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ONE PART VOODOO, ONE PART EXPERIENCE Technologically skilled, strong in IT, but weak in sales − this is how they see Hungarian startups in California, at least those who make it there, says one of Hungary’s leading angel investors, Dr. Antal Károlyi. He talks about the essence of angel investments and believes that Budapest has great potential but doubts that the city can become a startup capital anytime soon. 09-10

NEWS

Punishing times The upcoming fine payment deadline is a firm reminder for the banks to stay on their toes; even if they think they know the rules, there is a strong chance they are wrong. Despite claiming they did nothing wrong, once more, banks are taking their medicine and hoping for the best. 03

BUSINESS

MNB growth campaign widely seen taking off Even skeptics admit that widening the scope of the scheme of the National Bank of Hungary’s growth campaign will likely boost both participation and the volume of money flowing into the economy. 08

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Flexibility rules These days, the post-crisis corporate world is increasingly subject to a single requirement: flexibility. Employers, workers and HR companies must adapt to quickly changing demand for manpower. 11-13

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Budapest Business Journal | April 25 – May 08

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THE COST OF APPEASEMENT The end of April brings another milestone in the strained relationship between the establishment and the finance sector. Banks have to pay a total of HUF 1.2 billion in penalties plus refund billions more from what the central bank determined were illegally charged fees. The reactions when the decision was announced at the end of March were all too common: the punishment is unfair, the bank practices are completely in line with the law and the verdict may even merit going to court. But thus far, that’s all anyone has got: words, complaints about the unpredictability of the environment, and the negative impact on the overall economy if banks can’t operate profitably. But despite all that rhetoric, as with this latest penalty, the banks take it time and again. This is now the price of doing business in Hungary, and also the cost of the appeasement that the banks embarked on last year. It is supposed that they hoped this ‘turning the other cheek’ approach would result in leniency from the government; if that was the policy, it has obviously failed. In fact, the message of the MNB penalty is that, despite the banks best efforts to keep their fees and operations in order, there is not a single financial firm operating in

Hungary that is in line with the pertinent regulations. This could only lead to more scrutiny, and seemingly MNB auditors don’t like wasting time on investigations that don’t yield results. The banks aren’t the only ones to gradually come round to accepting their fate. Many international companies were not shy of criticizing the ‘unorthodox’ policies ushered in when Fidesz came to power in 2010. The critics gradually fell silent. Even Magyar Telekom, which believed its sectoral taxes to be in breach of European Union law, gave up the battle and signed up as one of Orbán’s strategic partners. The reelection of Orbán’s party, albeit no surprise, bodes ill for the finance sector. Another assault on the foreign currency debt bailout effort is set to arrive sometime later this year and the banks are usually the go−to industry whenever a hole appears in the budget. Maybe it is time for the banks to man up and, if they say they are right and if they claim they did nothing wrong, defend themselves from what consequently must be unfair treatment. There are plenty of legal forums in Hungary, as well as on the international scene. Until they do so and stop accepting verdicts they say are unfounded, they can expect little sympathy from anyone.

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A PLEASANT BUZZ We are by no means out of the gutter, the crisis has become a permanent reality, but it is still impossible to miss that there are, at long last, some signs of stirring within the economy, like an animal slowly awakening after a long hibernation. The most important matter was decided at the April general elections, although that didn’t result in a change in government, nor apparently, in style of governance. But at least with that uncertainty out of the way, businesses can start to focus on what they want to be doing: growing and making money. All indicators show that not only is the economy set to grow (albeit in such low digit numbers in terms of gross domestic product that nobody can actually feel the difference), but that we may finally see a period of stability that is a genuine foundation for expansion, rather than just a positive spin on stasis. A new study found that the SME segment – which has streamlined its operations to a bare minimum –has reached the point where it has no choice but to spend, to make good on earlier shelved upgrades and equipment replacements, since its outdated gear is translating into tangible and very painful business losses. The growth of the economy is bound to bring growth for businesses, growing headcounts, bigger office

spaces, more construction, more work for recruiters. Key areas of the economy have shifted to approach the next parliamentary cycle with a greatly different lay of the land, given that many sectors have successfully adapted their business models to the harsh realities. All measurements of sentiment are growing positively, with the statistics showing increases month to month. There is no reason to get carried away, but surely, there is reason aplenty to let the gloom go. It’s time to invest, brush off plans that sunk to the bottom of the drawer a few years back, time to take on that big project, time to hire the new people necessary to carry the increasing load. One thing that people in all walks of business have learned, the seminar being more painful for some than others, is to avoid recklessness. This alone should give a degree of conﬁdence that though growth will be slow, it will also be steady, and there won’t be any bubbles that could lead to disaster. Sure, we’ve had it bad, we are prone to exaggerate and any glimmer of light may seem like the second coming. Still, the fundamentals are there and maybe a little touch of Munchausen styling is exactly what we need right now.

SURE, WE’VE HAD IT BAD, WE ARE PRONE TO EXAGGERATE AND ANY GLIMMER OF LIGHT MAY SEEM LIKE THE SECOND COMING. STILL, THE FUNDAMENTALS ARE THERE AND MAYBE A LITTLE TOUCH OF MUNCHAUSEN STYLING IS EXACTLY WHAT WE NEED RIGHT NOW

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1 News

NEWS

Pálinka problems

NEWS

Speaking of figures

macroscope

PUNISHING TIMES FOR THE BANKS The deadline is fast approaching when banks will have to fork out a considerable sum of money after being penalized by the regulating National Bank of Hungary. Worse than the penalty itself, though, they remain worried about what they see as a whim−based approach. GERGŐ RÁCZ

The National Bank of Hungary (MNB) is continuing its deep scrutiny of the finance sector and continues to deliver firm reminders to market participants to keep in line or face the consequences. The central bank announced late March that it had conducted a comprehensive audit and found wide scale illegal fee management practices. It penalized 35 banks a total of HUF 1.2 billion and obliged 33 of them to give their customers a full refund. Four banks have to pay nearly HUF 100 million (the maximum sum), while the refunds will surely total in the billions. The banks were caught completely off guard by the decision and stated that they resent the ruling. Several finance firms have since insisted that their fee systems were drawn up through regular consultations with their own legal experts, while also consulting with the finance market regulator to clarify debatable points. Still, despite the banks being convinced they are in the right, the MNB won’t be looking at too many court cases by the look of things. Raiffeisen told journalists earlier that it is ready to seek legal reparations but that it is going to try and find a solution around the negotiating table first. MKB announced that it wouldn’t be going to court, citing the interests of its customers, though it remains convinced it hasn’t done anything wrong. Bank sector sources said there likely would be lawsuits filed, since it is the policy of some parent companies to challenge questionable authority rulings. Nonetheless, all banks discussing the matter in the public domain have said they would observe the rule of law and make the necessary payments by the determined April 30 deadline.

STORY HIGHLIGHTS ■

Banks to pay ﬁne, refunds for illicit charges by April 30 ■ Several concerns persist regarding MNB regulatory practices

QUESTIONABLE VERDICT Bank sector sources speaking on condition of anonymity raised several issues regarding the decision. For starters, the wording of the verdict indicates that the MNB took objection to the fact that the fees in question were clearly displayed in monthly records for customers to see, so in a sense, the regulator is punishing the banks for acting transparently. Another problematic aspect is getting the refund to customers who have since changed banks. Finance companies aren’t allowed to store or manage the personal information of people who are no longer their clients. As such, even if somehow they still had contact information for customers who have since signed up with another bank, the act of contacting them would in itself be illegal. The only legitimate solution thus far has been to place notices on the company website and at branches, notifying former customers to make an appointment to discuss the details of how they could receive their refunds. Of course, realistically speaking, it is

hardly common behavior to regularly check out the website of a company you no longer deal with, much less visit its offices. More importantly, the banks are once more finding themselves in a situation where, no matter how lightly they try to tread, they find they are penalized and can do nothing to avoid it. GOING STRONG Even if there are eventual lawsuits, based on its track record since it also became the overseer of the financial markets, the MNB has little to worry about. It has already won first instance cases against KDB Bank and Sberbank, both companies filing complaints against MNB fines for illegally pushing the costs of the transaction levy onto their customers. It has also been notably active in cracking down on the finance industry over the past year, levying fines for issues like bank fees, the handling of customer complaints and also threatening legal action against the press whenever the idea is raised of something untoward happening within the central bank building on Szabadság tér. This ranges from trying to clean up the public relations mishap stemming from Governor György Matolcsy being portrayed as giving ammunition for

HUF 1.2 bln

in ﬁnes to be paid by April 30 insider trading to investment bankers, to actual criminal charges for accounts of the MNB spending billions for unspecified purposes, apparently as a recompense for supporting the Fidesz government.

THE BANKS ARE ONCE MORE FINDING THEMSELVES IN A SITUATION WHERE, NO MATTER HOW LIGHTLY THEY TRY TO TREAD, THEY ARE PENALIZED AND CAN DO NOTHING TO AVOID IT

04 News

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

NEWS

IN BRIEF

Budapest Business Journal | April 25 – May 08

I drive 50,000 kilometers a year. It would have been impossible to go decades without some run−ins with the police. It’s part of the mathematics. Socialist EP frontrunner Tibor Szanyi talking about his public image as a bit of a drinker

Minister of Public Administration and Justice Tibor Navracsics and Zoltán Pokorni, mayor of the 12th district of the capital in Budapest, remembered Hungarian victims of the Holocaust on April 16 at the Danube Memorial Shoes. Pokorni explained that although in Europe the commemoration of the victims of the Holocaust is generally tied to the liberation of Auschwitz, this Memorial Day in April is linked to Hungarian events. As he phrased it, “the Holocaust is not taken as a matter of a distant European country, but as a part of Hungarian history”. He added “the killers were Hungarians and Hungarians were the victims too, so this is our business”. Pokorni said that all this had happened during the German occupation of the country, but that is “only an explanation and not an excuse” for the Hungarian government and politics of past times. The Memorial Day for the Hungarian Victims of the Holocaust has been held every year on April 16 since 2001; it marks the day in 1944 that saw the beginning of the forced movement of Hungarian Jews in ghettos. A Memorial Year is being observed in Hungary in 2014, the 70th anniversary of the Hungarian Holocaust.

ECONOMY MNB AIMS TO RAISE STAKE IN INTERBANK CLEARING-HOUSE GIRO TO 100% The National Bank of Hungary (MNB) aims to raise its stake from 8.09% to 100% in interbank clearing−house GIRO Zrt within the next two months, the central bank has announced. The MNB has agreed to purchase a 78.12% stake in GIRO from big shareholders and this acquisition will be completed in the last week of April. The latter transaction will raise the MNB’s stake in GIRO to 86.21%. The cost of acquiring all bank−owned stakes would be HUF 9.5 bln, according to an asset evaluation by an independent auditor. The MNB said it would assume management of GIRO at the May shareholders’ meeting. Currently 22 banks, including the MNB, own GIRO, whose share in all interbank transactions is about 99% by number and 5% by value. The company posted pre−tax profit of HUF 1.7 bln on revenue of nearly HF 6 bln in 2013. €24 BLN IN NET EU FUNDING FOR 2007-2013 BUDGETARY CYCLE Preliminary data indicates that Hungary received net European Union funding of €24 bln during the EU’s 2007−2013 budgetary cycle, European Court of Auditors member Szabolcs Fazekas announced. Fazekas said that the European Union allocated €32.8 bln in total funding to Hungary (including agricultural and rural− development subsidies) during

the seven−year budgetary cycle. Fazekas noted that Hungary was able to utilize more than 90% of the EU funding available to the country during the 2007−2013 budgetary cycle, and 99.8% of public investments were financed from EU funds. Preliminary calculations show that Hungary’s net beneficiary position will be maintained in the new 2014−2020 budgetary cycle as well, again to the tune of around €24 bln, Fazekas said. GKI-ERSTE CONSUMER/ BUSINESS CONFIDENCE GAUGE UP GKI−Erste’s gauge of consumer and business confidence in Hungary rose further in April, with companies statistically at their most optimistic since the summer of 1998, and consumer confidence at another eight−year high. According to national news service MTI, the confidence index for the construction industry saw its greatest increase since February 2013. Businesses planned more new hires than in March in manufacturing and construction, but readiness to hire decreased in trade and services.

