However, the technology market Senior technology professionals can doesn’t seem ready to place plans reach a salary of millions of forints in most on hold. Balázs Simon, team leader IT specialisms today. The hottest positions of the technology division at leading are in programming, development, data recruitment agency Hays Hungary, and advanced analytics, cloud technology, shares insights from its latest market and cybersecurity, but experts in ERP and study on the industry and the challenges CRM systems also earn high salaries. employers face today and in 2023.

In the past year, the technology industry Hays Forecast In the upcoming months, we’ll see has shown massive growth. With many whether an economic recession actually companies opening new offices and new happens. Hays expects employers will still positions in Hungary, the recruitment face the challenge of increasing salary boom continued at full speed. Although requirements due to inflation and the the outbreak of the war in Ukraine skills shortage. This will be particularly impacted some, most technology true in the technology industry in businesses in Hungary closed a strong Hungary in 2023. The consequences of year with high revenue and a larger staff. the rising interest rates in the US and According to the market research that the war might also bring surprises for Hays conducted in August 2022, business businesses, but most already have a “plan expansion plans set out in January did B” for such situations. not change considerably during the “We’ve seen an amazing year with high year, despite the war and the changing volume recruitment projects. Within a year, economic environment. our team doubled in size while our revenue “At Hays, we experienced an incredible tripled. We enjoy being the trusted and growth in the number of newly opened strategic partner of an even broader range positions in our clients’ organizations this of companies,” Simon notes. year,” says Balázs Simon, team leader of “Our Recruitment Process Outsourcing technology recruitment at Hays Hungary. service is getting increasingly popular.

“There are a few conservative market This year we closed nine successful RPO players that somewhat decreased their projects for technology partners, and hiring pace, but most of our clients are many are still running,” he says. looking to recruit more talent with an “According to our latest market research, optimistic outlook on the future. Now, our clients are not planning layoffs; at every company is closely observing the most, a slower recruitment pace and macroeconomic changes and the dynamics of the technology sector, to be ready in case more considerate hiring steps. Besides, employers are putting more focus on they need to adjust their plans,” he adds. retention. More conservative companies Tech Talent Value will also expand over time, while those in a Today, the biggest challenge for companies more advantageous position can leverage is calculating competitive salary ranges. from the slow down.”

Salary requirements of candidates often grow higher during the selection process, which is a good indicator of how rapidly salaries are changing nowadays in the technology industry.

“Many companies increased their salaries during the year to match rising inflation. www.hays.hu According to our latest research, more than

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

News in Brief Information Technology

Special Report | 17

18 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

Systems Integrators Ranked by total net revenue in 2021 type oF SyStem IntegRatIon

eRp

SoFtWaRe development

It SeCuRIty

ConSultIng

mIxed

HaRdWaRe

SoFtWaRe

mIxed

novell

WIndoWS SeRveR

unIx

4Ig nyRt. www.4ig.hu

93,000

✓

✓

✓

✓

✓

✓

A

✓

✓

✓

✓

✓

✓

2

t-SyStemS magyaRoRSzág zRt. www.t-systems.hu

86,575

✓

✓

✓

✓

✓

✓

A

✓

✓

✓

–

✓

✓

3

S&t ConSultIng HungaRy kFt. www.snt.hu

31,500

✓

✓

✓

✓

✓

✓

A

–

–

✓

A

A

4

InvIteCH ICt SeRvICeS kFt. www.invitech.hu

28,748

–

–

–

✓

✓

✓

A

✓

✓

✓

–

5

dxC teCHnology magyaRoRSzág kFt. www.hp.hu

24,920

A

A

A

A

A

A

A

A

A

A

6

Ibm magyaRoRSzágI kFt. www.ibm.com/hu

18,115

–

–

–

–

–

✓

A

–

–

✓

7

InteR-ComputeRInFoRmatIka zRt. www.intercomputer.hu

12,904

✓

✓

✓

✓

✓

✓

A

✓

✓

✓

–

✓

✓

8

euRo one SzámítáSteCHnIkaI zRt. www.euroone.hu

9,440

–

–

✓

✓

✓

–

A

✓

✓

✓

✓

✓

9

nádoR RendSzeRHáz kFt. www.nador.hu

8,596

–

–

✓

✓

✓

✓

A

✓

✓

✓

–

✓

delta 10 InFoRmatIka zRt. www.delta.hu

aCCentuRe 11 tanáCSadó kFt. www.accenture.hu

6,077

5,932

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

5,036

–

QualySoFt 13 InFoRmatIkaI zRt. www.qualysoft.com

4,968

–

✓

✓

✓

✓

teCHWave 14 HungaRy zRt. www.techwave.hu

3,752

✓

✓

✓

✓

1,394

–

–

–

✓

15

kÜRt InFoRmáCIóbIztonSágI éS adatmentő zRt. www.kurt.hu

ntt data buSIneSS 16 SolutIonS kFt. https://hello.global.ntt

17

Conet kFt. www.conet.hu

–

top loCal exeCutIve CFo maRketIng dIReCtoR

addReSS pHone emaIl

✓

✓

(71.72) (28.28)

