Budapest Business Journal 2716

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BUSINESS JOURNAL BUDAPEST

VOL. 27. NUMBER 16

SEPTEMBER 6 – SEPTEMBER 19, 2019

SPECIAL REPORT

IT, System Integration

SPECIAL REPORT

Despite Labor Worries, Hungary Punches its ICT Weight Internationally As the Hungarian ICT sector keeps its gloves tight in defense against European competition, it is also challenged by a quickly-changing labor market that lacks skilled talent. 14 SPECIAL REPORT

The ICT sector is one of the most dynamically developing verticals, not just in Hungary, but globally. It changes how we do our business; it determines how we communicate, consume content, even do our shopping. 17

A Helping Hand Across the Ocean

SOCIALITE

Jason Momoa and Tattoo Tourism in Budapest The Aquaman and Game of Thrones star caused a stir locally when news broke that he had got his skin inked in Budapest.

David Holzer looks into the growing fad for tattoo tourism in the Hungarian capital. 21

NEWS

Forint Hits All-time low Against Euro

Photo by Lázár Todoroff/AmCham

Market Talk: A Sector of Rapid Change

N EW

S

Hungary’s Ambassador to the United States, László Szabó, hails AmCham and tells members he wants to help Hungarian businesses expand into U.S. markets, and assist local units of American multinationals make their business case when lobbying HQ for investment funds.5

The last few days have seen the forint diving to a historical low against the euro and a near-record low compared to the U.S. dollar. While this can mostly be blamed on external causes, such as a possible no-deal Brexit and recession fears in Germany, analysts say that maintaining the current dovish monetary policy will not help to drive the currency back to its earlier levels. 3

BUSINESS

New Chairman Aims to Make BBCH ‘More Relevant‘ “The days of sitting back and relaxing have gone,” says Duncan Graham, relatively new chairman of the British Chamber of Commerce in Hungary. “I think that’s why seven of the board left. Now we’re back to reality.” 6

News

2|1 BBJ

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Budapest Business Journal | September 6 – September 19, 2019

THE EDITOR SAYS

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

Eddy, Bence Gaál, David Holzer, Éva Kaszap, Christian Keszthelyi, Gary J. Morrell, Robert Smyth, Zsófia Végh.

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Just as it was for many of you, I guess, the last few days of August at times felt to me like a near endless round of back-to-school preparations, of cleaning bags, buying books and shoes, replacing leaking pens and chewed pencils. But it was also refreshingly different this year.

Our youngest child, our six year-old son, went to school for the very first time on September 2. As the summer has progressed, so has his level of excitement. It is approaching 50 years since I trod that same path (albeit one leading to a different school, in a different country, in a different life), so there is little chance of me recalling how I felt back then, but to see the joy radiating out of his smile has been infectious.

For him, there is the excitement of the unknown. He has two older sisters at school, but fortunately they do not seem to have poisoned his mind against the possibilities. To be fair to them, his siblings seem happy enough to be returning to the classroom, but they have already had their first day.

For him, this is still unchartered territory, his adventure to explore. He slate is clean, and not just wiped clean, but brand spanking new clean.

Before you get the wrong idea, let me assure you this is not all part of some extended “government goes back-toschool and must do better” metaphor. My boy’s anticipation of the moment, the way he shouted his excitement to his Papa, genuinely moved me. His other grandfather, my father who is no longer with us, was a teacher all his professional life, bar the two years’ national service he did with the army.

He would have appreciated that openness to what lies ahead.

It would be foolish to say I wish we could bring some

of that first day excitement into our business life. The key thing about having a first day at school is that you also have no experience, and having no experience is, on reflection, perhaps not the best preparation for running a company. But that enthusiasm sure as heck is worth tapping into.

However you spent your summer break, I do hope you had a chance to unwind a little, to relax and refresh, and that you come back to work ready to do what you do best and with a smile on your face.

But before we leave the field of education, spare a thought for those who shape the minds of tomorrow’s talents. We all know that Hungary faces challenges in producing enough skilled workers today, just as employers face challenges finding staff with good soft skills.

Read the local media and you will also know there are rumblings in the teaching profession. Too many young teachers quitting and experienced older hands seeking early retirement; unfilled posts leading to complaints about overburdened staff and poor moral (one union this week said teachers earn little more than the minimum wage for skilled workers).

Good teachers should be valued, and encouraged, and given a system that allows them to inspire and train and mould. They should be able to go back to work with smiles on their faces, just as much as their first day students. The future of all our businesses depends on it.

Robin Marshall Editor-in-chief

Photo: MTI/Tamás Kovács

Photo: fortepan.hu/Gyula Nagy

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

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

FACING SCHOOL WITH A SMILE

THEN & NOW

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Emese Kovács arrives at the Pannonia Általános Primary School in Kispest, on her first ever day in school on September 2. The black and white picture to the left, from the Fortepan public archive, shows the first day of the academic year at the (still functioning) ELTE Apáczai Csere János Primary and Secondary School in Budapest in 1960.