DOMESTIC NMHH PUBLISHES DRAFT TENDER FOR AIRWAVE LICENSES The National Media and Infocommunications Authority (NMHH) has published the draft documentation for the tender procedure regarding spectrum licenses for the 800 and 2,600 MHz frequency bands, and for the formerly unused portions

Numbers in the news

1.2%

y/y rise – to 1,827,692 – in the number of registered business entities in 2013, data from the Central Statistical Office shows

€2.5− €3 bln in foreign direct investment is expected in 2014 (not including large individual transactions such as transit investments or the state purchase of energy companies), according to the National Economy Ministry

of the 900 MHz, 1,800 MHz and 26 GHz bands. Comments and queries may be submitted through May 7, with application ﬁling permitted from June 17. An official statement from NMHH said in part, “The aim of the tender is to develop digital competencies among the population; to enhance internet access and the online presence of micro−, small− and medium−sized enterprises; to boost e−commerce, e−invoicing and e−payment; and to spread e−signature use.” BUDAPEST HOTEL ROOM SERVICE CHEAPEST IN EUROPE In a study based on United Nations World Tourism Organization data undertaken by online portal TripAdvisor.com on room service rates in 48 frequently visited destinations worldwide, Budapest hotels have earned kudos as the least expensive in Europe. Budapest placed third overall in the survey, nipping fourth−place ﬁnisher Prague. Tunis hotels were cited as providing the cheapest room service worldwide; Helsinki was deemed the most expensive. XP PHASE-OUT TO COST HEALTHCARE BILLIONS The termination of support for the popular Windows XP operating system will likely cost Hungarian healthcare several billion forints, business daily Világgazdaság reported. Some 90% of all computers in healthcare institutions use the software, the replacement of which would alone cost hundreds of millions. However, most of the computers are outdated and won’t be able to run more advanced OS programs, meaning they will also have to be replaced. The National

Infocommunications Service said it is in the process of reaching a deal with Microsoft to remedy the situation.

POLITICS NEW PARLIAMENT TO MEET FIRST ON MAY 6 President János Áder has convened Hungary’s new parliament on May 6, the President’s Office announced. Under Hungary’s constitution, the president must call the inaugural session of the country’s new parliament within 30 days of the general election (held this year on April 6). The President, who will put forward a nomination for the country’s next prime minister, will open the session. Parliament elects the new PM with a simple majority. The founding session will also elect a parliamentary speaker, deputy speakers and notaries in a secret ballot. EUROPEAN PARLIAMENT TO DEDICATE HALL TO HORN Despite reservations from the country’s left−wing MEPs, a hall in the European Parliament building will be named after former Hungarian Prime Minister Gyula Horn. MSzP MEP Csaba Tabajdi made the announcement from Brussels, saying the dedication would commemorate Horn’s “role in the uniﬁcation of Germany and of Europe”. Horn was prime minister from 1994 to 1998 after helping oversee a change in regime as Hungary’s last communist government Foreign Affairs Minister. Fidesz−KDNP MEPs did not support the measure, stating that measures implemented by Horn still divide Hungarian society to this day.

Photo: Lajos Soós / MTI

MEMORIAL DAY FOR THE HUNGARIAN HOLOCAUST

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News 05

Budapest Business Journal | April 25 – May 08

COMPANY NEWS

The occupation rate at five−star hotels in Hungary rose to 51.1% in January and February, up from 45.3% a year earlier, statistics released by the Hungarian Association of Hotels and Restaurants (MSzESz) show. MSzESz further reported that the gross price per room at five− star hotels in Hungary rose 12.7% to HUF 31,524 during the period.

DR. ROSE TO EXPAND SERVICES Private healthcare provider Dr. Rose now offers its line of services to the middle class, the company announced at a recent press conference. The corporate division of the health clinic is the result of a HUF 260 mln investment, mostly coming from the National Bank of Hungary’s ‘Fund for Growth Program’. The firm also recently opened an orthopedic center at its HQ in downtown Budapest. The new line is available via cooperation with Union Biztosító. The health clinic now occupies two floors in the Roosevelt 7/8 office building in District 5. Extending capacity is paired with extended staff as well. The new orthopedic section boasts internationally recognized professor Dr. László Hangody. The Dr. Rose Corporate Health Center and Orthopedic Center, as an umbrella brand, oversees and manages the company’s five major divisions (private hospital, orthopedic center, obstetrics, plastic surgery, and corporate health division). The private hospital has been operating since 2007.

The board of Russian state−owned oil company Gazprom Neft has decided to acquire a 50% stake in Hungary−based RAG Kiha, which owns an exploration license in southwest Hungary. Gazprom Neft will make the acquisition through its Serbian unit NIS, which already has a partnership with RAG Hungary, a unit of Austria’s Rohol−Aufsuchungs.

SAMSONITE TO COMPLETE CAPACITY EXPANSION AT SZEKSZÁRD PLANT Samsonite Hungary, the Hungarian unit of U.S.based luggage manufacturer Samsonite, will complete a HUF 2.4 bln (€7.8 million) capacity-expansion investment at the company’s plant in Szekszárd in May, company officials informed national news agency MTI. Samsonite Hungary expects the investment to increase the unit’s luggagemanufacturing capacity by 30%. The company received HUF 717 mln in funding for the expansion via the government’s ‘New Széchenyi Plan’. Samsonite Hungary expects to hire 50 more workers as a result of the investment, raising the total number of people the company employs to 550. The company expects pre-tax proﬁt of HUF 1.5 bln on revenue of HUF 15 bln in 2014, up 25% and 18.1%, respectively, from last year.

signed a $10 mln purchasing−credit agreement in Budapest. Under terms of the agreement, Eximbank will provide “preferential ﬁnancing” to Belarusian import− ers of Hungarian products.

Musashi Hungary, the Hungarian manufacturing unit of Japan−based vehicle spare parts maker Musashi, will supply Audi, Jaguar and Honda models under three recently signed contracts. The contracts are worth around €110 mln com− bined and will run for up to ten years; the orders will begin in 2015 and 2016.

MVM Ovit, a unit of the state−owned Hungarian Electricity Works (MVM), an− nounced it has won a nearly HUF 14 bln contract to build a 185−kilometer power line network in Jordan. Contracted by Jordan’s National Electric Power Com− pany, MVM Ovit will be constructing two 400−kilovolt power lines as well as provide the concomitant cable and optical cable network installation and man− agement in the capital city of Amman.

Hungarian−owned Innomed Medical has signed a joint venture agreement with China−based Biocare Bio−Medical Equipment to sell deﬁbrillators in China. With registered capital of more than HUF 100 mln, the joint venture is split 49%/51%, respectively, by Innomed and Biocare.

Rosenberger Hungary, the Hungarian unit of German high−frequency con− nector and custom−cable manufacturer Rosenberger, has launched a HUF 2.6 bln investment to expand production at the company’s plant in Jászárokszállás (northern Hungary).

Pancho Arena, that football stadium which continues to gather intermittent inter− national media attention as a symbol of Minister Viktor Orbán’s ‘dictatorial power’, has been inaugurated in the PM’s hometown of Felcsút. Named for all−time soc− cer great Ferenc Puskás – ‘Pancho’ was the striker’s nickname when he played for Real Madrid in the 1960s – the football stadium can seat up to 4,000 spectators, more than twice the number of actual citizens in Felcsút (population approximately 1,800) and multiple times the ADVERTISEMENT number of fans typically attending a match hosted by the hometown club Puskás Football Academy.

The general meeting of ING Private Pension Fund has decided to merge the fund into the Horizont Private Pension Fund on June 30. The private pension fund service provider of ING will cease to operate on June 30 due to recent changes in the regulatory environment. ING Private Pension Fund had more than 27,000 members with assets of about HUF 71 bln at the end of 2013.

OTP Bank officials have notified local media that opera− tions in the Crimea region of Ukraine will be ceased, ef− fective April 18, due to legal uncertainty resulting from the political situation in the region. An official statement sent from the bank to wire service MTI stated “several Russian laws governing the operation of the financial system in the Crimea that are contradictory to the exist− ing Ukrainian regulation have [gone into] effect.” On the occasion of its fifth anniversary since founda− tion, software−as−a−service (SaaS) producer Prezi announced the release of a Hungarian−language edi− tion of its increasingly popular presentation software. Hungarian will be the eighth language in which Prezi is available, following English, Spanish, Korean, Japa− nese, Portuguese, French and German editions released since the company’s formation in 2009. The Hungarian Export−Import Bank (Eximbank) and the Development Bank of the Republic of Belarus

06 News

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Budapest Business Journal | April 25 â&#x20AC;&#x201C; May 08

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News 07

Budapest Business Journal | April 25 – May 08

MORE CLASHES WITH EU OVER BOOZE AND CIGARETTES

MACRO Speaking X of ﬁgures The Budapest Business Journal presents the most important macro data of the past fortnight.

The European Commission has taken three infringement procedures against Hungary to the next level after it received legal ammunition from the European Court of Justice. The procedures concern an antitrust law for the farm sector, excise duties on spirits, and trade in tobacco products.

0.1% consumer price inflation in March

BBJ STAFF

8.1% rise in February industrial output

82.7% of GDP continue in Hungary “within those boundaries allowed by the EU”. Rural Development Minister Sándor Fazekas was somewhat more outright in his

THE GOVERNMENT REAFFIRMED THAT IT IS COMMITTED TO MAINTAINING HOME DISTILLATION OF PÁLINKA AS A PART OF THE COUNTRY’S ‘CULTURAL HERITAGE’

reaction and called the court ruling “another outrageous provocation by the bureaucrats in Brussels”. The other two cases have also entered the stage of the “reasoned opinion”, which is the second stage in the EU infringement procedure, and precedes taking matters to the European Court of Justice. The EC has asked Hungary to comply with rules that require cartel members to be fined, noting that the country had earlier adopted a law “which essentially prevents the Hungarian competition authority from sanctioning cartels on agricultural products”. The EC also asked Hungary to amend legislation that restricts the sale of tobacco products after the introduction of new tax rates. At present, following a change in the value added tax or excise tax rates, tobacco products fitted with tax markings bearing the old rate may not be sold by wholesalers or importers after a period of 15 days. The government said the earlier practice of hoarding by producers and distributors ahead of tax hikes harmed the central budget. The Economy Ministry said that the government does not want to modify excise duty regulations, because it believes these conform to European Union law and is prepared to defend this position before the European Court of Justice if necessary.

the central government’s debt, excluding municipalities

HUF 226,000 the average gross salary between January−February, up 0.9% on the year

28.3% rise in the construction industry’s output in February on the year

Sources: ÁKK, Central Statistical Office

Legislation in force since the fall of 2010 allows Hungarian households to distill – for personal consumption – the equivalent of 50 liters of pálinka containing 86% alcohol tax− free every year. The court found the legislation to be in violation of EU law because of an EU directive that allows only a 50% reduction on the normal excise rate for such distillates. The court said that the minimum excise tax Hungary would have to introduce on pálinka to comply with the directive would be €550 per hectoliter of 100% alcohol. Last year, contract distillers made more than 15 million liters of pálinka. Nearly the entire amount was tax exempt. The government reaffirmed that it is committed to maintaining home distillation of pálinka as a part of the country’s ‘cultural heritage’. Accordingly, the government will start talks with the European Commission and make every effort to ensure that home distilling of pálinka can

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2Business Insight

MNB GROWTH CAMPAIGN WIDELY SEEN TAKING OFF

GERGŐ RÁCZ

Continuing with its spirit of hands−on measures in the economy, György Matolcsy’s central bank reaffirmed its commitment to assist government goals of economic expansion through its own means last year. The plan dubbed the ‘Funding for Growth Program’ involves banks getting money free from the MNB which they in−turn lend at a maximum of 2.5% interest to businesses for new developments or to replace existing loans with the better conditions. Seeing that the banking sector’s activity was muted and businesses didn’t have access to money that could be spent on new developments, the central bank started the campaign last year and then increased the budget to altogether HUF 2,750 billion in value with the purpose of invigorating lending in the economy. So far, central bank statistics show that some HUF 800 billion has been pumped into the economy through the program. Opinions differ about the reasons for the limited banking sector activity. Financial firms usually claim that there’s no lending because there isn’t any demand, since businesses lack the capital that would allow them to front new developments. In contrast, the central bank, as well as government politicians, are critical of the banks for failing to play their role in the economy and for not supporting growth though more intensive lending. The central bank estimates that if companies use up the full amount available for new developments under