péter Fekete Csaba Thurzó Imre Markót

1037 Budapest, Montevideo utca 8.

(1) 270-7600 info@4ig.hu

✓

✓

Magyar Telekom Nyrt. (100) –

gábor gonda Ádám Balázs Schuszter –

1097 Budapest, Könyves Kálmán körút 36.

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

A

✓

✓

– S&T AG (100)

péter Szabó Sándor Kulcsár Tímea Soós

2040 Budaörs, Puskás Tivadar út 14.

(1) 371-8000 info@snt.hu

✓

–

A

A

Antenna Hungária Zrt. (100) –

Csaba bőthe Dániel Majbu Orsolya Hladics

2040 Budaörs, Edison utca 4.

(80) 820-082 kapcsolat@invitech.hu

A

A

A

A

A

– DXC Hague B.V. (A), DXC Hague II B.V. (A)

zoltán Czibók – –

1114 Budapest, Bartók Béla út 43–47.

(1) 279-8000 cegugyek@hp.com

–

✓

✓

A

A

– IBM Products Holdings B.V. (100)

gyula péter Rehus – –

1117 Budapest, Neumann János utca 1.

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

✓

✓

Inter-ComputerHolding Kft. (100) –

miklós Fábri, zsolt koszti János Bence Bajzáth –

1118 Budapest, Gombocz Z. utca 12.

(1) 411-3720 info@intercomputer.hu

✓

✓

✓

Bravogroup Holding Kft. (100) –

árpád kucska – –

1145 Budapest, Újvilág utca 50–52.

(1) 358-6350 info@euroone.hu

✓

✓

✓

Individuals (100) –

tibor gombos – –

1152 Budapest, Telek utca 7–9.

(1) 470-5000 info@nador.hu

✓

Deltagroup Holding Zrt. (100) –

István antal – –

1134 Budapest, Róbert Károly körút 70–74.

(1) 437-5200 info@delta.hu

A

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

tomas volek – –

1138 Budapest, Bence utca 1.

(1) 327-3700 Info_Budapest@ accenture.com

A

Individuals (15), Starpool Holding Hungary Kft. (85) –

péter pál Fried János Kóti –

1183 Budapest, Gyömrői út 99.

(1) 666-1600 info@ dunaelektronika.com

milán Hasznics Henrietta Mencser Katalin Korcsok

1118 Budapest, Rétköz utca 5.

(1) 889-9800 office@qualysoft.com

majoR ClIentS In 2021

duna elektRonIka kFt. 12 www.dunaelektronika.com

–

oWneRSHIp (%) HungaRIan nonHungaRIan SoFtWaRe

Sap SeRvICeS

1

✓

✓

–

A

A

✓

A

A

✓

A

–

A

✓

✓

–

A

–

✓

–

–

✓

A

✓

✓

✓

✓

A

A

A

A

A

✓

✓

✓

✓

✓

✓

✓

IntegRatIon oF oWn pRoduCtS

HaRdWaRe

Company WebSIte

total net Revenue In 2021 (HuF mln)

opeRatIng SyStem oF SeRvICeS

Rank

SeRvICeS

✓

A

✓

A

✓

A

–

A

✓

✓

–

✓

Individuals (3) Qualysoft Holding Ltd. (97)

–

✓

–

✓

✓

– Techwave Consulting Inc. (100)

péter Fárizs – –

1138 Budapest, Dunavirág utca 2–6.

(1) 237-1730 info@techwave.hu

A

A

A

A

A

Individuals (100) –

józsef béla kmetty – –

1118 Budapest, Rétköz utca 5.

(1) 424-6666 kurt@kurt.hu

zsuzsanna Szakács Földháziné – –

1117 Budapest, Neumann János utca 1.

(1) 482-9500 info-solutions-hu@ nttdata.com

endre nagy, endréné nagy – –

1147 Budapest, Fűrész utca 115.

(1) 467-2060 conet@conet.hu

✓

714

–

–

✓

✓

✓

✓

A

✓

✓

✓

✓

✓

✓

–

✓

– NTT DATA Business Solutions International Holding GmbH (100)

376

–

✓

–

✓

✓

–

A

A

A

A

–

✓

✓

A

A

Endre Nagy (50), Endréné Nagy (50) –

3

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

Special Report | 19

Software Developers

inStallation

ConSulting

ReSale

DiStRibution of oWn pRoDuCtS

99.50

Germany

–

Siemens

A

A

A

A

–

–

–

A

✓

✓

✓

–

–

–

NEXONbér, NEXONhr, NEXONtime, NEXON_PORT

ALDI, Coloplast, dm drogerie markt, Erste Bank, Hankook, Jabil, LINDE Gáz, NISZ, TEVA, UNIVER

✓

✓

✓

✓

–

–

Shiwa Ecosystem, Statusapp, Dynaform

OTP Bank Nyrt. Magyar Telekom Nyrt. MKB Bank

✓

✓

✓

✓

142 89

PortfoLion Digital Kft. (100) –

béla bodnár – Dániel Dojcsák

1123 Budapest, Alkotás utca 17–19.

(1) 392-4000 hello@shiwaforce.com

5

USA, Nigeria, Austria

FusionR, VERK and cDMS product lines and special development

4iG Nyrt., Magyar ExportImport Bank Zrt., NISZ Zrt., Lexalytics, Inc., Garantiqa Hitelgarancia Zrt., Porsche Finance Zrt.