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Budapest Business Journal | September 6 – September 19, 2019

News///macroscope

Forint Hits All-time low Against Euro

The last few days have seen the forint diving to a historical low against the euro and a near-record low compared to the U.S. dollar.

While this can mostly be blamed on external causes, such as a possible no-deal Brexit and recession fears in Germany, analysts say that maintaining the current dovish monetary policy will not help to drive the currency back to its earlier levels.

ZSÓFIA CZIFRA

The Hungarian currency has been on a weak pathway over the past few weeks and reached an all-time low against the major currencies. It rose above HUF 331 to the euro and above HUF 300 against the U.S. dollar. The latter is threatening an 18-year record, but back then the dollar was performing very poorly compared to the euro, which affected the HUF/USD exchange rate; this time, the reasons in the background are numerous.

However, the macro data from the Hungarian economy does not justify such a bad forint performance.

The last time the EUR/HUF exchange rate went above 330 was at the beginning of July last year: on July 2, 2018, the euro rose to HUF 330.77. As for the American currency, one dollar was worth more than HUF 302 on the first trading day of September. The last time we saw the exchange rate near to this point was in

But where might the fall of the forint come to an end? According to ING Bank head economist Péter Virovácz, it depends on how the external situation worsens.

“The MNB’s statement, which confirmed that the central bank does not have an exchange rate target, basically gave a green light to the fall of the forint. After this, it is hard to imagine any intervention by the MNB,” Virovácz said.

The trade war is not likely to end any time soon, and a no-deal Brexit is closer than ever, which means that the forint could further depreciate in the coming weeks and reach the

335 mark,

Virovácz told portfolio.hu.

He believes that the fall of the forint will come to an end if the picture becomes clearer about Brexit, if the U.S.-China trade war eases, the European Central Bank and the Federal Reserve start an economic stimulus, and if the German government launches fiscal loosening.

“For all this, we have to wait at least a month, but in case of the trade war six months or a year,” he said, adding that the new trading corridor for the forint can be at 330-340 in the future.

2016, with a 302.5 quotation. If the forint now passes this mark, it means that it will reach an 18-year-low: in 2000, the USD/ HUF exchange rate stood at 319.4.

According to economic news portal portfolio.hu, there are several reasons for the record low forint. The U.S.-China Trade War, the recession in Germany and growing fears of a no-deal Brexit are among these factors. At the same time, the Hungarian assets have one of the highest negative real interest rates amongst emerging markets. Last but not least, the National Bank of Hungary (MNB) is not likely to raise interest rates in the near future, due to the currently tolerable inflation level, which also weakens the HUF exchange rate.

The MNB has kept the rates unchanged since May 2016, when it cut the main rate

15 basis points

to 0.9%. While the forint is exposed to global trends and the effects of a loose domestic monetary policy, Hungary’s strong economic performance and tight fiscal policy have ensured government bonds remain attractive enough to keep yields near all-time lows.

Portfolio.hu made a technical analysis based on the exchange rate chart of the past eight years, and came to the conclusion that, based on this, the weakening of the forint may be over at 332, and the dollar exchange rate corridor will be between 302-330. In spite of the recent developments, the MNB is not likely to intervene, analysts say.

Problematic

“In a floating exchange rate system, it is not unusual to see such weakening

from time to time. What makes it more problematic this time is the fact that the weakening period started from an already low exchange rate level,” Gábor Regős, head of macroeconomics at Századvég said.

He emphasized that the trade war, the political uncertainties in Italy, and the German recession all contributed to the weak performance of the Hungarian currency; however, the latest announcement from the MNB also added to the negative developments.

That statement from the central bank suggests that no further tightening can be expected in monetary policy. And if the monetary conditions remains loose, it will not make the forint more attractive to foreign investors.

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Numbers to Watch in the Coming Weeks The Central Statistical Office will publish numbers on the July performance of the Hungarian industry on September 6. This will be followed by data for the August consumer prices two days later. A second estimate of July industrial performance will be released on September 12. Only a day later, the KSH will shed light on how the construction sector performed in July.

News

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Budapest Business Journal | September 6 – September 19, 2019

Record low Vacancy on Logistics Market The Hungarian industrial market currently has a vacancy rate of around 2.4%, a historical low in a market with a stock of 2.2 million sqm. As of the summer, only around 50,000 sqm of space is vacant and no existing logistics scheme has more than 5,000 sqm of space available according to the Budapest Research Forum.

GARY J. MORRELL

Perhaps curiously, development remains low despite the low vacancy and relatively short development periods. From the demand perspective, tenants tend to be reluctant to relocate due to rising rental costs.

The largest recent transaction was a 13,000 sqm lease at Prologis Park Budapest followed by an 8,600 sqm prelease at CTPark Budapest West. In total,

21

transactions

were recorded in the second quarter with three agreements signed for more than 10,000 sqm.