STORY HIGHLIGHTS ■

Central bank stimulus campaign seen taking off ■ Banks applaud longer run time, relaxed application rules

the first stage alone, it could grow the economy by 1−1.5% of gross domestic product this year. Naturally, larger volumes issued would add to the overall expansion. SLUGGISH MONEY Some analysts are skeptical about the success of the program. On the one hand, they are doubtful that what is essentially free money from the MNB will actually be translated into new developments, meaning jobs, tax revenues and overall economic growth. Also, the rate of the loan issuance is causing grounds for concern, since while the budget for the first stage of the campaign has essentially been depleted; the money available under the second stage is trickling out at best. Nevertheless, the banks are optimistic. The MNB has even heeded advice from the market and revised the conditions, broadening the scope of the program. The move was applauded since it took into consideration several issues that the banks had raised as potential hurdles to wider participation in the scheme. HOLIDAY RUSH This, as well as the longer timeframe for the second stage of the program has market participants optimistic that market realities will spur a large wave of interest as the December 31 application deadline approaches. The MNB shares that view. Its research into the first stage of the program found that new developments were mostly initiated by small and micro enterprises, whereas mid− and large−sized corporations were hardly active. This was attributed to the short time frame under the first stage, which didn’t allow bigger firms to complete preparations on their projects, so they didn’t bother applying for money. Accordingly, the longer period of time is expected to give bigger

CENTRAL BANK GOVERNOR GYÖRGY MATOLCSY ANNOUNCING THE STIMULUS PROGRAM

businesses a sufficient window to hammer out the details of their ventures, after which they too can apply for the beneficial loans. There is also basic human nature to consider, namely the tendency to leave everything to the last minute. As such, bank administrators are already penciling in overtime for the holiday season, when the imminent closure of

the program is likely, it is hoped, to produce a flood of new applications. Banks are also encouraging the government to up its efforts to begin the distribution of European Union funds from the new budgetary cycle that starts this year. The capital will likely allow even more projects to be dusted off, giving the central bank’s funds more areas of utilization.

Photo: Lajos Soós / MTI

The National Bank of Hungary’s stimulus campaign hasn’t fully generated the desired results thus far, but even the finance industry is optimistic that fine−tuning of the application criteria will bring a much−desired boost in the second half of the year.

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2 Business

Budapest Business Journal | April 25 – May 08

VOODOO ANGELS HELP STARTUPS RISE Is Budapest ‘missing’ from the world startup map? Can this city become a regional startup capital if they don’t even speak English at the post office? Dr. Antal Károlyi doubts so. An interview with one of Hungary’s leading startup angel investors on the country’s chances in the international competition. MÁTÉ NYUSZTAY

The startup hype seems to be penetrating conferences, media and even politics in Hungary these days. The election campaign was loud with the government’s promises concerning millions in funding for ‘future Prezis’, some even have visions of Budapest becoming the regional startup capital while there’s strong concern in the subject at an EU level, including the launch of the new Jeremie program. So what’s the big fuss around startup companies – is this a major paradigm shift in doing business, a result of a technological boom, or just another bubble waiting to blow in our faces? A: There is definitely something in the air. We don’t know yet exactly where this is going. The first Hungarian Jeremie investments were made around 2010, so soon we’ll see whether or not this is a ‘bubble’. But let me share a personal experience: my decision to work as a startup angel investor was almost a spontaneous one. It went just like that (snaps fingers). I didn’t jump on the startup train, sort of the opposite, the train just reached to the station where I was. I felt there is something happening, just like in the movie ‘Close Encounters of the Third Kind’, when everyone felt they must go to the mountain. I see three main reasons for the startup boom. One is definitely the speed of technological evolution. This is a time when we have democratic access to all kinds of devices, when two guys with a laptop have a chance. Secondly, the financial crisis resulted in a general disappointment in the ways we did business. We lost faith in the stability of multinational companies, which we thought were too big to fail. Those who lost their jobs thought, “Oh well then, I’ll do my own shit!” Similarly, those who have money to invest don’t dare to put it in banks or state bonds anymore; the stakes are too high. Take Greece: the state bonds went straight down the sewers. So why invest in bonds? The upside is limited, but the downside is not: you can lose everything. In a startup investment it’s quite the opposite: the upside is unlimited. State funding and

the European instruments, like Jeremie are also important boosters. In Hungary, there are several excited politicians, governmental institutions as well, which is cool, because the most successful startups always had state assistance behind them. The Hungarian government is on the right track, I support their idea of rather ‘greasing the system’, creating infrastructure instead of direct funding. The other booster was the appearance of venture capital in Hungary.

Do you think it’s realistic for Hungary to become the startup capital of Central and Eastern Europe by 2020? That’s what Minister of State for National Economy Zoltán Cséfalvay said at a venture capital conference. A: It’s not very likely, though not impossible. A lot depends on how we tackle general problems in the country, which are unrelated to the startup community. Like the lack of good English speakers. I know it’s trivial sounding, but it really doesn’t help if an American colleague can’t even go to a post office in Budapest because nobody understands

Antal Károlyi is co−founder and partner at Traction Tribe, a tech, dot−com and healthcare startup accelerator located in both Budapest, Hungary and Los Angeles, California – that aims to take potentially global European startups and soft−land them on the U.S. market. He has been a seed investor since 2010. His interests as a business angel include a high− end loudspeaker maker, a travel guide application for smartphones, and a self− publishing site. Previously he worked for investment banks in Frankfurt and London as a derivatives trader. Károlyi holds a PhD in statistical physics. He firmly believes that the Hungarian startup community has great potential, and he plays an active role in building it.

him. Also we need to create a favorable economical environment for startups, these vulnerable, week little embryos. I mean supportive taxes, low bureaucracy, effective financial instruments and so on. And this is way beyond guys like Mr. Cséfalvay. We need the foreign expertise and corporate culture. Budapest has a geological advantage, plus the city has developed a lot in the past years, so I’m pretty sure we have great potential, but it is not up to the startups whether we can benefit from this potential.

Despite these disadvantages, Hungarian startups like Prezi and Ustream still made it. Where do you see Hungary’s place in the world competition? A: Hard to tell. Startups, as you know, offer solutions to existing problems, of which we have a vide variety. American startups typically solve the problems of a very narrow group: the average 25−year−old, Caucasian

male, well educated, and with good living conditions. Hungary’s problems, and sociological groups are totally different. Take 5L, a Hungarian research state startup development, which limits your water usage in the shower to 5 liters. This is not something for that American who doesn’t give a damn about how much water his Jacuzzi wastes. They also see us Hungarians in California as technologically skilled, strong in IT, but weak in sales. This is a returning pattern, and it’s a problem in the whole region. Also, the typical American startups have more fluff; we are kind of deeper, technologically speaking.

In a speech at the Budapest private banking summit, you said the decision of investing in certain startups is just a question of trust. “You don’t need to understand – you won’t, because most of these companies deal with new technology. You just need to trust the guy that at least he knows what he’s doing”. How can you say

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10 2Business

Budapest Business Journal | April 25 – May 08

someone else’s ideas, so it’s their world, we should respect that. It’s not healthy to create a hierarchical relationship with your entrepreneur, the best practices which we start to see now prove that. On the contrary, the cooperation of several angels, forming investor circles, where each brings in their own expertise and connections, this is the way to success.

TYPICALLY STARTUPS TEND TO THINK THE INVESTOR IS AN ASSHOLE, AND INVESTORS TO Q THINK THERE ARE NO REALLY GOOD STARTUPS that? Nobody knew plasma or 3D would win the race. A: It’s one part voodoo, one part experience. We hope, and we do everything we can to give the ‘startuppers’ a chance. Most startups don’t invent something radically new; they rather combine existing methods and technologies. This is why experience, expertise, matters so much. The startup community is still young; it could take another decade or so to gather the needed experience, with exits and falls behind us. But very few Hungarian

startups exited as yet. As for the voodoo component, investors and startups also hope to find that gem, but it’s usually not about big ideas or miracles. It’s the methods, the strategies you apply that count. It’s very hard to see if it’s going to be plasma or something else. What you can do is to create an environment for the seeds, let them grow, inspire their work, as opposed to controlling and forcing them. If you can do this, and you have 15−20 teams and they are not complete idiots, someone will rise up. Which doesn’t mean we shoot blindfolded, but

it’s blind luck whether or not you put your hands on the future’s technology.

Force and control is exactly what some angels fall back on to ensure they don’t fall, including enforcing managerial rights in their entrepreneurs’ companies. A: The essence of angel investments is in the close relationship with the founders. The more experience you have, the more right you might feel to have control. But if you’re so smart, why not start your own stuff? Angels help in implementing

Some angels see the startups’ place in the ecosystem in either generating competition between the bigger players, or creating something really new. Hungarian startups are capable of neither, which is why they might fail, together with their angels. A: It’s a hard question. Typically startups tend to think the investor is an asshole, and investors to think there are no really good startups. To quote my business partner Dr. Péter Kádas, Hungarian venture capital investors often push startups into such contract obligations that surely lead to a catastrophe. This is surely something the Hungarian investment market has to work on. If the contract terms are not transparent, what are we talking about? Another question we have to raise is why there are no Hungarian universities among the world’s top 300? I see a great danger in building on missing fundamentals; this can definitely lead the balloon to burst. Or rather we won’t have a lung big enough to blow it up in the first place.

BUSINESS INNOVATION MASTER AND PUPIL What can large ﬁrms and startups learn from each other? Conference location and time: Gerbeaud House (1051 Budapest, Vörösmarty tér 7.), May 6, 2014 2pm-6pm Moderator Veronika PISTYUR – CEO, Bridge Budapest What can the corporate world learn from startups? Hungarian enterprises in the global market Speakers Levente BALOGH – owner/CEO, Szentkirályi Ásványvíz Péter BALOGH – CEO, NNG Kft. Multinational enterprises in the Hungarian market Speakers Dávid SZABÓ – startup expert, Microsoft Magyarország Szabolcs SZELEI – marketing director, Google Magyarország

What can startups learn from multinational enterprises? When does the time for change come? How to give professional and competitive formal outlines for soaring, innovative ideas? Speakers Anton KOVACH – CEO, ShiwaForce Katalin IVÁNKA – owner, IVANKA Beton Design Zakariás TIPTON – Tipton Napsugár VON BITTERA – designer, Napsugar von Bittera Zoltán SZARVASI – owner/CEO, Digital Apes The recipe for change management: Intellectual and venture capital Speakers Levente ZSEMBERY – CEO, BNV Equity Péter KOVÁCS – Co-Founder, Chief Social Evangelist – IseeQ

Language: Hungarian Participation fee: HUF 19,900+VAT/person (includes entry for presentations and reception) 20% DISCOUNT FOR BBJ / HUNGARY A.M. SUBSCRIBERS - HUF 15,900+VAT/person REGISTER NOW

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Special Report 3 RECRUITMENT AND TEMPORARY EMPLOYMENT

FLEXIBILITY RULES Thanks to its flexible nature, the idea of temporary staffing appeals to a growing number of firms. Supported by the new labor law regulations, companies have more freedom to adapt to economic cycles. HR providers are happy to offer staff−related solutions for any time span. The gloom of the crisis has long since faded for the HR industry. Not on temporary contracts, and the demand for such services has that the landscape has remained unaltered as a result of it. As senior extended to companies that would have not previously considered it. managers of the leading firms report, the entire sector has had to New labor law regulations have contributed to creating a more adapt to a great extent. Quality−bound expectations went up on the flexible structure overall as well. Workers are freer to hop between part of customers. Competition grew fierce. And new rules were set jobs and employers have more liberty to react to short−term economic by labor legislation.

demand. Temporary staffing has never had a brighter future, and

At the end of the day, those ready to show the most flexibility have permanent placement services are booming thanks to positive emerged stronger than before. More workers are ready to be employed growth figures. LHT

SÁNDOR BAJA

general manager, Randstad Hungary Kft

In the last couple of years manpower demand has not grown in the private sector, which means the domestic market is limited. In order to counterbalance that, we have intensified our export activities. Beside our involvement in the field of permanent placement for Hungarian employees, we assume a supportive role in international placement processes in our recently established service center. Due to the great performance of the automotive industry we have a lot more deals on the domestic market. The service centers are continuously expanding which keeps us busy. Yet, it is worth noting that the international competition has grown stronger: fewer new large centers are being set up with many instead picking Polish, Slovak, and Czech cities. The traditionally solid sectors such as the pharmaceutical, chemical, and IT industries have maintained their pace, and our FMCG inquiries are gaining momentum again. Our permanent placement branch was strengthened by software development through improving the work of our colleagues from the inside, whereas HR services such as RPO, outplacement and employer branding added to our performance from the outside. In the relationship with our partners, a major change is that the supply departments play an ever−bigger role since they are involved in negotiating financial terms and behave as strategic partners as well. The HR departments expect ever more complex services; in other cases, more specialization is sought for. We are following the changing needs with Hungary’s biggest permanent placement team in a flexible manner.