✓

✓

✓

✓

129 68

R&R Partners Holding Kft. (A), individuals (A) –

Csaba Rozenberszki Judit Andráskó Zsolt Rozenberszki

1038 Budapest, Ráby Mátyás utca 7.

(1) 436-7850 info@rrsoftware.hu

8

Switzerland, UK, Romania, Poland

Wealth Connect, Wealth Portal, Wealth Platform, Securities Bank, Securities Events, Securities Asset

Sarasin & Partners, OTP Bank Nyrt., Magyar Államkincstár, Takarékinfo Központi Adatfeldolgozó Zrt.

✓

✓

–

✓

229 42

(100) –

Róbert kő – –

1012 Budapest, Logodi utca 5–7.

(1) 487-3030 info@dorsum.eu

–

A

OTP Bank Nyrt., MOL Group, K&H Bank Zrt., MAVIR Zrt., NTT Magyarország Kft., PannErgy Nyrt., Hold Alapkezelő Zrt.

✓

✓

–

✓

87 23

Balázs Réfi (100) –

balázs Réfi Ildikó Kropok –

1075 Budapest, Madách Imre út 13–14.

(1) 266-2420 info@bluebird.hu

A

A

A

A

✓

✓

–

–

39 A

Individuals (100) –

gusztáv turschl – –

1038 Budapest, Fürdő utca 2.

(1) 453-4100 contact@p92.hu

65

Austria, Germany

–

Siemens

✓

✓

✓

✓

72 64

Individuals (100) –

ákos Szekendy Eszter Ábrahám –

1143 Budapest, Gizella út 51–57.

(1) 780-5000 contact@sysdata-pse.com

Japan

JAVA-based unique software

DXC Technology Magyarország Kft., Magyar Telekom Nyrt., ASIAL Corporation

✓

26 12

Individuals (100) –

Sándor Dankó Erzsébet Papanek Nándor Nagybalyi

1117 Budapest, Budafoki út 209.

(1) 463-0626 infomail@itware.hu

–

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

MM.sys Bt., B+N Referencia Zrt., Knauf Építőipari Kft., MÁV Zrt., Magyar Államkincstár, Honvédelmi Minisztérium

✓

✓

–

✓

43 4

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

balázs németh, miklós konrád molnár, miklós molnár, magdolna Demeter Judit Horváth Roland Bozsoky

1149 Budapest, Pillangó park 9.

(1) 222-2402 titkarsag@terc.hu

–

IFS Applications/ IFS Cloud ERP/ EAM/ESM system

BioTechUSA Kft. Wellis Magyarország Zrt., ANY Biztonsági Nyomda Nyrt., Vajda-Papír Kft., Fémalk Zrt., Inno-Comp Kft.

✓

✓

✓

–

27 5

– InfoConsulting Group (100)

imre Sturcz Cecília Léber Gábor Halász

1132 Budapest, Váci út 22–24.

(1) 236-3700 infohu@infoconsulting.com

D1 document management system, F1 fleet management system, P1 accounting and financial system

A

✓

✓

–

✓

A A

Gábor Cseresnyés (100) –

gábor Cseresnyés – –

2040 Budaörs, Ibolya utca 65.

(30) 600-1400 info@calltec.hu

✓

✓

–

✓

27 11

Libra Szoftver Zrt. (100) –

kálmán faur Zoltán Komora Katalin Sáfár

1113 Budapest, Karolina út 65.

(1) 273-3838 info@softc.hu

✓

15 2

Libra Szoftver Zrt. (100) –

kálmán faur – –

1113 Budapest, Karolina út 65.

(1) 436-0540 info@vtsoft.hu

evoSoft HungaRy kft. www.evosoft.hu

28,716 28,739

2

QualySoft infoRmatikai ZRt. www.qualysoft.com

4,008

3

nexon vállalkoZáSi éS keReSkeDelmi kft. www.nexon.hu

2,859

5,715

4

SHiWafoRCe.Com ZRt. www.shiwaforce.com

2,839

2,839

5

R&R SoftWaRe ZRt. www.rrsoftware.hu

6

DoRSum infoRmatikai fejleSZtő éS SZolgáltató ZRt. www.dorsum.eu

7

bluebiRD inteRnational ZRt. https://bluebird.hu/

1,820

2,036

–

8

p92 it SolutionS kft. www.p92.hu

1,677

1,677

9

SySData pSe kft. www.sysdata-pse.com, www.pse.hu

1,340

1,366

itWaRe kft.