Panattoni, has undertaken construction of the 102,000 sqm A2 Warsaw Park, 30% of which is prelet to Raben Logistics Polska.

As a CE comparison, total developerled industrial stock in the Czech Republic stands at more than eight million sqm with an

estimated

460,000 sqm

CTPark Belgrade West.

Prologis has also signed a 10,000 sqm letting with the Germany-based provider Fiege Logistik at Building 12 of Prologis Park Budapest-Harbor.

This brings the footprint of Fiege at the park to 40,000 sqm.

Around 29% of the current pipeline is already prelet, according to Cushman & Wakefield, and more than 200,000 sqm of space is expected to be delivered in the 2019-2020 period. Prime rents are put at EUR 4.75 per sqm per month for built-to-suit space and EUR 4.7 for existing stock, with 17.5% year-on-year rental growth.

With regard to developer reaction to low vacancy, Gábor Borbély, head of research and business development at CBRE Hungary, sees the industrial market as in a bottleneck due to rising construction and labor costs, which is leading to scheduled projects being put back.

“There is a significant bottleneck in all markets with the possible exception of office, where there is a healthy pipeline,” he commented.

Reluctant to Relocate

As mentioned above, on the demand side tenants are increasingly reluctant to relocate to new premises due in part to rising rentals. Borbély estimates the development pipeline at 188,000 sqm with a potential development period of around six months.

“Hungary is lacking the large-scale projects as are the case with Poland and Czech [Republic],” he said. In Poland, for example, the regional logistics developer

Busy Year Expected for Investors An increasing number of international investors have made acquisitions in Hungary, even as activity by domestic funds takes around a 50% market share. Although the fundamentals are positive from both a supply and demand perspective, the relatively low number of investment grade product is acting as an impediment to further development, according to research for the first half of 2019.

GARY J. MORRELL

“We expect the full year volume to be in the EUR 1.4 billion-1.5 billion range,” says Benjamin Perez-Ellischewitz, head of capital markets at JLL Hungary regarding the current investment volume.

CBRE forecasts EUR 1.3 bln-1.5 bln for the year. “The main bottleneck for further growth continues to be the shortage of tradeable product after the

unprecedented transactional activity of the past three years,” says the consultancy.

Total CEE-6 (Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia) investment volume for the first half of 2019

reached

EUR 5.5 bln,

slightly down on the previous year according to Colliers International.

A similar figure of EUR 5.47 blns has been recorded for the time period

by JLL for the CEE region (the Czech Republic, Hungary, Poland, Romania and Slovakia). Poland constituted 50% of this figure and with an extended transaction pipeline, the country could approach the record breaking volumes registered in 2018. Poland was followed by the Czech Republic although further development of the markets is hampered by high price expectations, caused in large part by the limited supply of quality product.

The breakdown of investors in the regional market for the first half saw a 25% share of Western European origin, 21% for CEE domestic investors, and Asian investors at 20%, according to JLL.

Sector of Choice

Office is the sector of choice in CEE: in Budapest Skanska has sold the 14,000 sqm Nordic Light Trio, valued at EUR 41 million, to JR AMC, a South Korean real estate investment trust.

under construction according to the Czech Industrial Research Forum (consisting of CBRE, Colliers, Cushman & Wakefield and JLL).

Low vacancy rates are common across the region: the Czech Republic has a vacancy rate of 4.4%. Poland has a stock of around 17 million sqm in addition to 2.2 million sqm under construction with five major logistics hubs across the country according to JLL. The 1.1 million sqm of new development recorded for the first half year is described as the “highest half year in the history of the market”.

The latest Hungarian figures reflect the dominance of the greater Budapest area in the local industrial market; in contrast to Poland and the Czech Republic, a functioning developer-led industrial market has not appeared outside the capital, as companies establishing light industrial facilities have tended to build their own facilities in Hungary.

Borbély sees developer-led industrial stock in the Hungarian regions as 600,000-700,000 sqm in around ten sub-markets, much of which is owneroccupied. He says a speculative market in Hungary is lacking and investors have neglected regional developments.

The state-owned NIPÜF (Nemzeti Ipari Park Üzemeltető és Fejlesztő) does have a landbank that covers most regional cities across Hungary. The company aims to deliver logistics parks in areas not currently provided for by the market.

Also in the office sector, the German closed-end fund, WarburgHIH RE has purchased the 21,500 sqm GTC White House for a reported EUR 60 mln-70 mln.

Another international investor, the South African industrial specialist JT Ross, has entered the Hungarian market with the purchase of the Aerozone Business Park from M7 Real Estate for a reported EUR 40 mln-50 mln. The complex consists of 48,000 sqm of industrial space and 15,00 sqm of office space.

Hungarian funds, typically long-term holders, represent a growing share of volume with an aggregate

44% volume

in the first half of 2019 and almost no disposals, according to JLL figures.

Hungary’s Erste RE fund, for example, has purchased the 20,000 sqm Advance Tower from Futureal for a reported EUR 45 mln55 mln.