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Budapest Business Journal | April 25 – May 08

RÓBERT CSÁKVÁRI managing director, Work Force Kft Downsizing started right after the crisis broke. But then the hands of HR departments were tied: since there was a ban on hiring, they couldn’t employ new staff even when they were needed. That pushed them towards temporary staffing yet again. Those firms, such as Work Force Kft, that had a flexible approach towards market changes, in particular growing price competition and financing costs, managed to overcome this period. Now we are optimistic; the demand for temporary staffing is on the rise not only for blue−collar workers, but also for office personnel. As far as the relationship with customers is concerned, demand for quality has soared. The general sentiment is that companies relying on temporary staffing are handling workers employed under a temporary scheme like their own staff, so they are provided with the same benefits as ordinary staff members. Our relationship has also grown stronger, especially due to these quality−bound expectations. We have clients that are assisted and supported by us in the course of their HR work on a daily basis. There have been many legal changes in the last couple of years. The principle of equivalence deserves to be mentioned here as that concerns temporary staffing companies. The principle in question applies to workers under a temporary staffing scheme from day 184. That is the date from which the same benefits are due for them as those employed as the company’s permanent staff. This change has many positive effects, at a nearly same level of expenditure. As a result of such changes, those temporary staffing companies that employ illegally – or not fully legally – may have problems after a while.

OTTÓ VÉG managing director, Adecco Kft Growth was dynamic on the Hungarian market of permanent placements and temporary staffing up till 2007. The crisis was a big slap in the face for everybody, since companies first got rid of those first employed under a temporary staffing scheme. By 2011, the situation was consolidated more or less, and ever since there have been ups and downs with no large changes of either positive or negative effects. The cost structure of companies is very strict nowadays, so there are ever more situations when it is really worth going for temporary staffing. In the relationship with our clients, the effectiveness of cooperation has gained on importance. Therefore, Adecco provides its customers at certain intervals with a comprehensive report, put together on the basis of KPIs, on the experience accumulated. The monitoring of temporary staffing processes is also a priority, not only the quality and effectiveness of selection. Certain factors are regularly assessed such as the accuracy of specific employment proceedings, payroll, and accounting. Our partners seem to pay ever more attention to the optimization of their internal processes and monitoring the quality of temporary staffing services is closely connected to this. By assessing the entirety of the service, Adecco pays particular attention to help coordinate the daily processes that are closely related to temporary staffing.

ATTILA DOBÁR managing partner, JOB Személyzeti Tanácsadó Kft The market of permanent placement and temporary staffing has been strongly affected by the crisis. There were two ways to react to the impact of record harsh circumstances, the shrinking room for maneuver and fierce competition: certain providers moved towards lower prices, others, however, have decided to put quality to the fore. Job Kft has pursued the latter strategy. We regard temporary staffing not merely as outsourced payroll, but a complex HR service where handling employment matters, managing cafeteria systems and solving any on−the−spot problems are all part of our package. In the case of permanent placement at the mid and top management level we can see also that quality work focusing on customer needs pays off; therefore, we place affordable quality at the center of our services. Another aspect of recent developments is the importance of flexibility. We expect it from colleagues subject to temporary staffing or permanent placement as well, but this expectation binds us too. If we can’t adapt fast – and if needed learn – then we will lag behind. As to the new rules provided for in labor law, they didn’t have any major impact on the temporary staffing market. A minor change concerned a shorter period of notice of 15 days for the party launching the temporary staffing, and the introduction of severance payment was a novelty.

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Budapest Business Journal | April 25 – May 08

EXPERT OPINION

managing director, Prohumán Kft The first signs of the crisis became visible in the automotive industry. The problems leaked through to other sectors from there. Workers employed under temporary staffing were hit hardest, as it was easiest to let them go. However, after a while, employers started to like temporary staffing as they all of a sudden looked at the positive side of the scheme, i.e. the flexibility it offered. This urged even those companies that would have thought it unimaginable before to use temporary staffing. Temporary staffing thus bounced back earlier and was back on its feet before the crisis had the chance to fine−tune. Prohumán capitalized on this best, and is now ranked second in the Book of Lists. Our role was very positive in this process since we can ensure the continuity of people’s employment. Companies have a core staff and then look for complementary workers. We can place them exactly where they are needed most. The problem we are facing now is that it is very hard to find the right people for the right posts, especially in certain regions. We need to recruit from ever further distances, occasionally up to a 100−150 km radius, and it’s difficult to find people who wish to work under such circumstances. This makes planning tough for firms. The new Labor Law, in turn, did have a positive effect in terms of temporary staffing. Giving notice has become simpler due to a streamlined obligation to give detailed reasoning. This is a shared interest. Companies can plan better and adapt their capacity to their changing manpower demands, and employees can change positions more easily.

TAMÁS FEHÉR managing director, Trenkwalder Kft Employers have ever more specific needs when defining job descriptions, while expecting to find the right personnel ever more quickly. Lately, those HR firms that were able to continuously keep manpower at the disposal of their business partners have succeeded best. Having a network of offices is another crucial factor in terms of competitiveness. Temporary staffing is back above the 100,000 mark in Hungary and the market outlook is very positive in spite of the fact that companies still put extra emphasis on cost−effectiveness. There is also room for improvement as in Europe temporary staffing is two to three times as large as the Hungarian figures. Domestic labor law regulations further encourage atypical forms of employment. Flexible solutions lead to more jobs. Underused manpower is now luxury; but accurate workforce management plans cannot be executed efficiently without temporary staffing. We are continuously making improvements in order to keep our position as market leader in the temporary staffing segment. These include organizational and technological innovation as well as new methods of planning with customer engagement.

EMPLOYEES’ LIABILITY FOR BREACHING THEIR OBLIGATIONS The new Hungarian Labor Code stipulates a higher maximum compensation if the employee causes damage through negligence.

Kinga Hetényi Managing Partner SCHÖNHERR HETÉNYI ATTORNEYS AT LAW

ome employee obligations are specified in the new Hungarian Labor Code. For example, during employment the employee may not engage in conduct that jeopardizes the employer’s business interest. Other, more specific employee obligations may be set out in their scope of work, in the collective agreement, or in the internal rules of the company. If employees breach these obligations, they are liable for the damage caused and must compensate the employer.

According to the current court practice, when employees breach their essential professional rules, it is often considered gross negligence. In general, employees who drive a company car cause damage by gross negligence (not intentionally) if they break traffic rules and the company car is damaged. In this case, the employee usually recognizes the risk but hopes the accident will not happen.

EXEMPTIONS FROM LIABILITY The employee is not liable if (i) the damage was unforeseeable at the time of the injury, (ii) the damage was caused by the employer, or (iii) the employer does not mitigate the damage. Damage is unforeseeable if a careful person thinking reasonably cannot foresee the damage. In this case, the CHANGES TO NON-EXECUTIVE information obligation of the employer EMPLOYEE LIABILITY The old Hungarian Labor Code differentiated is very important because it influences only between damage caused (i) by what is foreseeable by the employee. For negligence or (ii) intentionally. If employees example it may happen that the employee caused damage through negligence, they who is driving the company car runs a red were liable only up to one-half of their average light and hits another car. In this case, the monthly earnings. Alternatively, a maximum employer may enforce only the amount of one and a half months’ average earnings that is the consequence of the accident were charged if the employer and the – the part to repair. But if the part is not in employee agreed such in the employment stock and must be ordered, the employer contract. Collective agreements provided a may not claim damages arising from the maximum of six months’ average earnings as fact that the car cannot be used until a limit. Even if employees caused damage by repaired because this was unforeseeable gross negligence, their liability was limited in for the employee. If the employer causes damage, the the same way as if they had acted with slight negligence. Employees were liable for the employee is not liable to pay. This is applicable, for example, if the employer entire amount if the damage was intentional. The new Hungarian Labor Code gives wrong instruction to the employee. Should the employer not comply with differentiates between damage caused (i) by slight negligence, (ii) by gross negligence, or the obligation to mitigate damages, the (iii) intentionally. Slight negligence is when the employee is likewise not liable. employee does not see the consequences of his/her acts because he/she is negligent. THE EMPLOYER’S CLAIM FOR Gross negligence is when the employee COMPENSATION The employer is entitled to enforce its recognizes the possible consequences of the activity but hopes that the detrimental claim with a payment notice if the claim result will not occur. Damage is intentional is not more than three times the minimum when the employee foresees and wishes salary. The minimum salary changes the detrimental consequences to happen or yearly; in 2013 it is ca. EUR 330. Thus, the employer may enforce its claim with accepts they will. Something new in the new Hungarian Labor a payment notice if it is not more than ca. Code is that with damage caused by slight EUR 980. If the claim exceeds three times the negligence, the extent of indemnification may not exceed four months of the employee’s minimum salary, the employer is entitled absence pay. Furthermore, the employee to file an action with the court. The court must pay a maximum of eight months’ then decides the claim in a court procedure. absence pay if the collective agreement so provides. Another change in the new Hungarian Labor Code is that the employee must pay all damage caused by gross negligence or intentionally. Overall, the new Hungarian Labor Code stipulates a higher maximum compensation for negligence. www.schoenherr.eu

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

CSONGOR JUHÁSZ

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Budapest Business Journal | April 25 โ May 08

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The new Civil Code of Hungary came into effect on March 15 this year. The Budapest Business Journal asked a legal expert in the field, Balázs Sanin−Tóth, in what ways the new Civil Code affects directors’ liability, and how court practices could change as a result.

PROMOTIONAL FEATURE

THERE ARE PLACES WHERE, AS IT IS COMMONLY KNOWN, BEING AN EARLY BIRD IS WORTH IT Experience, success, fame, reputation, honor… These terms are all related to being first, irrespectively of what area of life we talk about. However, while arriving first is recommended only in certain cases, when we talk about recruiting it is a must – both as a candidate and as a recruiter. It is not unusual that a top candidate with

How did the previous legal regulation look like and how did courts rely on it? A: Under our Civil Code in force before 15 March 2014 and the separate Companies Act, the directors were normally not liable for the company’s debts to its creditors. The court practice made it clear that any damage caused by a director when acting on behalf of a company was attributable to the company only. In other words, the creditors could not ‘pierce the corporate veil’ and sue the directors.

So what has changed? A: Directors were and remain liable vis−à−vis the company if they cause losses to the company by a breach of their management duties. As a notable exception to the norm that creditors could not sue the directors, the directors were and remain liable for ‘wrongful trading’. If there is an event of ‘threatening insolvency’, directors must take into account the interests of the creditors too. In practice this requirement means that from the moment a director foresaw or reasonably could have foreseen that the company would not be able to pay off its debts on their maturity, if the director continues business and as a result the company’s financial position worsens, he can be liable for all unsettled debts at the end of the insolvency proceedings. A director may escape from this liability if he or she proves that he made all generally expected measures in order to limit the creditors’ potential losses. The practical test is whether in troubled times the director continues any loss−making business.