10 www.itware.hu

teRC keReSkeDelmi 11 éS SZolgáltató kft. www.terc.hu

infoConSulting 12 HungaRy kft. www.infoconsulting.com/hu

2,830

2,339

966

626

400

3,631

4,654

966

1,140

885

15

–

–

CallteC 13 ConSulting kft. www.calltec.hu

327

327

–

–

Soft ConSulting 14 HungaRy ZRt. www.softc.hu

53

523

–

–

vt-Soft 15 SoftWaRe kft. www.vtsoft.hu

31

334

–

–

majoR ClientS in 2021

Swiss Post Solution, BaBér, e-Jelenlét, Celebi, Delego Consulting, e-Cafeteria Master Goods, Sága Foods Abacus BÉR, Abacus TB, Abacus CAFETERIA, Abacus MUNKAIDŐ

Magyar Suzuki, Lear Corporation, Kométa 99, Haribo

✓

✓

✓

✓

–

–

no. of full-time employeeS on aug. 1, 2022 of tHem, no. of SoftWaRe DevelopeRS

main expoRt DeStinationS

SoftWaRe pRoDuCtS

1

4,968

SoftWaRe RelateD aCtivitieS

SoftWaRe expoRt aS 2021 in a peRCentage of total expoRt (%)

total net Revenue in 2021 (Huf mln)

Company WebSite

net Revenue fRom SoftWaRe Development in 2021 (Huf mln)

Rank

Ranked by net revenue from software development in 2021

oWneRSHip (%) HungaRian nonHungaRian

top loCal exeCutive Cfo maRketing DiReCtoR

aDDReSS pHone email

1,600 1,376

– evosoft GmbH (100)

istván petényi Erika Balogh Zoltán Gönye

1117 Budapest, Magyar tudósok körút 11.

(1) 381-6400 sales@evosoft.com

Individuals (3) Qualysoft Holding Ltd. (97)

milán Hasznics Henrietta Mencser Katalin Korcsok

1118 Budapest, Rétköz utca 5.

(1) 889-9800 office@qualysoft.com

Ocskay Szilárd, Sass Katalin (100) –

Szilárd ocskay, katalin Sass Judit Nyeste Gergő Dravec

1138 Budapest, Váci út 185.

(1) 465-5100 nexon@nexon.hu

232 A

207 A

A

2,860

NR

balaSyS it kft. www.balasys.hu

A

1,399

goto teCHnologieS NR HungaRy kft. www.gototechnologies.com

NR

gRapHiSoft Se www.graphisoft.com

A

A

A

A

✓

✓

✓

✓

A

A

A

A

✓

–

–

✓

A

A

Zorp Gateway, Zorp Malware Detection, Zorp API Gateway

A

✓

✓

✓

✓

A

12,761

A

A

A

A

A

A

A

A

A

27,270

100

A

Archicad, BIMcloud, BIMx

A

✓

✓

–

✓

no. of full-time employeeS on aug. 1, 2022 of tHem, no. of SoftWaRe DevelopeRS

aleRant ZRt. www.alerant.hu

DiStRibution of oWn pRoDuCtS

NR

ReSale

93,000

majoR ClientS in 2021 ConSulting

A

SoftWaRe pRoDuCtS

inStallation

4ig nyRt. www.4ig.hu

SoftWaRe RelateD aCtivitieS main expoRt DeStinationS

total net Revenue in 2021 (Huf mln)

NR

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

SoftWaRe expoRt aS 2021 in a peRCentage of total expoRt (%)

Company WebSite

net Revenue fRom SoftWaRe Development in 2021 (Huf mln)

Special Report

Rank

20 | 3

oWneRSHip (%) HungaRian nonHungaRian

top loCal exeCutive Cfo maRketing DiReCtoR

aDDReSS pHone email

A A

(71.72) (28.28)

péter fekete Csaba Thurzó Imre Markót

1037 Budapest, Montevideo utca 8.

(1) 270-7600 info@4ig.hu

57

AMCS Kft. (100) –

gábor Darmai – –

1117 Budapest, Infopark sétány 1.

(1) 205-0055 info@alerant.hu

Individuals (100) –

Sándor Cseledi – –

1117 Budapest, Alíz utca 4.

(1) 646-4740 info@balasys.hu

– LogMeIn Holdings Bermuda Ltd. (100)

john joseph markey – –

1088 Budapest, Rákóczi út 1–3.

(1) 413-3780 –

– Nemetschek SE (100)

Huw Roberts Gábor Svéd –

1031 Budapest, Záhony utca 7.

(1) 437-3000 gsinfo@graphisoft.hu

Individuals (100) –

Zoltán madár Tamás Koppány –

1087 Budapest, Könyves Kálmán körút 48–52.

(1) 204-7730 mail@grepton.hu

– IBM Products Holdings B.V. (100)

gyula péter Rehus – –

1117 Budapest, Neumann János utca 1.

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

(100) –

ervin Szabó – –

1016 Budapest, Mészáros utca 13.

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

A

67 A

378 A

444 A

gRepton NR infoRmatikai ZRt. www.grepton.hu

A

3,309

A

A

A

A

✓

✓

✓

–

ibm NR magyaRoRSZági kft. www.ibm.com/hu

A

18,115

A

A

A

A

A

A

A

A

A

2,000 (2020)

A

A

A

A

✓

✓

–

✓

libRa SZoftveR NR fejleSZtő ZRt. www.libra.hu

A

1,381

–

–

Libra3s, Libra11, Libra M.