“The remainder of 2019 should be extremely busy for market players acting on the CEE market. In a very possible scenario investment volumes may even outperform the levels seen in the record breaking 2018,” JLL concludes.

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Budapest Business Journal | September 6 – September 19, 2019

News | 5

Ambassador Keen to Help With 1st Contact and Beyond

ROBIN MARSHALL

“Whenever I come to meet AmCham, I come home,” László Szabó told guests at the Kempinski Hotel Corvinus Budapest on August 29. Before his career as a public servant, Szabó had worked for a couple of AmCham member companies, serving as vice president of Eli Lilly and CEO of Teva Hungary.

“Once I even ran for board membership, but failed,” he recalled to laughter. “Obviously there was a very high standard, but I am very impressed by what you do.” He said AmCham and the German-Hungarian Chamber of Industry and Commerce were the two “most representative” business associations in Hungary.

“Quite clearly you know your business, you know why you are here, and you know Hungary,” he told the leaders present.

Szabó said the political relationship with the United States had been completely restored, helped by a U.S. decision to reengage with Central and Eastern Europe.

Previously, America had made clear it was setting the agenda.

“We were told how to behave and lead our lives,” the ambassador complained.

“More positive things have happened in the last two years than in the last

10-15 years

in the political arena,” he said.

He gave credit for the U.S. change of heart over the region to Wes Mitchell, the foreign policy expert who was the Assistant Secretary of State for European and Eurasian Affairs from October 2017 until February 2019 and “who probably knows more about the Habsburg Empire than anyone in this room”.

Reengagement

Szabó said the new policy had been based on “how to reengage allies of the United States and how to work together to avoid global threats” from the likes of China and Russia.

Ministerial visits had followed the policy pivot, culminating in the White House meeting between President Donald Trump and Viktor Orbán.

Photo by Lázár Todoroff/AmCham

Hungary’s Ambassador to the United States thanked business leaders for being the best reference point to attract more American FDI when he spoke at a now annual American Chamber of Commerce forum.

“I believe that meeting to have overexceeded everyone’s expectations, on both sides,” the ambassador said. “The meeting lasted two times longer than planned, and there was clear chemistry between the two leaders.”

But improved relations are not just down to the ushering in of the Trump administration in Washington D.C.

in

2017;

Hungary’s impressive economic growth is also a factor.

“Prime Minister Orbán reminds us all the time that without a strong economy, you cannot have a strong voice in politics.”

Although Hungarian companies could struggle with meeting capacity demands in the United States, quality should not be an issue, the ambassador said. “I am delighted to inform you that the most expensive wine in the Trump Hotel is a Tokaj from Hungary.”

There has been a 6.8% increase in bilateral trade volume, with Hungarian exports growing by 11% in the first five months of the year. U.S. businesses have a total of USD 12.4 billion in investments “clicking and ticking” in Hungary, and employed 105,000 people in the country, the ambassador said.

More Potential

Even so, his trips around the United States left him certain “we still have a lot of unfulfilled opportunities” and that there was “incredible openness” to make further deals with Hungary.

And the embassy is doing its bit to help. A Business Promotion and Development Campus has been built in a repurposed building in the grounds of the former Hungarian Embassy on Spring of Freedom Street (Szabó described the real estate as a “really ugly building” but among the most valuable owned by the Ministry of Foreign Affairs).

The idea is to give startups looking to break into the American market the three things the ambassador said entrepreneurs had told him they needed most initially: “Accommodation, Wi-Fi and coffee”.

Through its networks the embassy could help establish “first contact”, the ambassador said, but after that the startups must have something of value to offer investors to get a second meeting.

“We can also help you make your business case if you are fighting with HQ

for an investment,” Szabó told the local heads of U.S. multinationals.

Connectivity between the States and Hungary has improved, with direct flights from Budapest to New York, Chicago and Philadelphia. “Unfortunately, Washington is still out of the picture though, as my wife never fails to bug me,” the ambassador joked.

Szabó acknowledged there were challenges ahead, not least the threat of a U.S.-China ADVERTISEMENT

trade war, and the possibility that the EU could also become a tariff target. Hungary clearly stands by free trade, the ambassador said but he believed there is a “serious desire” to find a resolution on both sides, although there is little Hungary can do, beyond hoping a solution can be found “Whenever big empires fight, small countries are never on the winning edge of the result,” the ambassador remarked dryly.

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Budapest Business Journal | September 6 – September 19, 2019

Business

New Chairman Pledges to be ‘More Relevant‘ in British Chamber Shake-up

“The days of sitting back and relaxing have gone,” says Duncan Graham, relatively new chairman of the British Chamber of Commerce in Hungary. “I think thatʼs why seven of the board left.

Now we’re back to reality.”

KESTER EDDY

Graham says that when he first visited the BCCH on his arrival in 2011, the welcome was somewhat underwhelming.