As far as the new Civil Code is concerned, does it resemble any West European regulation in particular? A: In all established market economies it is a normal risk of business that managers take business decisions. By definition these decisions imply a certain level of risk and can potentially cause damage to the company or third party creditors. However, such risk− taking is a key element to any properly functioning market. Sound business decisions which are taken in accordance with a standard of how a commercially reasonable person would act, should not lead to personal liability.

So what size of penalties should top executives expect in Hungary? A: Under a provision of the new Civil Code there appears to be a possibility for creditors to sue the directors who caused damages when acting in the name of a company. The meaning and future application of this new rule is unclear as we speak. Respectful professors argue that the new norm is not intended to change the law and it only says that if a director causes losses in connection

with but acting beyond the scope of his competitive traits will have collected 4-5, or, mandate, the company may be jointly and in an extraordinary case, as many as 10 job severally liable for his wrongdoing. An offers by the time he/she passes those multiexample by Prof. Vékás is when a director round interviews that are ordered mainly by goes to a business meeting where he steals multinational companies. How, then, can we some assets of the counterparty. talk about recruitment and selection if it is not Others believe that the director and his HR that has this role anymore? company may be jointly and severally liable if both of them caused the damage out of contract. The broadest commentary is that The decision the candidate makes is a director may be liable for non−contractual influenced by several parameters*: damages even where the company is liable for • the image of the company that has the same amount based on contract. advertised the job; One thing appears to be certain. Lawyers will probably try and sue both the company • the possibility of professional and their directors if a creditor has any advancement in the position; problem with them. If nothing else, this • the income possibilities of the position. will work as litigation tactics. If a director is potentially also on the hook he will feel more A good atmosphere, professional developinclined to settle the dispute and pay some ment, as well as a youthful team are all major amount on behalf of the company.

What do you think top executives should do in order to minimize their losses? Will directors and officers (D&O) liability insurance become a solution? A: Insurance companies cherish the new rule for directors’ liability as a very nice business possibility for the insurers. Before March 15, 2014 Hungarian D&O insurance was a practically non−existent product, apart from a very few exceptions. It was mainly big corporates that took out such insurance; multinational companies often in the form of group insurance, typically outside of Hungary, in the country of their main operations. This is now obviously a lucrative possibility for insurers. In addition, directors should take out such insurance because insurance it designed to cover a future uncertainty and the future scope of application of the liability rule is clearly an uncertainty. As other ways of protecting directors, we also suggest that they obtain an indemnity from the appointing shareholder who guarantees to step in financially and otherwise when a creditor sues the director. Such an indemnity can be given in the company’s deed of foundation or in a separate contract. Yet another possibility that we often use is that a contract between the company and its counterparty providers for a waiver by the counterparty of its damages and other claims it may have against a director. The weakness of this waiver is that it can only work with a creditor who has a contract with the company. Non−contractual claims from third parties may not be covered in such a prior waiver. Our advice remains that directors skating on thin ice should give deliberation to the interests of creditors and should document that they acted with due care. For example, they have asked for legal or other specialist opinion and considered various options as to how to proceed. If a director acts in a fraudulent way or in bad faith, creditors will have an increased chance to catch them.

ingredients of the image of those seeking to fill a job opening. Even so, there is an essential fact that, although it is well known, gets less attention than needed. The security of a job offer is the common result of several facts, but to what extent an offer can be considered

a serious one by a candidate mainly depends on the care involved in making the offer. Care, in this sense, means the intensity of attention to the applicant, a combination of the frequency of communication and the ability to make decisions. Omitting information, communicating too rarely, keeping the candidate waiting too long for a decision indicates that the company offering the job is not really serious about the offer. In cases like this a poorer offer can be much more competitive if care is involved in how it is delivered. Therefore it is essential to be the first in recruitment and selection if you want to make a definite offer for those who are the best, if you consider it important to work with the best on the labor market. The main priority of TESK is to provide the best candidates for our clients. For this, TESK is now presenting its speed bonus©: we award you and your company’s promptness so that all parties can become winners in the recruitment-selection. *(Based on an internal survey made by TESK)

TESK is a Hungarian human resources company that provides result-oriented solutions. Being responsible for our partners, our objective is to provide our clients with the human resources needed for the realization of their business aims. Making our candidates more competitive on the labor market, we offer them opportunities to reach their professional as well as individual ambitions. TESK’S SPECIALTIES in recruitment and selection

in labor lending

• Engineering, Manufacturing • IT & Telecom • Accountancy & Finance • SSC, BSC • Logistics • Sales & Marketing

• Production (skilled and semi-skilled labor) • Administration • Sales • IT outsourcing

Ask our colleagues for more information: TESK Tanácsadó Kft 1132 Budapest, Váci út 18. (West Point) T (1) 279 0707 • F (1) 466 0549 • C (30) 580 9332 www.tesk.hu • mail: info@tesk.hu

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SHORTER, CHEAPER, AND MORE SPECIALIZED

ANDRÁS ZSÁMBOKI

Budapest Business Journal | April 25 – May 08

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Budapest Business Journal | April 25 – May 08

EXPERT OPINION

RETAINING AND MOTIVATING OUR GREATEST ASSETS Mária Grócz HR MANAGER CEE & RUSSIA, BT GLOBAL SERVICES The development of the shared service sector plays an increasingly important role in the growth of Hungary’s economy. Currently there are more than 90 SSCs in Hungary offering employment opportunities for skilled, multiple language-speaking candidates.

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Our company, British Telecom’s European regional operation center (BT ROC) based in Budapest and Debrecen, has been present in the Hungarian SSC market since 2007. Today it employs nearly 1,000 qualified, multilingual professionals, and it is the strategic service center of BT for Europe. In the last seven years it has become one of the biggest and most complex business support centers in Hungary, serving BT affiliates, internal business partners and more than 3,000 customers across Europe. During the past few years we have hired hundreds of new colleagues. Based on our recruitment experiences job seekers – especially members of generation Y – are attracted to big international companies because they identify them with prestigious brand names, stability, opportunity for career, training and personal development, superb work environment, an international community and good compensation packages. The average age of ROC employees is 28; many are members of the Y generation. As employees they are more self-conscious than previous generations. They tend to express more openly their expectations. Work-life balance is very important for them: they would rather work in an interesting job for less money that allows them more time out of the office or home working rather than putting in long working hours for a higher salary. They are fast movers, and will change jobs if there is no progress within the company. They desire meaningful, stimulating work from day one, and are less interested in traditional career paths that promote slowly. They prefer work that gives them an opportunity for change and growth, both personally and professionally, and will not tolerate staying in the same position, especially if it happens to be monotonous. They don’t want to be cogs in a corporate machine, but to shape and be shaped by their daily work experience. They like working with friends in a casual and fun workplace environment. We believe that employees are the greatest assets of our company, and the well-being and satisfaction of staff members is a top priority. It is a key task for us to maintain their motivation, interest and find new challenges for them. We regularly measure their satisfaction, asking for their feedback.

According to the quarterly employee satisfaction survey, 85% of BT employees are proud of working for the company and plan their long-term future with us. Our corporate culture, high-quality working environment, competitive salaries, various company events, wide range of training and benefits, and family-friendly provisions all serve the purpose of making the service center an attractive workplace for current and future employees. There is an option for distance work and flexible work schedules. We support mothers returning to work to provide day-care and support for young children during the day. Employees have private health insurance, high quality health care, and they may also choose from a number of cafeteria items. To secure convenient working conditions we have furnished the offices with ergonomic furniture; a relaxation room, and free refreshments, coffee and tea are available. A wide selection of work-specific and general training courses, e.g. language and soft skills, are available for our employees. Supported by local and global programs we identify, develop and retain talents. Our graduate program aims to prepare participants for a future business leader role. It lasts for two years and graduates rotate between business units every six months, where they delve into the details of each one. Most of our team leaders are in their late 20s or early 30s, and are promoted from within the teams. Well-performing colleagues can move forward sooner than in other, less dynamic industries. We have 14 different functions in the ROC, so we can offer career growth not only in a vertical direction, but also in other areas of professional career opportunities as a specialist of a different area. Most teams are multi-national and expand across frontiers, so besides practicing languages, employees can get a sense of various other work cultures. The telecom sector evolves fast, which gives our employees more chance to meet solutions using the very latest technologies than in a more traditional industry. We put a high emphasis on empowering our colleagues to take responsibility for improving their own area and the way they work to keep up self-motivation, which also increases work efficiency. BT ROC intends to contribute with a growing number of job opportunities so that members of the talented Hungarian workforce can find their career path here in Hungary. At BT they can meet foreign cultures and professional, global working standards within the borders of Hungary.

www.bt.com www.facebook.com/bthungary

GENERATION N Generation Y wants more freedom, ownership and involvement at work than any previous generation before. And what’s wrong with that? ZSÓFIA VÉGH

Generation Y is quite possibly the best− researched group of people in history. Studies, in particular on their working life, are plentiful. They will tell you how confident these people are, especially when it comes to their job expectations. High income, a rapidly advancing career, and a fancy−sounding company name are just as important to them as fulfilling their potential. They want varied duties, which require independence and self− sufficiency, and a modern, comfortable working environment that helps their integration. But work can never be done at the expense of fun – teamwork and solving problems together are just as essential as all of the above listed. Most (more than 60%) have no doubt about reaching the top of their career within five years at worst. And politics is their nightmare job. All this may depict them as cocky and demanding – why do these barely 30−year−olds want so much in such a short period of time? True, many of them want to run the career ladder and may be asking for more. Yet what they dare to express explicitly is nothing more than what Generation X has been striving for since starting off on their earlier, quieter career path. This new attitude requires a different method of handling. Human resource professionals now have vast experience in the way they handle this segment of the workforce. For starters, Gen− Yers need to be involved – way more than their predecessors. In return, they own the projects assigned to them more and are less likely to lose heart.

Some try and get involved more than they are entitled to, in higher−level decision process. In such cases it is up to the management how they adapt to it. Presenting their ideas on how to improve work should not be a matter of offence either. Again, this is a sign that they care and are responsible. Another feature of Generation Y is that they come across as being essentially the same, regardless of nationality. Obviously, cultural differences prevail, yet the core requirements are broadly the same everywhere. So the results of a recent study on Hungary’s Gen−Y by Coaching Team probably applies equally well to other young people in the region. The survey involved 500 people, but researchers talked to HR professionals as well. They often find this age group a hard nut to crack and, contrary to what many say, they hold that Gen−Y is actually difficult to motivate. Finding the perfect company match is the first challenge: not all firms

THE SECRET OF Multinational companies are still the most attractive employers in Hungary, with IT and telecom the most popular sector, a recent survey conducted by Aon Hewitt and AIESEC reveals. BBJ STAFF

Audi, Mercedes and Bosch were seen as the most popular employers in Hungary in 2014 in a survey by HR consultancy Aon Hewitt and AIESEC. Gauging the opinion of nearly 8,000 employees with experience ranging from little

to extensive, the survey showed that Hungarians see multinational companies as the most attractive employers in the country. Among the top ten employers, only one is Hungarian−owned. The most popular sectors are IT and telecom, followed by tourism. The first was selected by 11% of the respondents, while tourism and state administration both received 8% of the total votes. The bank and insurance sector, together with the automotive industry, takes third place with 7% each. Employees, be it new joiners or experienced careerists, do not see the construction industry or the energy sector as a tempting career path: only 3% of those queried said they would work in construction, 2% chose the oil and fuel

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Budapest Business Journal | April 25 – May 08

EXPERT OPINION

N NEXT

OUR STRONG PROFESSIONAL KNOWHOW IS OUR GREATEST ASSET

HEAD OF HR Leading Hungarian IT firm evosoft Hungary Kft is a member of Siemens AG, the largest European engineering and technology concern. In its nearly 20 years of existence, it has grown into one of the most stable employers on the IT market, and our name is now synonymous with quality work performed by experts.

welcome the openness this generation displays and expects. Integrating them into the corporate environment is the second, the study says. And the next big challenge is to retain them.