A

✓

✓

–

✓

A A

Individuals (89), Volán Elektronika Zrt. (11) –

kálmán faur – –

1113 Budapest, Karolina út 65.

(1) 255-3939 info@libra.hu

miCRoSoft NR magyaRoRSZág kft. www.microsoft.hu

A

10,787 (2020)

A

A

A

A

A

A

A

A

A A

– Microsoft Corp.

(100)

Christopher mattheisen – –

1031 Budapest, Graphisoft park 3.

(1) 437-2800 –

✓

A A

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

gábor kelemen – –

1115 Budapest, Bartók Béla út 105–113.

(20) 330-0220 sales@multisoft.hu

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

Christopher greentree – –

1037 Budapest, Szépvölgyi út 35–37.

(1) 872-0000 legal@nng.com

– Oracle Nederland B.V. (100)

titusz Csaba puskár – –

1112 Budapest, Balatoni út 2.

(1) 224-1700 –

Individuals (100) –

lászló Szalóki – Norbert Somkutas

1133 Budapest, Váci út 76.

(1) 431-8030 revol@revolution.hu

A

Individuals (100) –

andrás Sarkadi-nagy Enikő Kovács Gábor Takács

1135 Budapest, Mór utca 2–4.

(1) 237-9800 saldo@saldo.hu

NR

kulCS-Soft SZámítáSteCHnika nyRt. www.kulcs-soft.hu

multiSoft kft.

NR www.multisoft.hu

A

nng SZoftveRNR fejleSZtő kft. www.navngo.com

NR

oRaCle HungaRy kft. www.oracle.com

Revolution NR SoftWaRe kft. www.revolution.hu

1,279

A

A

A

A

✓

✓

✓

82 A

440

A

A

A

A

A

A

A

A

A

23,875

A

A

A

A

A

A

A

A

–

deep.erp, deep. management system, rEVOL Express billing system

Abroncs Kereskedőház Kft., Balatoni Hajózási Zrt., AIKAWA Hungária Elektronikai Kft., KALL Ingredients Kft.

✓

✓

✓

✓

A

✓

✓

–

✓

A

A

A

A

A A

– SAP SE (100)

Szabolcs pintér György Simon –

1031 Budapest, Záhony utca 7.

(1) 457-8333 –

16 8

Zsolt József Koltai (90), Piroska KoltaiBékei (10) –

Zsolt józsef koltai – Diána Wágner

1149 Budapest, Nagy Lajos király útja 117.

(1) 220-6458 sales@trilobita.hu

ERP2U Informatikai Zrt. (100) –

tamás Wehring – –

1023 Budapest, Lajos utca 28–32.

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

A

1,706

–

A

771

–

–

Sap HungaRy kft. www.sap.hu

A

48,460

A

A

A

A

OTP Bank Nyrt., UniCredit Bank Hungary Zrt., MVMI Zrt., HELIT Kft., TRV Zrt., Bodrogi Bau Kft.

✓

✓

✓

✓

A

✓

✓

✓

✓

tRilobita NR infoRmatikai ZRt. www.trilobita.hu

A

1,436

–

–

TriDoc standard, TriDoc enterprise, InfoHUB, TriProject, TriWorkflow

unit4 CoDa NR HungaRy kft. www.unit4.com/hu

A

811

A

A

A

NR = not ranked, NA = not appliacable

A A

20,009

Saldo EasyWeb accounting program, Saldo Creator company management system

A = would not disclose,

A

A

SalDo pénZügyi tanáCSaDó éS NR infoRmatikai ZRt. www.saldo.hu

NR

75

A

252 A

60 A

51

15 A

This list was compiled from responses to questionnaires received by September 7, 2022, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

The list is based on companies’ voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14, or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

4

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Budapest Business Journal | September 9 – September 22, 2022

Socialite

Mörk: Hungarian Psychedelic Soul Finds International Audience

Don’t quote me on this, but Mörk might be the first ever Hungarian band to be mentioned on the U.K. music website NME. DAVID HOLZER

In a review of this year’s Sziget highlights, NME’s Mark Beaumont described the band as “soul futurists [.…] masters of cosmic jazz pop, part Khruangbin, part ‘80s R&B, entirely engrossing.”

That’s high praise indeed, especially as foreign reviewers tend to ignore the Hungarian acts that pack the smaller tents at Sziget.

For those of you who don’t know Khruangbin, they’re an American band that blends soul, rock, dub reggae and psychedelia.

Mörk is Dániel Ferenc Szabó (drums), Damján Ocsovay (keyboard and vocals), Bálint “Jason” Szeifert (bass, guitar), and Márk Zentai (lead singer and guitar), and formed in 2014.

“Me, Dániel, and our former keyboardist Gábor Novai Jr. were studying at the jazz faculty of Kodolányi János University in Székesfehérvár,” Zentai tells me.