Duncan Graham Bio Born in East Lothian, Scotland, Duncan Graham was soon heading south with family to live in Aldershot, southwest of London, attending school in nearby Fleet.

At 19, he returned to north to read English as what today is Napier University, Edinburgh, only to interrupt studies when offered a position with Royal Insurance in the Scottish capital aged 20.

In 1987, Graham took over as pensions manager for Cornhill Insurance (owned by Germany’s Allianz), covering the north of the United Kingdom and Northern Ireland, before, with the birth of his first son, he took the entrepreneurial path, establishing his own, fully-regulated, financial advisory business in Edinburgh.

Along the way, he gained the U.K. Financial Advice and Practice qualification, plus membership of the Institute of Bankers in Scotland.

Moving full-time to Hungary in 2011, he founded G&G Wealth the following year to provide private financial and investment services, across Europe and the Middle-East.

Duncan Graham “The guy that I spoke to at the time, wasn’t really interested. I wasn’t expecting a red carpet, but […] it was very much: if you want to join, there’s the form.”

Unsurprisingly, the Scottish-born financial adviser left that paper blank, and promptly joined the Irish-Hungarian Business Circle, where he was soon an active vice-president.

Graham was soon immersed in the expatriate corporate-social scene, both as an individual and with the Irish-Hungarian Business Circle – not infrequently using his appreciation of a “good dram” at whisky-tasting events to ensure a convivial spirit.

Now president of the St. Andrew’s Association, his marketing skills have raised attendances at the annual ball from a 40-strong gaggle to some 230 in a few short years.

The event raises funds for local charities, including Tabitha House, a Budapest hospice for children.

“I gained a reputation as an events guy. And I quite enjoy it. I enjoy the micro-management and thinking: what would I want, would I want music when I’m eating? Luckily, it’s worked!” he says.

Now aged 56, while firmly ensconced in Budapest, having married his Hungarian wife, Patricia, this year, he pays regular visits to the United Kingdom to meet friends and family.

A keen golfer, Graham is a past board member of the Royal Musselburgh Golf Club, near Edinburgh, the fifth oldest club on record.

Fast forward to early this year, and the mood at the BCCH had changed radically.

With membership numbers dwindling and more than half the 11-person board resigning, Graham was invited to take over.

In his view, after playing a subordinated, if well subsidized, role to the U.K.-funded British Business Center for a number of years, the BCCH had lost its way.

“There really wasn’t much happening.

There was no drive for new members. I think some of it was the motivation of some people on the board. It was a good thing to have on their CV, especially working for a big corporation.”

Taking the helm from June 1, Graham, along with the new, seven-strong board and slimmed-down office staff, are in the middle of a revamp. This includes a drive to attract smaller, British-linked businesses.

As a statement of intent before the summer break, the first item in the new era was more of a social event – watching Wimbledon Ladies’ tennis finals on the big screen at the Marriott Hotel, together with victuals at an affordable HUF 7,000. That attracted some 80 guests.

Not that Graham is out to ignore the larger corporations that have formed the bulk of membership of late: next on the agenda is a swish CEO dinner at the Gundel restaurant with Zsolt Pártos, managing director of Tesco Hungary, along with British ambassador Iain Lindsay, on September 18.

The new chairman freely admits this is at prices (HUF 30,000 for members, HUF 45,000 for others) hardly compatible with small business finances, but says this is all part of the segmentation of events designed to appeal across the spectrum of potential membership.

“This is for board level members. We’ll have other, cheaper events. Some will be free,” he insists.

The ‘Dangerous Game’ of ‘Black-hole’ Brexit BCCH chairman Duncan Graham gives his view on where we are with Brexit.

“Amazingly for me, there are still British companies arriving [in Hungary]. But these decisions were made some time ago, and I think they just said irrespective of what happens, we’re just going to get on with it.

“My personal view is that we’ll still end up with a deal. I think Brexit will happen, but there will still be a deal. I think Boris Johnson is playing the game and making the noises because he has to for the Conservatives’ [support].

“But I think when they come back from a nice long holiday, and then they say: bloody hell, we’ve only got six weeks to sort this out, it’s not long enough!

“I think what he’s trying to do is snap Brussels out of this idea that we’d never contemplate a no-deal Brexit. And we’re trying to show ‘Yes we will! Yes we will!’ So you have to give in on the [Irish-border] back-stop, and everything will be alright. But it’s a dangerous game.

“I think business people have got a much stronger grasp of the implications [of Brexit] than [British] politicians have.

“They really don’t know. They have to turn to the business sector to say: we’re chatting about it behind closed doors, but we don’t really fully grasp what the implications are. Can you please help us; because we are busy telling our constituents we’re going to have bent bananas again, and we can have pounds and ounces again, and all this crap! Whereas, in reality, they don’t really have a clue as to what’s going to happen. The politicians have led us into a horrible black hole.”