A nice paycheck alone is often not enough; Generation Y looks at the whole package. Should the F−factors (freedom, finance, feedback) be missing, they will move on.

KEY FINDINGS: • • •

• •

35% of respondents think their dream job is abroad The United States and Germany are the top dream destination for work for Gen-Y The most popular positions are: heading their own company or being employed by a multinational company 25% believe they will reach their goals in four years 60% say they will need five years to do so

F ATTRACTION trade, and a mere 1% saw potential in electric power and gas supply services. SHOULD I STAY OR SHOULD I GO? Although the number of those contemplating finding work abroad hasn’t changed significantly from last year, long−term employment outside of Hungary seems to be an increasingly attractive alternative for employees. Back in 2012, some 25% of respondents said they would leave the country for more than three years; in this year’s survey, that ratio is up to 28%. A better salary and the possibility of building a career top the list of reasons why people would leave their home country. Employees with a university or college diploma and below the age

of 29 are typically more open to such a change than those without a higher education degree. MONEY MAKES THE WORLD GO ROUND When it comes to wage demands, there are serious differences among the various sectors. Salary expectations in the IT and telecom sector are highest (net HUF 278,380), engineers and technical experts want an average of net HUF 264,523, lawyers and R&D experts expect net HUF 236,781 and HUF 233,775, respectively. Office administrators would work for a net HUF 175,075 – slightly less than construction workers, who want to see their average salary at HUF 193,486.

We play a leading role in a sector that is one of the most enticing to employees. There is a huge demand for trained professionals, as is shown by, among other things, the large number of open engineer positions on job sites. Year after year, it is a big challenge to increase our competitiveness in a knowledge-based job market environment by efficiently luring professionals to us, as well, of course, as having the goal of hanging on to them in the long-term too. Employees can choose from an increasing number of strongly branded companies with secure and stable employer backgrounds, with expectations varying a lot in regards to their appeal. With regard to the demands of the younger generation, we can see that besides financial compensation, an international working environment, the opportunity to work abroad, and the predictability of careers and promotions have grown to be the most desirable aspects, as people aim to see ahead to the step beyond the next. The use of ongoing performance reviews is also an important criterion in long-term commitment to an employer. It is important that employees receive constant feedback, support and information from managers during projects, and that they become part of decisions, and successes and failures alike. The greatest appeal of evosoft is the domain know-how that can be acquired in many fields. We are present in various fields from the development of medical software through rail and industrial automation and drive technology to the electric car market. At evosoft, our colleagues work on top-level international projects, for example we develop medical technology software which thousands of doctors in radiology, cardiology or neural science use around the world. But this is also where the bulk of the leading global industrial automation technology system is made, or the software that runs in the electric cars of one of the largest car manufacturers. Rather than classic software development methodology, we employ methods that give us a serious competitive edge in the market and lay the foundations for our industry-leading role.

We experience again and again that financial remuneration and bonuses no longer act as incentives: those who have been earning well for years but feel that their progress through the ranks of their profession has stalled, that there is no further way up, will soon become demotivated. Through our internal procedures, we offer varied work opportunities to our employees: if someone wants to familiarize themselves with new technologies or a new field, they don’t have to go to another company to do so, as we offer the option to move within the company. Our employees can choose from among more than 100 vocational training opportunities in line with their individual jobs and career paths. Our employees can attend professional training, conferences, technology seminars, soft-skill training and management skill development training. At evosoft, we strive to get involved in product development at ever-earlier stages and with ever-increasing responsibility. This is one of the reasons why we are in contact with end-users: people in the industry and at clinics, people we also actively involve in development cycles. In our work, we also place great emphasis on addressing future engineers. We are present at a number of technical higher education institutions as main sponsors, and run our own scholarship programs in Eger, Debrecen, Miskolc and Szeged. We have prepared a full-semester academic course for Dunaújváros College, and introduce the main aspects of software engineering in a special joint course at Szeged University of Sciences. We really endeavor to make evosoft well known in Hungary’s biggest universities and colleges, so that when graduates make their choice of employers, as many of them as possible will opt for high-quality engineering work at evosoft.

www.evosoft.hu

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Adrienn Benei

In our everyday work, we use: C#, ASP.NET, C++, Java, VHDL, e-language, and various databases. We develop for embedded systems as well as for traditional PCs. We develop software in a Microsoft environment, as well as under Linux/Unix. As a software development company, the know-how of our employees is our greatest asset. We believe that the personal performance and professional development of individuals provides the basis for the successful future of evosoft. It is through their intellectual capital that we have achieved the position we hold. Our goal is to manage this intellectual capital, enrich it and keep it in-house.

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20 3

Budapest Business Journal | April 25 – May 08

SHORTER, CHEAPER AND Interest in MBA degrees in Hungary has returned to its pre−crisis level: CEU and Corvinus each have the same number of students as they did in 2008. The MBA curriculum itself, however, has undergone a great degree of transformation, with the courses at CEU and Corvinus beginning to look ever more similar. ANDRÁS ZSÁMBOKI

Melinda Somogyi−Kiss decided to get a top−notch MBA two years ago. The two− year full time option was not open to her because she has a young child and could not spare the time. “I knew two years would not work,” the former head of the PR department at Exxon Mobil Hungary, the energy company’s shared service center in Budapest, told the Budapest Business Journal. Instead, last year she began a one−year business master program, an MSc in finance known as an International Master’s in Management (IMM), at CEU. Somogyi−Kiss is typical of a growing number of MBA students who prefer a one−year part−time or shorter specialized master’s degree to the traditional two−year MBA model, out of time and cost considerations. Enthusiasm for MBAs in Hungary is greater than at any time since 2008. CEU’s Business School has more than 60 graduate students in its latest year. But the two−year MBA, though still the standard type of master’s program in the business school system, is increasingly being challenged by other alternatives. CORVINUS AND CEU: THE TWO BIG RIVALS Traditionally, CEU used to be stronger in two−year, full time MBA programs. ADVERTISEMENT

CORVINUS AND CEU HAVE BEEN INCLUDED IN THE FINANCIAL TIMES’ EUROPEAN MBA LIST, AND SEVERAL INDEPENDENT ASSESSORS HAVE RANKED THE UNIVERSITIES’ COURSES HIGH ON THEIR LISTS “People usually applied to CEU with work experience ranging from two to eight years, at an average age of 30,” Mária Findrik, director of CEU’s business school told the BBJ. “Some 60% of the applicants used to be male, with Eastern European and Asian applicants forming the overwhelming majority. Hungarians used to make up only a fraction of the student community,” she added. A typical career story used to be like this: a student came from a multinational branch operating in their home country; got an MBA in Hungary; and then moved up to a middle managerial position at another multinational company. The strength of Corvinus used to be its so−called executive MBA. “Our program is targeted at those who have already arrived at a certain level of corporate management,” says Péter Móricz, managing director of Corvinus. That is why the average age of students in the executive MBA programs is about 10 years higher than that of full time students. Eighty percent of them are Hungarian, and 90% are male. “Courses are taught on weekends in blocks, or

A Budapesti Mûszaki és Gazdaságtudományi Egyetem Gazdaság- és Társadalomtudományi Kara 2014 szeptemberében is indítja üzleti mesterképzéseit.

MBA, Marketing, Mûszaki menedzser, Pénzügy, Számvitel, valamint

Vezetés és szervezés mesterszakok. – Egyetemi szintû (mester) diploma két év alatt. – Átfogó üzleti és menedzsmentmûveltség specializációs lehetôségekkel. – Elektronikus és nyomtatott oktatási segédanyagok minden tantárgyhoz. – Levelezô mesterszakokon pénteki vagy szombati óralátogatási lehetôség. – Válogatott oktatói gárdával, magas szintû kiszolgálással várjuk hallgatóinkat! További információ: BME, Gazdaság- és Társadalomtudományi Kar, Üzleti Tudományok Intézete 1117 Budapest, Magyar Tudósok Körútja 2. Q épület Telefon: (1) 463-2020, (20) 463-2020 Telefax: (1) 463-1740

www.mesterek.bme.hu

WWW.BBJ.HU

Budapest Business Journal | April 25 â&#x20AC;&#x201C; May 08

D MORE SPECIALIZED RANKING OF MBA PROGRAMS IN CENTRAL AND EASTERN EUROPE 2012-2013 1. Graduate School of Management, St Petersburg (65)

2. Corvinus School of Management, Budapest (68)

3. University of Technology, Warsaw (69)

4. SGH, Warsaw

5. Institute of Business Studies, Moscow

years Corvinus has managed to achieve a breakthrough in that field. The traditional strength of Corvinus lies in its masters program being adapted to Hungarian conditions: many of the courses, for example, rely on Hungarian business examples. CEU has recently managed to follow that example, experts say, and its masterâ&#x20AC;&#x2122;s studies are now more tailored to studentsâ&#x20AC;&#x2122; personal needs than they were. â&#x20AC;&#x153;Our students get iPads of their own for their tuition fees, and every student receives his or her tuition material on that iPad,â&#x20AC;? Findrik says. Professors of both business schools think, however, that Hungarian companies do not appreciate the knowledge represented by MBA degrees. â&#x20AC;&#x153;Potential applicants are worried about losing their jobs. All they know for sure is that twoâ&#x2C6;&#x2019;year full time study brings a rift in their careers, which will not be compensated for by the general development in their management skills,â&#x20AC;? a source told the BBJ. â&#x20AC;&#x153;This is why the number of oneâ&#x2C6;&#x2019; year specialized programs is on the rise in both institutions. These specialized programs offer MBAs in certain fields such as accounting or finance.â&#x20AC;?

KEEPING SCORE The ranking of Hungarian programs used to be hard to compare internationally. Previously, CEUâ&#x20AC;&#x2122;s business school was the only one boasting an AMBA accreditation. But even that program was not scored on international top lists run by the likes of Bloomberg, Business Week or the Economist. The situation, however, has changed since then. The executive MBA program at Corvinus University has received an EPAS accreditation, the first such in Hungary. Both Corvinus and CEU have been included in the Financial Timesâ&#x20AC;&#x2122; European MBA list, and several independent assessors have ranked the universitiesâ&#x20AC;&#x2122; courses high on their lists. The QS Global 200 Business School Report 2012 ranked CEU 13th in Europe, and the assessors of the European CEO Global Business Education Award picked CEU as the most innovative business school of the year. As far as the fullâ&#x2C6;&#x2019;time MBA program of Corvinus is concerned, in 2013 Bestmasters.com ranked it higher than the programs of CEU and several famous East European universities such as Kozminski in Warsaw and Lomonosov in Moscow.

6. BMI, Vilnius

Â&#x2014; Â&#x2014; Č&#x201A;

7. University of Economics, Prague (66)

HA MEGOLDĂ S KELL: WORK FORCE!

8. CEU, Budapest

9. Kozminski, Warsaw (25)

10. IEDC, Bled

Source: Bestâ&#x2C6;&#x2019;masters.com, FT (The Financial Timesâ&#x20AC;&#x2122; European ranking is in parentheses)

in soâ&#x2C6;&#x2019;called modules, since students work as company executives during the week,â&#x20AC;? he explained. Over the past two years, however, CEU and Corvinus have each made their presence felt in the otherâ&#x20AC;&#x2122;s traditional territory. CEU has strengthened its executive MBA program, while Corvinus has significantly developed its fullâ&#x2C6;&#x2019;time MBA profile. â&#x20AC;&#x153;CEUâ&#x20AC;&#x2122;s scholarship system is still more extensive. Corvinus, however, has managed to

increase the number of those students who pay tuition fees in full,â&#x20AC;? an expert who asked not to be identified told the BBJ. â&#x20AC;&#x153;CEU professors pursue an active recruitment policy in order to convince multinational companies operating in Hungary to send their middleâ&#x2C6;&#x2019;level executives to CEU for advanced study,â&#x20AC;? the expert added. CEU has been traditionally strong in giving students written as well as oral proficiency in business English. Market experts agree that in recent

Â&#x2014;Č&#x2019; Â&#x2022; Â&#x2022; Y Â&#x2014;Č&#x2019; Â&#x2022; u Y 9 Â&#x2019; 9

A Work Force 10 ĂŠves tapasztalatĂĄval hatĂŠkony, ĂŠs 0,(/Ä&#x2021;1Ĺś *"$,)!Ă§01 (ÄŁ+Ă§) *2+( "/Ĺ&#x2C6;Č&#x2019;-/, )Ä&#x2021;*Ă§&/ Ç˝ "* 07Ă§*ÄŁ1Çž (&1 ("/"0Çž *& 0"$ÄŁ1Ĺ˛+( *"$1 )Ă§)+&Č&#x201A; WWW.WORKFORCE.HU - TELEFON: +36 1 354 3434 - FAX: +36 1 354 3436

WWW.BBJ.HU

22 3

Budapest Business Journal | April 25 – May 08

Temp agencies Agencies YEAR ESTABLISHED NO. OF OFFICES IN HUNGARY WORLDWIDE

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

1995 24 300

Tamás Szabó (10) Trenkwalder International AG (90)

Tamás Fehér $WWLOD *\ŃU\ György Palásti G.