“As part of my course, I had the opportunity to make a record, so I asked the others to join me.”

That record led to a debut album, “You Are Free to Choose,” released in 2016. “We enjoyed it so much that we kept going. We met, jammed together, and had a lot of fun,” Zentai recalls.

Building Buzz

Now, Mörk is building quite the buzz outside Hungary. This year, they were part of The Great Escape Festival in the United Kingdom’s ultrahip seaside town of Brighton. They’ll be playing the festival again in 2023.

In August, Mörk was featured on the Brownswood Basement show hosted by broadcaster, DJ, and record label-owner Gilles Peterson on internet radio service Worldwide FM. This is

From left, Damján Ocsovay, Márk Zentai, Dániel Szabó, and Bálint Szeifert. Photo by Karmatik Photoraphy. where I heard them first. I only knew they were Hungarian because I’d seen their name on the list of upcoming bands for the Budapest music boat venue A38.

It’s fair to say that Hungarian soul is not exactly a rich, deep genre. Go into a Hungarian second-hand record shop, and the Hungarian funk/soul/disco section is always the thinnest. Invariably, the Hungarian take on Eurodisco, an acquired taste, dominates.

That’s not to say Hungarian musicians couldn’t play funk and soul.

The great Sarolta Zalatnay’s 1973 album “Hadd Mondjam El” (“Let me Tell You”) on Hungarian state label Pepita proves they could. Although I can’t understand a word she’s saying, Zalatnay’s voice is as raw and soulful as anything I’ve heard. But she didn’t sing in English, which meant that, at the time, “Hadd Mondjam El” was a nonstarter outside Hungary.

I say at the time because, thanks to some American hip-hop dudes sampling the title track and it being released on boutique label Finders Keepers’ hilariously titled “Well-Hung” compilation, “Hadd Mondjam El” is now a collectors’ item. My copy cost me around EUR 50.

(Incidentally, if you want a taste of pure Hungarian soul, type in “Zalatnay Sarolta - Omega - Nem várok holnapig – 1967” on YouTube and be prepared to grin from ear to ear.)

While Zentai agrees with me that 1960s and ‘70s Hungarian music is well worth exploring, he’s proud when foreign listeners say the band doesn’t sound Hungarian at all.

“Our last record, ‘In the Golden Hour,’ is produced to a standard that’s quite rare in Hungary and we recorded it in our rehearsal room.

The concept and execution, the whole aesthetic, were right.”

Pure Voice

and the band are determined that Mörk is heard as widely as possible beyond Hungary’s borders.

Getting their music heard by tastemaker and shaper Gilles Peterson was top of the band’s wish list for years. But, as Zentai says, “although the internet is great for finding out how to contact the right people, reaching them and their audience is still very, very hard.”

Fortunately for Mörk, their manager had a contact working with Peterson and managed to persuade him to listen to “Baby,” a single off “In the Golden Hour” featuring renowned Japanese jazz/neosoul trumpeter Takuya Kuroda. Peterson loved the single and played it on his influential BBC Radio 6 show, listened to all over the world.

Exposure such as this, and playing live, connects Mörk to audiences in the parts of Europe and beyond that produce great artists making the soulful music the band worships.

“For us, soulfulness is very important, and it’s not very prevalent here. It’s kind of missing from the tastes of listeners and creators.

We want to be part of an international soul and funk scene, not necessarily physically, although it would be nice to play more in places like the U.K., France and the Netherlands.”

I agree with Zentai. “In the Golden “For us, soulfulness is very important, Hour” is an excellent album, and I urge and it’s not very prevalent here. It’s you to check it out. But, for me, one of kind of missing from the tastes of the reasons Mörk is finding listeners listeners and creators,” Zentai says. overseas is that Zentai, who has a lovely “We want to be part of an international pure voice that verges on soul falsetto, soul and funk scene, not necessarily sings in English. Even if, given the physically, although it would be nice band’s psychedelic flavor, I’m not quite to play more in places like the U.K., sure what he’s singing about, I’m at France and the Netherlands.” home with the sound.

The band is also driven. “We’d love to Leaving aside considerations of get a good label partner or some kind of comprehensibility, I don’t think label services, someone who could help Mörk’s songs would work anywhere us reach a wider audience,” Zentai says. near as well if they were sung in “We’re recording demos right now and Hungarian. To my ear, it’s a language will be sending them to labels we like. that has a certain stridency that, in We’ll also try to collaborate with people pop at least, works best with faster, we admire, such as Takuya Karoda busier rhythms. Mörk’s stuff is languid, and U.K. poet and MC Brother Portrait, laidback, and drifting, and Zentai’s who’s amazing.” voice is perfect for it.

Mörk plays at a special show at the But, apart from making music that fits Synagogue in Rumbach Sebestyén utca perfectly into the neo-soul/funk and as part of Budapest Showcase Hub jazz niche, Mörk also has a game plan. on October 20. As the NME says, Speaking to Zentai, it’s clear that he the band is excellent live.