Editor’s note: Graham was speaking just before the U.K. Parliament retuned from its summer break, and the subsequent attempt by MPs to block a no-deal Brexit, and Prime Minister Boris Johnson’s attempt to call an early election. A week really is a long time in politics.

Three months in, the BCCH has already attracted half a dozen new members and lured back a handful of apostates.

“We’re at square one. And we’re getting on with it,” says the first British BCCH chairman for 16 years. What he doesn’t say is: “If you want to join, there’s the form.”

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Budapest Business Journal | September 6 – September 19, 2019

Business | 7

INSIDE VIEW

2 Cases Total HUF 350 mln in Compensation:

Hungarian Competition Authority Acting Efficiently for Consumers

Anna Turi, Counsel Anna Turi is counsel at Schoenherr Hungary and joined the firm in 2007 as an associate.

Prior to that she has worked for the European Commission in Brussels. Turi is a graduate of ELTE University, Budapest, and also earned an LL.M. degree in German law at the Universität Regensburg (Germany) in 2006. She earned a further degree at the Pázmány Péter Catholic University, Deák Institute of Postgraduate Studies in competition law in 2010. She has 13 years’ experience as a lawyer, and nine years specializing in competition law. She represents clients in several ongoing merger control proceedings, cartel proceedings, and unfair competition proceedings before the Hungarian Competition Authority, as well as before courts. Turi also has experience in antitrust damage litigation.

Moreover, she regularly holds competition compliance and dawn raid training sessions.

She has acted for clients in numerous industries, including banking and finance, automotive, manufacturing, IT/Communication/Technology, air transport, the financial sector, insurance, construction, food, personal consultancy, etc. She has published a number of articles on Hungarian competition law in various international legal journals.

On the basis of the Scots proverb “many a little makes a mickle”, numerous consumer complaints led to the commencement of recent competition supervision proceedings against the airline operator Wizz Air Hungary Zrt., as well as the life insurance company 4Life Direct and its partners. The main reason for the HCA’s proceedings was the same in both cases: the companies

regarding two insurance packages offered by 4LifeDirect targeting the elderly: namely so-called “Security in Old Age” and “Hospital Care” services.

According to HCA, consumers were not sufficiently informed about: • how previous health conditions affect the performance of the insurer; and • under what terms consumers would receive a full insurance pay-out, as advertised by 4Life Direct.

omitting important information and thereby causing harm to consumers.

Wizz Air Case: Issues With WizzFlex The HCA looked into the WizzFlex service of Wizz Air, available as of 2010. WizzFlex allowed the consumers to modify their flight tickets for free; however, the detailed terms including certain restrictions to the service were not reflected by Wizz Air’s communication.

The HCA uncovered certain rules which were not duly communicated to the consumers. These rules were in fact capable of preventing consumers from deriving full benefits of the payable WizzFlex service. For example: • in the case of a return flight ticket, changing the return journey was not possible after the commencement of the outward journey; • if two or more passengers purchased tickets under one booking number, it was not possible to individually change the flight tickets of passengers via the internet: all passengers’ tickets had to be changed simultaneously; • consumers could not benefit from any positive price difference between the price of the purchased ticket and the new ticket, meaning that the new ticket was always offered for at least the price of the purchased ticket, even if the price of this new ticket was cheaper if the consumer purchased it separately. On the other hand, consumers had to pay the price difference if the new ticket was more expensive than their original one.

Outcome of Proceedings

Márk Kovács, Associate Márk Kovács is an associate of Schoenherr Hungary, where he contributes to the work for the IP and EU & Competition practice groups. He is a graduate of Pázmány Péter Catholic University. Before joining Schoenherr he gained experience in trademark and design law including advising on complex brand protection and IP litigation strategies at a Hungarian patent attorney. At Schoenherr, he continues to offer advice and assistance to Schoenherr’s significant clients, with a special focus on trademark and copyright litigation, achieving noteworthy results. While at Schoenherr, he has obtained a postgraduate degree in competition law and represents clients in several ongoing cartel and unfair commercial practice proceedings, merger control proceedings, as well as before courts. He has gained outstanding expertise, especially in cartel damage litigation.

Outcome of Proceedings Wizz Air decided to cooperate with the HCA and offered commitments, including considerable compensation to all consumers who had purchased the Wizz Flex service since 2010: • Lump sum compensation: the total amount of lump sum compensation offered

by Wizz Air to the consumers might reach HUF 250 million (approximately EUR 780,000). Approximately 120,000220,000 consumers are potentially affected by the infringement, and the average amount of compensation will be around EUR 8.3-per-passenger.

The compensation will be available for five years in the Wizz Air accounts of consumers, who will also have the chance to transfer the amount to their bank accounts.

• Paying back the price difference: Wizz Air undertook to pay back to each concerned customer the price difference between the price of the original flight ticket and the price of the changed flight ticket, if the price of the changed flight would had been cheaper absent the WizzFlex service.

HCA noted, among other things, that Wizz Air’s cooperation and the compensation offered to consumers played a significant role when deciding on the acceptance of the commitments.