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

Profólió Menedzsment Kft. (100) –

Béla Ignácz, Csongor Juhász, Sándor Zakor Róbert Kiss –

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

– Adecco SA (100)

Ottó Vég $QLNy 7|UŃFVLN –

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

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2013 (%)

CLERICAL WORK

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2013 (%) BLUE-COLLAR

PERMANENT

BREAKDOWN OF PLACEMENT DURATION IN 2013 (%) TEMPORARY

TOTAL NUMBER OF TEPORARY WORKFORCE IN 2013

TOTAL NET REVENUE (HUF MLN) IN 2013

TOTAL NET REVENUE FROM TEMPORARY PLACEMENT IN 2013 (HUF MLN)

HOURS BILLED IN 2013

COMPANY WEBSITE

AVERAGE STATISTICAL HEADCOUNT IN 2013 NO. OF FULL-TIME EMPLOYEES ON APR. 1, 2014

RANK

Ranked by average statistical headcount in 2013

TRENKWALDER KFT www.trenkwalder.hu 7,592 148

10,043,107

23,714

23,868

6,800

–

PROHUMÁN 2004 www.prohuman.hu 2

3,052 108

5,146,820

8,614

8,819

2004 14 14

1991 10 5,100

ADECCO KFT www.adecco.hu 3

2,143 70

3,552,976

7,667

7,850

3,260

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BREAKDOWN OF PLACEMENT DURATION IN 2013 (%)

BREAKDOWN BY TYPE OF WORK IN 2013 (%)

TEMPORARY

BLUE-COLLAR

TOTAL NUMBER OF TEPORARY WORKFORCE IN 2013

1,630 50

3,667,097

4,198

4,264

1,850

–

2004 11 11

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Géza Homonnay Balázs Címer –

1114 Budapest, Bartók Béla út 15/D (1) 372-0692 (1) 372-0693 recepcio@gamax.hu

Róbert Csákvári (100) –

Róbert Csákvári – –

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

Videoton Holding Zrt (100) –

Fatime Touré, Attila Molnár Anikó Bánhidi Ilona Kovács

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

(100) –

Viktor Bokor =VROW łU\ Katica Szieben

1134 Budapest, Róbert Károly körút 82–84. (1) 888-9200 (1) 888-9206 ceginfo@ workwayclub.hu

8272 Óbudavár, )Ń XWFD (88) 400-453 (88) 400-453 veszprem@ manatwork.hu

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

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

100

TECHNICAL

–

FINANCE

3,328

CLERICAL WORK

11,070

WHITE-COLLAR

5,144

PERMANENT

Grosvenor Kft (46.50), Gábor Horváth (11.50), Márton Gáll (17.50), Csaba Sándor (11.50), Péter Surján (13) –

TOTAL NET REVENUE (HUF MLN) IN 2013

1,867 122

1990 1 1

TOTAL NET REVENUE FROM TEMPORARY PLACEMENT IN 2013 (HUF MLN)

YEAR ESTABLISHED NO. OF OFFICES IN HUNGARY WORLDWIDE

www.gamax.hu

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2013 (%)

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

HOURS BILLED IN 2013

GAMAX IT AND TEMP AGENCY KFT

AVERAGE STATISTICAL HEADCOUNT IN 2013 NO. OF FULL-TIME EMPLOYEES ON APR. 1, 2014

RANK

COMPANY WEBSITE

Budapest Business Journal | April 25 – May 08

WORK FORCE SZEMÉLYZETI TANÁCSADÓ ÉS SZOLGÁLTATÓ KFT www.workforce.hu 5

PANNONJOB HUMÁN SZOLGÁLTATÓ ÉS TANÁCSADÓ KFT

1,530 90

3,522,696

5,128

5,430

3,052

–

www.pannonjob.hu

1993 7

WORK WAY CLUB KFT www.workwayclub.hu 1,358 64

2,814,871

2,583

–

2009 2 2

Volano Kft (100) –

Csaba Ottó Orsolya Horvai Módné Attila Gazsi

Zoltán Tóth (80), Péter Berta (20) –

Péter Berta – –

MAN AT WORK KFT www.manatwork.hu

1,299 4

2,712,000

4,089

4,130

3,052

1998 7 7

2,298,460

3,248

3,421

2,688

–

1990 4 4

WHC KFT www.whc.hu 9

927

All HR issues fit into place with us! One of Hungary’s leading HR service providers covering the whole country with local presence and experties.

www.prohuman.hu

WWW.BBJ.HU

24 3

1,549,086

2,683

2,862

–

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

–

2004 1 3,000 (approx.)

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

Anikó Jónás Mariann H. Tóth Szilvia Varga

1062 Budapest, Aradi utca 8–10. (1) 301-7800 (1) 301-7880 info@kellyservices.hu

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

Imre Papp Erika Dékány –

4024 Debrecen, Batthyány utca 12/1. (52) 316-242 (52) 530-965 debrecen@hsakft.hu

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

TECHNICAL

FINANCE

CLERICAL WORK

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2013 (%) BLUE-COLLAR

PERMANENT

BREAKDOWN OF PLACEMENT DURATION IN 2013 (%) TEMPORARY

TOTAL NUMBER OF TEPORARY WORKFORCE IN 2013 3,087

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2013 (%)

YEAR ESTABLISHED NO. OF OFFICES IN HUNGARY WORLDWIDE

www.kellyservices.hu

807 48

TOTAL NET REVENUE (HUF MLN) IN 2013

KELLY SERVICES HUNGARY KFT

TOTAL NET REVENUE FROM TEMPORARY PLACEMENT IN 2013 (HUF MLN)

COMPANY WEBSITE

HOURS BILLED IN 2013

RANK

AVERAGE STATISTICAL HEADCOUNT IN 2013 NO. OF FULL-TIME EMPLOYEES ON APR. 1, 2014

Budapest Business Journal | April 25 – May 08

HSA KFT www.hsakft.hu 11

739 43

1,557,462

1,753

1,964

2,554

–

2000 8 9

625 45

1,305,000

2,258

2,320

2,210

–

1993 16 16

(100) –

Tibor Urbán – –

1075 Budapest, Holló utca 2. (1) 877-0900 (1) 877-0910 info@humancentrum.hu

–

2004 14 15

Grosvenor Kft. (96), » (4) –

Géza Homonnay, Arnold Bozi, László Várdai – László Várdai

1114 Budapest, Bartók Béla út 15/D (1) 279-0624 (1) 279-0624 marketing@ pannonwork.hu

HUMÁN CENTRUM KFT www.humancentrum.hu

PANNONWORK ZRT www.pannonwork.hu 622 49

1,476

1,800

2,317

–

100

–

'2/2*,'ł .)7 www.dologido.hu 602 55

14 munk aerő köz vetítő

1,227,222

1,566

1,693

1,761

–

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

Individuals (84.93) Starjobs Ltd. (10), Enersense Oy (5.07)

Péter Megyeri *\XOD 6HUIŃ]Ń Zoltán Kott

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

– Grafton Europe Holding Ltd. (100)

Dóra Pintér Norbert Fekete Zsuzsanna Dávid

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

kölcsönző

STARJOBS MAGYARORSZÁG HUMÁNSZOLGÁLTATÓ KFT www.starjobs.hu 15

GRAFTON RECRUITMENT KFT www.grafton.hu

7542 Kisbajom, Kossuth Lajos utca 111. (82) 512-112 (82) 312-570 info@dologido.hu

2001 12 12

371 30

264,256

485

503

480

–

2001 5 15

301 47

483,700

1,033

1,538[1]

1,034

–

1996 2 60

WWW.BBJ.HU

246 1

452,600

801

596

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2012 4 4

Roland Varga (60), 3pWHU 7Ĺ&#x192;NpV

â&#x20AC;&#x201C;

3pWHU 7Ĺ&#x192;NpV â&#x20AC;&#x201C; â&#x20AC;&#x201C;

8272 Ă&#x201C;budavĂĄr, )Ĺ&#x192; XWFD (87) 655-284 (87) 655-284 info@szemelyzet.hu

51.3

2004 2 4587

â&#x20AC;&#x201C; (100)

SĂĄndor Baja LĂvia TĂłth 3pWHU 9pJVĹ&#x192;

1024 Budapest, /|YĹ&#x192;Ki] XWFD (1) 411-2090 (1) 411-2091 info@randstad.hu

Floridita SzolgĂĄltatĂł ĂŠs TanĂĄcsadĂł Kft (50), Milagroso Gerifalte SzolgĂĄltatĂł ĂŠs TanĂĄcsadĂł Kft (50) â&#x20AC;&#x201C;

Tibor TĂłth PĂŠter Vida DĂĄniel Fatuska

2724 Ă&#x161;jlengyel, Ady Endre utca 11. (29) 385-085 (82) 423-104 info@munka-ero.hu

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

TECHNICAL

FINANCE

CLERICAL WORK

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK IN 2013 (%) BLUE-COLLAR

PERMANENT

BREAKDOWN OF PLACEMENT DURATION IN 2013 (%) TEMPORARY

TOTAL NUMBER OF TEPORARY WORKFORCE IN 2013

TOTAL NET REVENUE (HUF MLN) IN 2013

TOTAL NET REVENUE FROM TEMPORARY PLACEMENT IN 2013 (HUF MLN) 800

BREAKDOWN OF TEMPS SUPPLIED BY SECTOR IN 2013 (%)

YEAR ESTABLISHED NO. OF OFFICES IN HUNGARY WORLDWIDE

SZEMĂ&#x2030;LYZET .g/&6g1=Ĺ&#x201A; e6 .g=9(7Ă&#x152;7Ĺ&#x201A; .)7

HOURS BILLED IN 2013

AVERAGE STATISTICAL HEADCOUNT IN 2013 NO. OF FULL-TIME EMPLOYEES ON APR. 1, 2014

RANK 17

COMPANY WEBSITE

www.szemelyzet.hu

RANDSTAD HUNGARY KFT 18

223 104

www.randstad.hu

305,386

670

1,567

425

94.35

5.65

53.41 46.59 31.53 12.70

0.70

1.18

1.65

0.94

â&#x20AC;&#x201C;

081.$ (5Ĺ&#x201A; .g/&6g1=Ĺ&#x201A; e6 .g=9(7Ă&#x152;7Ĺ&#x201A; .)7 19

www.munka-ero.hu

JOB SZEMĂ&#x2030;LYZETI TANĂ CSADĂ&#x201C; KFT www.jobgroup.hu

Budapest Business Journal | April 25 â&#x20AC;&#x201C; May 08

218 27

359,476

403

421

1,282

â&#x20AC;&#x201C;

2005 21 21

185.60 21

234,880

852

1,003

311

â&#x20AC;&#x201C;

100

â&#x20AC;&#x201C;

1992 1 1

LĂĄszlĂł Hadi (53.90), Botond CsordĂĄs (30), Attila DobĂĄr (16.10) â&#x20AC;&#x201C;

Attila DobĂĄr GyĂśrgy Thury â&#x20AC;&#x201C;

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

PĂŠter TokĂĄr (97), TamĂĄs TokĂĄr (3) â&#x20AC;&#x201C;