22 | 4

Socialite

www.bbj.hu

Budapest Business Journal | September 9 – September 22, 2022

The Robert Burns International Foundation is known for two events. The first is a formal charity fundraising gala, held on the Saturday closest to January 25, the birth date of Robbie Burns, the Scottish national poet. The other, a more lowkey family event where children can be involved, was held for the fifth time on Sunday, August 28.

Photos by pellephoto.com

Burns BBQ Basks Under Glorious Summer Sun

fantastic food prepared by the team of chefs, including fillet steak, hot smoked salmon and pulled pork, not to mention the salted caramel brownies,” said Douglas Arnott, chairman of the RBIF board.

“With the wines sponsored by the neighboring Etyeki Kúria, it was a perfect way to spend a Sunday afternoon in the sun. A particular

thanks goes to law firm CMS, who kindly sponsored the event,” he added.

The RBIF has raised millions of forints for sick Hungarian children over its 25-year history, principally through the Budapest Burns Supper, where haggis is served, whisky flows, and the entertainment runs late into the night.

The idea with the BBQ is to organize an afternoon for families, where friends

and supporters of the foundation can bring along their children to enjoy some quality time together with good food, drinks, and plenty for the kids to do.

Sponsorship covers the food expenses, with any money left over going to one of the RBIF projects supporting children’s hospitals. See rbif.hu for more on the work of the foundation.

BBJ STAFF

The venue for the RBIF’s annual summer BBQ was the Chefparade Country Venue in Etyek, about 28 km or a 40-minute drive west from Budapest.

“The weather was kind to the many guests and families who attended, and everyone was able to enjoy some

Margitsziget Theater Says Goodbye to Summer With Omega Hits Some of the most iconic Hungarian rock tunes will be given the last starring role of the season at the Margitsziget Theater on Saturday (September 10) in a story that the producers say will be familiar to everyone who has ever been young and in love.

Margitsziget Theater describes “The Ballad of the Pearl-Haired Girl” (playfully subtitled “The Alpha and Omega of Musicals) as a fairy tale

wrapped in “grown-up clothes.” The season-closing show is a joint production of the band Omega, calling on its back catalog of Hungarian rock hits, and dance troop ExperiDance. Musical actors Nikolett Füredi, Máté Szabó, Viktória Békefi, Ádám Lux and László Janik star as the main characters.

Füredi explains that the piece “is the story of a young girl’s first great love and disappointment, from her own perspective and from that of her parents, who are at first quite estranged from each other.” She says she loves the Omega songs.

“They remind me of my childhood when I absolutely did not think that

I would ever be able to sing them myself.

The ‘Pearl-Haired Girl’ is a very cathartic moment of the performance, not only musically but also dramaturgically, as it is about my unborn child, a memory and trauma that a mother or parent can never process. For me, this is the highlight of the performance; it touches me very deeply spiritually.”

Máté Szabó created and continues to bring the character of Frédi Trombitás to life. “I was given a completely free hand in shaping the character of Frédi, which is why this role is very dear to me,” he says.

He adds, “I grew up in a musicloving family, and from kindergarten

to high school, music accompanied me throughout my life. I knew Omega’s hits from a very early age; I learned them, I loved them, and I have to say, it feels incredibly good that now, as an adult, I can play a role in which I can sing these songs.”

The story is set on the shores of Lake Balaton and woven with a touch of mysticism, combining 21 Omega hits, 24 ExperiDance dancers, and five musical actors.

“Playing in the open air is always a great experience. It’s as if the energies are multiplied; there is an extra charm to the fact that you can swing a lot of spiritual chords in the huge space.

Margitsziget is also a truly unique and wonderful location among outdoor stages here in the heart of the city,” Füredi adds.

4

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Budapest Business Journal | September 9 – September 22, 2022

Socialite | 23

Photo by pixeltaster / Shutterstock.com

Time for Wine Palates to go Back to School The Volcanic Wine Festival (Vulkanikus Borok Fesztiválja), which takes place in the winemaking village of Gyöngyöspata in the Mátra wine region of Hungary’s northeast, has become a much-treasured back-to-school event for wine lovers.

ROBERT SMYTH

Held for the sixth time this year, this chilled celebration among the cellar rows features wines from Gyöngyöspata’s grower-producers and others from Mátra and guests from other Hungarian volcanic regions, of which there are a fair number. It has been so popular that it was expanded this year from a one-day event to a three-day festival, held from August 26-28.

Mátra is a tremendously exciting region now that many smaller players have found their winemaking feet. They have progressively poured into the region following the break-up of Nagyréde. This formerly stateowned operation made vast quantities of wine in what is Hungary’s secondlargest wine region in terms of land under vine.

Back in the day, Nagyréde’s massproduced wines were exported far and wide, even to a café/wine bar in my hometown, and the quality was surprisingly good. Now, some outstanding red and white wines are being made here.

A masterclass called “The New Mátra,” presented by Dániel Kezdi (the organizer of Furmint February) and moderated by Wine Flow’s Richárd Németh, introduced an exciting range of wines from new wave producers. The region doesn’t quite have a signature grape variety, at least when it comes to white, although Kékfrankos is perhaps the red wine flagship.