As a result, the HCA refrained from establishing Wizz Air’s liability for the

infringement; however, it will keep a close eye on the fulfilment of the commitments.

4Life Direct Case: Investigated Issues Following a fine imposed on the insurance company 4Life Direct by the HCA in 2016, the company was targeted again by the authority after numerous consumer complaints. In this second competition supervision proceeding, HCA revealed further unfair businessto-consumer commercial practices Schoenherr Hungary was formed in 2008 when a well-established team of experienced legal professionals, now led by Kinga Hetényi, joined the firm in order to benefit from Schoenherr’s strong position in the CEE/SEE region. It has a long track record of representing foreign investors, mainly in acquisitions and greenfield investments, corporate, employment law, merger control filings and other competition matters, finance and insolvency matters as well as real estate transactional mandates, construction and development, including large-scale infrastructure

Having receiving a substantial fine in the first supervision proceeding, 4Life Direct changed strategy for its second proceeding.

This time 4Life Direct cooperated with HCA and undertook commitments which included thorough compensation for harmed consumers totaling almost HUF 100 million (approximately EUR 310,000). Ultimately, HCA accepted the commitments offered and refrained from establishing the liability of 4Life Direct. According to its decision, HCA had particular regard to the compensation offered to consumers when it accepted the commitments of 4Life Direct.

Conclusions It now seems that cooperation with HCA and reparation of the damage caused is well worth the efforts. Mitigating the effects of the infringement by the investigated company is not only an attenuating circumstance. It may not only result in the reduction of any fine imposed, but also result in HCA refraining from establishing an infringement, which sends a different message altogether to the market and to consumers, saving the company’s reputation.

The HCA has huge discretion in deciding whether the cooperative measures offered by a company are sufficient to avoid the establishment of an infringement. From the recent decisions, it can be ascertained that full compensation of the consumers harmed may serve the public interest to an extent which outweighs numerous other reasons for establishing an infringement and imposing a fine.

Without doubt, these cases are positive examples for other undertakings involved in future competition supervision proceedings initiated in unfair commercial practice cases. and energy projects. Additionally, the team advises numerous sizeable corporate clients on an ongoing basis on issues such as general corporate, commercial and regulatory matters, real estate and employment law. Recently, the office has been attracting a growing number of international and domestic corporate clients in the energy, food, technology and banking and insurance sectors.

www.schoenherr.eu

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

Misleading business-to-consumer information may lead to significant fines.

Two recent decisions of the Hungarian Competition Authority prove that the HCA has maintained its position as watchdog of consumer rights, alongside that of fair competition.

However, cooperating with the authority and offering reasonable compensation to harmed consumers may significantly affect the outcome of the HCA’s proceedings, and not only result in a reduction of the fine, but also in the HCA refraining from establishing an infringement, as enshrined already by prior case law.

8|2

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Chilion is a Hungarian brand manufacturing chili sauces, and is already earning accolades internationally. The Budapest Business Journal sat down with co-founder Róbert Gergics to talk about the project.

BENCE GAÁL

BBJ: How did the idea for Chilion come about?

Róbert Gergics: The idea comes from my friend István Hornyák, who started cultivating and processing hot peppers in the garden of his home in 2012. The backbone of his products was habanero, ghost pepper, and Hungarian sweet-noble kapia pepper… During a barbecue, he gave me a toothpick and a bottle, asking me to dip... It took me five or six minutes until I could say anything. Besides the hellish hotness, the taste impressed me as well…

A full paprika flavor, no seeds, no vinegary tinge. Afterwards, we brainstormed about making a business that could turn a profit.

I had some capital and experience in management, so I joined the venture.

We created a new brand, Chilion in 2014.

BBJ: How does Chilion stand out from its competitors?

RG: At Chilion, chili is more than the dry fact that it is hot, very hot, or brutally hot...

Of course, we have these categories as well, but we approach every product from the gastronomical point of view, posing questions such as “What does a mangochili sauce go well with?”. Then comes experimentation. Hotness, flavor depth, color, and food pairings. If it sells well and the feedback is positive, it stays; if not, we take it off our palette. With our innovative thinking, we show the way to smaller companies on the market in processing, packaging, and marketing. Examples include keyring chili and the chili syringe, unique ideas “borrowed” by others.

BBJ: How many people make up the startup’s team?

RG: There are not many people in our company, except during processing, when we employ 15-20 people, but we only operate with a handful of people otherwise. We are trying to optimize and outsource most processes, leaving us as much time for product development and retail as possible.

We are present online (Chilion.hu) and exhibit at events and fairs across the country.

Every day we send packages to multiple locations in Hungary, and orders from EU member states are also quite frequent.

BBJ: What successes has Chilion achieved so far?