PĂŠter TokĂĄr RenĂĄta HorvĂĄth Ferenc KeresztĂşri, Ă&#x2030;va Bajor

1132 Budapest, VĂĄci Ăşt 18. (1) 279-0707 (1) 466-0549 recepcio@tesk.hu

TESK TANĂ CSADĂ&#x201C; KFT www.tesk.hu 85 20

156,061

228

408

197

â&#x20AC;&#x201C;

2002 1 1

Âť

645[2]

Âť

â&#x20AC;&#x201C;

100

â&#x20AC;&#x201C;

2007 1 239

â&#x20AC;&#x201C; Hays Plc. (100)

Tammy Nagy-Stellini Peter Jerkovich Judit Ă&#x153;veges

1054 Budapest, SzabadsĂĄg tĂŠr 7. (1) 501-2400 (1) 501-2402 hungary@hays.hu

Âť

2001 19 19

Individuals (100) â&#x20AC;&#x201C;

ZoltĂĄn MĂĄrkus â&#x20AC;&#x201C; Marianna Baksy

1118 Budapest, (OĹ&#x192;SDWDN XWFD (1) 248-2010 (1) 248-2016 info@ humaniahrsgroup.hu

Âť

1994 2 2

Simple Deal Kft (30), J-Tools Kft (55) Norval Kennedy Sinclair (15)

NoĂŠmi Csaposs ZsoldisnĂŠ Zsuzsanna NĂŠmeth â&#x20AC;&#x201C;

1016 Budapest, Hegyalja Ăşt 22. (1) 453-2000 (1) 453-2004 RIĂ&#x20AC; FH#VHOHFW KX

HAYS HUNGARY KFT www.hays.hu

Âť

HUMĂ NIA HRS NR GROUP ZRT www.humaniahrsgroup.hu

SELECT +80Ă&#x2030;1(5Ĺ&#x201A;)255Ă&#x2030;6 NR KFT

Âť Âť

Âť 5

Âť

3,100

Âť

www.select.hu

Âť

NOTES: (1) Data of business year March 1 2014-March 31 2014. (2) Data for business period 1 July 2012 - 30 June 2013 (audited)

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

7KLV OLVW ZDV FRPSLOHG IURP UHVSRQVHV WR TXHVWLRQQDLUHV UHFHLYHG E\ $SULO DQG SXEOLFO\ DYDLODEOH GDWD 7R WKH EHVW RI WKH %XGDSHVW %XVLQHVV -RXUQDOÂˇV NQRZOHGJH WKH LQIRUPDWLRQ LV DFFXUDWH DV RI SUHVV WLPH 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, MadĂĄch Imre Ăşt 13â&#x20AC;&#x201C;14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

BBJ

4 Socialite WINE REVIEW

Austrian wines are very much in with the in−crowd of the world’s leading sommeliers, who simply must offer a minerally dry white Grüner Veltliner or, increasingly, an über fruity red Blaufränkisch on their wine lists. A trip around Austria’s often stunningly situated vineyards shows how these grapes capture the nuances of the vastly varied terroirs, but also reveals plenty of other exciting indigenous grapes. Meanwhile, Riesling finds its own unique world−class expression on the steep, stony terraces perched high above the mighty River Danube in the Wachau and Kremstal. ROBERT SMYTH

Grüner Veltliner, sometimes dubbed Gru− V, makes up more than a third of Austria’s 46,000 hectares under vine. It produces everything from light, refreshingly zippy, citrusy wine to rich and intense wines that vary immensely from one vineyard to another. Grüner Veltliner is also known for its peppery notes and this is especially evident in the Weinviertal,

Austria’s largest wine region. Indeed, pepper, citrus fruit and peach burst out of the glass of Pfaffl’s Weinviertal Grüner Veltliner Selection. Winemaking in Wachau and Kremstal can be a precarious and expensive operation. The water often drains straight through or off the rocky granite soils, sometimes calling for drip irrigation in drought conditions, and everything has to be done by hand. In these regions rocky soils are used for Riesling, which are among the finest in the world – fuller than the German benchmark but still with plenty of crispy acidity and bite. Grüner Veltliner is less drought resistant and favors loess and mixed soils. In the Wachau, Kremstal, and the more volcanic soils of neighboring Kamptal (home to the excellent Bründlmayer and Birgit Eichinger and also noted for its great Gru−V and Riesling), cool air coming off the Alps meets the warm air from the Pannonian plain. This enables the grapes to ripen slowly but surely, with the freshness and raciness preserved. Top names from Wachau include Knoll, F.X. Pichler, Hirtzberger, Prager and biodynamic producer Nikolaihof. Domaine Wachau is a cooperative that’s been transformed by Roman Horvath MW and brought into the top flight, while its entry level wines provide a great value introduction to the region. Leading Kremstal light Bert Salomon notes that Grüner Veltliner is subject to more linear ageing than Riesling, with the latter being in fine form in its early years, going into sleep mode around the

Organ Concerts in Saint Stephen’s Basilica of Budapest The sound of the world-famous historic organ of the Basilica will only be heard at these concerts! The Cathedral Organ Concerts and the Organ Concerts is organized in Saint Stephen’s Basilica of Budapest on Monday 28. The events of the Cathedral Organ Concerts begin at 5 p.m., with the exception of October when the concerts start at 7 p.m. Organ concerts will be organised on Fridays 11-25, at 8 p.m. In addition to the organists of the Basilica the concerts feature singers or instrumental musicians who will present the organ works and most famous church arias of Albinoni, Caccini, Bach, Mozart, Schubert, Gounod, Bizet, Rachmaninoff, Cesar Franck and Ferenc Liszt. · www.organconcert.hu

J. S. Bach: Johannes passion, Downtown City Parish Church. 2014 April 15, 7:30 p.m.

Photo: Austrian Wine

AUSTRIAN WINE UNCORKED: GRU-V AND BEYOND

three to four year mark and then bouncing back, becoming increasingly complex. A difference between Wachau and Kremstal wines is that the former can have a touch of botrytis. Meanwhile, Grüner is usually softer and rounder from the pure loess soils of Wagram. In Wagram look out for Anton Bauer, Bernhard Ott and Leth. Vienna is the only world capital to have a serious amount of land under vine within city limits and catching the sight of sprawling vineyards from a city tram is magical. The vibrant Viennese white Gemischter Satz is made from an array of different grapes planted together in the vineyard and harvested together. Rare, rich, oily and spicy whites like Neuburger, Zierfandler and Rotgipfler are experiencing a revival, with the latter two found especially in the Thermen region. Sauvignon Blanc also thrives down in the mountainous and wet terrain of Südsteiermark (southern Styria) where it zippy, green pepper character strikes a great balance between Loire zest and Kiwi herbaceous. In western Styria, indigenous grape Blauer Wildbacher also makes the distinctive Schilcher, which is crispy and oozes blackcurrants and strawberries, and has a touch of tannin from a few hours on the skins. Red Blaufrankisch hails from the Burgenland, and while it is generally more medium−bodied than full, the

best have real depth of flavor and great structure. Blaufrankisch, the same grape as Hungary’s Kékfrankos, exudes juicy red fruit, especially sour cherry, sometimes black fruit, and lively spiciness, although it varies according to the terroir. They can age very nicely thanks to the tight acid backbone, picking up earthy and tobacco flavors along the way. A dizzying array of Burgenland winemakers, including the brilliant biodynamic producer Anita und Hans Nittnaus, are set to appear at the Kékrankos Most! Grand Tasting at the Boscolo Hotel in Budapest on April 30. Blaufrankish needs time to soften and essentially because of this the legendary Dr. Zweigelt crossed it with the Pinot Noir−like St. Laurent (itself an impressive grape – see Tinof’s) in 1922 to make the super smooth Zweigelt. With its bright violet color, cherry aromas and plentiful spice, Zweigelt can be put on the market when it’s still young and blooming with youthful fruit. Neusiedlersee DAC wines are made exclusively from this grape, while the fuller−bodied Neusiedlersee Reserve category allows other grapes to be blended in. Zweigelt is also blended with Blaufrankish in the Pannobile red blend. Lake Neusiedlersee also provides ideal moist conditions for so−called “noble rot” to develop, creating botrytized sweet wines every bit in the same league as Tokaji Aszú.

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4 Socialite

Budapest Business Journal | April 25 – May 08

OUT OF THE OFFICE The BBJ gets personal WHAT IS YOUR MOST MARKED CHARACTERISTIC? Even in the greatest crisis, I know which way is out and never lose my head; I am one of those real problem− solving managers. WHAT KIND OF JOB DID YOU DREAM OF WHEN YOU WERE A CHILD? As a child, I wanted to be a fighter pilot, to rule the skies; however, just after entering fighter pilot school I changed my mind and enrolled into a university of economics in the UK. Nevertheless, I still like flying in a small plane. WHAT IS YOUR GREATEST REGRET? None.

At the steering wheel MY FIRST CAR... My first car was a BMW 3 from 1972. I liked the power but I did not like the rear wheel drive. Since then if I can always drive a 4-wheel-drive car, but it does not have to be an off-roader. I especially like the Volvo’s 4-wheeldrive solution, it gives you good traction and it is very easy to get used to it. TOP 3 THINGS TO CONSIDER ABOUT A CAR? Safety, the right status, power. A person who can afford it is making a statement about his life when he chooses a car. MOST ADMIRED FEATURES OF THE TEST CAR? It has extremely good handling in tight corners

WHAT IS YOUR GREATEST FEAR? Running out of challenges.

CV Attila Mérész has been the site director of Ardagh Aluminium Packaging Kft since 2012. He started his crisis manager career at age 26 when he worked for the Hungarian subsidiary of Pepsi Cola. Later he became chief analyst at ABN Amro. He also worked for BorsodChem and Alton Capital, and held managing director positions at Rewico Logistics and Waberer’s. In 2011, he was named managing director of Medicover Dental, which he still holds, along with the same role at ALTON Capital Management and Consultancy. He studied at the Sorbonne University in Paris where he obtained his MSc in management and marketing in 2012, then got his PhD in Business Administration and Management. He completed his MBA at Canterbury University in the UK in 2011. WHAT DO YOU CONSIDER YOUR GREATEST ACHIEVEMENT? I am very proud of my five−and−a−half year old daughter, but gaining an MSc diploma at Paris− Sorbonne University and having been elected to the board of a large chemical company before the age of 30 are also on my list.

WHAT IS THE MOST EXTRAVAGANT THING YOU’VE DONE IN YOUR LIFE? At the age of 30−something I flew to the Seychelles and had a holiday for six months after resigning from around a half−a−dozen companies’ boards. WHAT ARE THE ACTIVITIES THAT HELP YOU TO COPE WITH STRESS? Flying small aircraft, and frequently paragliding. Also dog walking with my daughter and wife can work miracles! WHAT IS YOUR MOTTO? Simplification. The highest achievement is to simplify a complicated machine or a task. WHAT WOULD YOU DO WITH €1 MILLION? Increase my own company’s market presence. I would invest into the marketing of my company’s ability in interim management. WHAT IS YOUR FAVORITE GADGET? My daughter’s iPad Mini (tablet) and my own iPhone5. Describe your dream dinner party (occasion, venue, guests, menu, music; whatever is important to you). A sunset dinner on Matira Beach, Bora Bora with my wife and daughter, and seafood served from Sweden. WHAT IS IT YOUR DREAM TO LIVE TO SEE? I dream on very rare occasions, so my dreams are for the distant future: to see my daughter grown up, being happy and gaining her PhD.

and is packed with safety features. Also, it is very pretty and stylish. GENERAL IMPRESSIONS OF THE TEST CAR? A nice car with distinguished styling, though hardcore Volvo fans might not appreciate the step away from the boxy station wagon!

The test car was a Volvo XC60.

WHAT THREE THINGS WOULD YOU TAKE WITH YOU TO A DESERTED ISLAND? Iridium (satellite phone) with a good GPS that gives exact coordinates. I would hate being alone and not being able to talk to someone. WHICH LIVING OR FICTIONAL PEOPLE DO YOU MOST DESPISE? None. WHICH LIVING OR FICTIONAL PEOPLE DO YOU MOST ADMIRE? I like Sir Harvey Jones’ achievements and I salute persistency of Mark Mobius.