First up was a dry Furmint from the 2021 vintage by SzignárovitsMaka Pince, by promising young winemaker Márk Szignárovits. It has varietally pure aromas and flavors of green apples and pear, with lively and refreshing acidity, although the alcohol of 14.5% does make the finish a little rustic. Nevertheless, this is very decent for a wine made in a plastic tank.

From Centurio Borház came FáyDomb Sárgamuskotály 2021, which is made from a grape more widely associated with Tokaj, although it is actually a French variety: Muscat Blanc à Petits Grains, or Muscat Lunel.

Nevertheless, it appears to feel at home in Mátra, where it captures the kind of bright acidity and zesty fruitiness also found in Tokaj, which sets it apart from the often flabbier and flat wines made from the variety in many other parts of the world.

This is always a delicious wine (grapey, fresh, floral and fruity, especially peach) from Centurio’s Balázs Ludányi, costing HUF 4,490 from www.artizanshop.hu.

“The quality is very good.

It’s a case of so far, so good; the PH, acidity and sugar levels are good. We were expecting a sugar spike, but it hasn’t materialized. One interesting aspect is that the skin-to-juice ratio is higher than usual due to the smaller size of the berries, which is likely to bring about a different character in the wines.”

Established Winemaker

Riesling (Rajnai rizling in Hungarian) was the first wine made by Bálint Losonci from vines that he planted.

Once a young gun, he has become an established winemaker who is always keen to introduce the newbies.

His winemaking has become increasingly sophisticated, as well as heading in an ever more natural

among the region’s best with this grape.

Kékhegy Pince’s Zweigelt 2018 (HUF 3,556 from matraiborokhaza.hu), with its ripe black cherry, spicy, peppery notes, was another exciting wine from a newish winery.

Meanwhile, the Mátra new wave continues to grow. Among them, Miki Bata, the owner-winemaker at BataLoyal Estate, was yet to start harvesting but noted that picking had started for others on August 22, around two weeks earlier than usual, when I spoke to him on September 5. Bata-Loyal Estate has 20 hectares of vine, four of which are currently yielding.

“The quality is very good. It’s a case of so far, so good; the PH, acidity and sugar levels are good. We were expecting a sugar spike, but it hasn’t materialized,” said Bata. (By an odd coincidence, I had interviewed him many years for this paper, when he was working in IT security.) Like in many other regions of Hungary, the expected quantity of grapes and wine is lower this year than usual due to the extremely hot and dry summer, leading to smaller berries forming and hence less juice in the grapes.

direction. Losonci Riesling 2019 has the variety’s prized petrol note, along with green apple but also some bruised apple. This latter shows the minimal use of sulfur favored by Losonci and natural winemakers in general.

Losonci told me Mátra is a particularly attractive area to make wine due to its mix of volcanic and limestone soils, highly prized in the wine world; here, they often appear mixed together in the same vineyard.

(Incidentally, the neighboring region of Eger also has volcanic and limestone soils, and it is interesting to try a pair of the St. Andrea Winery’s white wines, the vibrantly citrusy Boldogságos 2021 from that vineyard’s volcanic rhyolite tuff, and the spicier St. Andrea Örökké 2021 from limestone.

They cost HUF 3,950 and HUF 4,950 from Bortársaság, respectively.)

Losonci has recently added a wine Mátra natural wine pioneer made from Purcsin to his range. This Levente Major. Photo by Or Szűcs. is a black grape variety common in Hungary in the 19th century prePhylloxera era that almost died out “One interesting aspect is that until artisanal winery Basilicus’ the skin-to-juice ratio is higher winemaker András Kanczler planted than usual due to the smaller size 1,200 Purcsin vines in Tarcal’s of the berries, which is likely to Mestervölgy vineyard in 2013 and bring about a different character in made the first red wine from these in the wines,” said Bata. He added that 2017 in the Tokaj region. flowering occurred without problems Levente Major is another of the in the spring and that the rain in late natural wine pioneers in Mátra. His August came at a good time.

Cibike Olaszrizling 2017 is not just “We had no issue with disease; in fact, I natural but also an extremely fine wine: full-bodied, oozing Williams pear with haven’t sprayed my Zöldveltelini [Grüner Veltliner] in three years,” he mentioned. a waxy texture. It costs HUF 6,300 He is in the process of applying for from borarum.hu. organic status for his wines. He noted The Region’s Best that Gyöngyöspata is packed with Itt és Most’s soon-to-be-available organic growers. It’s a kind of knock-on Tihanyi kék 2021 is made from another effect; it’s much easier to be organic of the pre-Phylloxera comeback when your neighbors are also. varieties; it has a pale Pinot NoirThe Budapest Wine Festival will be like color, fine-grained tannins, and in full swing (September 8-11) when pronounced pepperiness like a Syrah. this issue comes out, held in its usual Wine blogger turned winemaker Zoltán stunning setting of the courtyards of Németi’s Octopus 2019 puts him Buda Castle. More on that later.

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