BF_2019_BBJ_124x320.indd 1

2019. 08. 29. 12:15:02

Róbert Gergics RG: In 2015, we won Telekom’s yearly website competition by a margin of two likes, receiving HUF 5 million in marketing support. By 2016, we had the largest chili Facebook community with more than 21,000 members. We never had a campaign aimed at gaining likes, and we will not have one in the future. In 2017 we became world champions with our Jolokia 4x product at the World Hot Sauce Awards in the Pepper Blend category. The emphasis here is not on the hotness, but the flavor, with the product having at least two or more peppers being mandatory. According to the jury, we received the award as, “Besides the power of ghost pepper the product has a unique, Hungarian flavor profile due to the sweetnoble kapia pepper.” In 2018 we managed to seal contracts with two multinational companies, Auchan and Metro, in Hungary, uniquely in the industry. Now, one can try products in a new category: limited edition white label bottles, with features like seasonal fruits and South American recipes.

BBJ: What are Chilion’s plans for the future?

RG: In 2020 we want to expand our wholesaler network in a franchise system, using our knowledge and experience to cover an even larger area domestically and worldwide, besides coming up with new products and flavors. We also want to raise the Chilion brand into public awareness, aiming at chili-loving youth with a variety of different clothing products.

We believe that we can be present in the consciousness of the next consumer generation at the same level of the already popular Erős Pista.

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Budapest Business Journal | September 6 – September 19, 2019

Internal Audit and Control: Protect, Improve and Grow Your Business In their latest Corporate Finance column, Les Nemethy and Sergey Glekov explain the importance of internal audit and internal control in private companies.

The term “internal audit” is usually associated with publically held or very large companies. However, internal audits may also be used by small- and medium-sized enterprises in an efficient and cost-effective way in order to improve businesses and their underlying process, and thereby also improve economic results and valuations.

The context is, of course, very different for SME’s than with large public companies: in the SME context, an internal audit is typically a customized audit, designed to meet very specific needs and requirements.

Before answering why smaller organizations might want to perform an internal audit, let us first define “internal auditing”.

According to the Institute of Internal Auditors, internal auditing is “an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.”

In other words, unlike external auditors, internal auditors work directly with management in areas such as governance, risk, control and compliance, helping to examine and validate that the company is operating as intended, managing its biggest risks, and complying with applicable laws and regulations.

Internal audit areas common for SMEs typically cover key risks (strategic, operational, compliance and financial) that need to be managed and mitigated. In contrast to external audits, which focus exclusively on financial reporting and its

associated risks, internal audits cover broad categories of risk and their management.

The list of areas varies according to a company’s size and industry. For instance, KPMG lists cybersecurity, transitioning to and operating in the cloud its publication “Top 10 internal audit focus areas for technology companies.”

Reasons to Audit

Smaller companies usually have specific reasons to perform internal audits, as pointed out in “Internal Auditing is an Asset for Small Companies as well as Large Ones”, by risk and business consulting company Protiviti: • To understand and verify how activities and processes are actually operating,

Keep learning

Business | 9

The Corporate Finance Column going beyond a perception of how they are working; • To look into known problem areas and develop a fact-based action plan to make corrections and improvements; and • To verify that critical areas that must operate flawlessly are in fact doing so.

Internal audit for a smaller company may become a catalyst towards maturity. SMEs often look at internal audits as a cost, but it would be better to consider it an investment.

Better efficiency, governance and risk management should lead to superior performance and valuation. Internal audit may help improve business processes and sustainability in crisis, and also help prepare an organization for the purposes of capital raising or selling a company.

When areas to be audited are identified, a typical internal audit cycle in a smaller organization might be designed as follows:

Typical internal audit process As an internal audit assesses effectiveness of controls put in place to mitigate risks, it should result in actionable reports that lead directly to process improvement.

Internal audits and internal controls are both methods of risk management.

However, in contrast to internal controls,

Decide on what needs to be achieved

Review objectives and identify risks

internal audits are performed at predetermined intervals. Internal control is an ongoing system to ensure continuous improvement in operational efficiency and effectiveness through the control of risks. Therefore, internal controls may be considered a part of a company’s day-today management and administration.

Turbull Report

The Turnbull Report, now the Financial Reporting Council’s Internal Control document that sets out best practice on internal control, defines internal control and its scope as follows: “The policies, processes, tasks, behaviors and other aspects of an organization that taken together: • Facilitate effective operation by enabling it to respond in an appropriate manner to significant business, operational, financial, compliance and other risks to achieve its objectives. This includes safeguarding of assets and ensuring that liabilities are identified and managed.

• Ensure the quality of internal and external reporting, which in turn requires the maintenance of proper records and processes that generate a flow of timely, relevant and reliable information from both internal and external sources.

• Ensure compliance with applicable laws and regulations and also with internal policies.”

Adequate internal control procedures reduce operational risk, help prevent fraud and theft, and enhance reliability of financial reporting, all extremely important issues for SMEs. To conclude, SMEs should embrace both internal audit and internal control. Their main goal is to help protect and improve businesses, especially as they grow.

Effective internal audit and internal control increase the likelihood of achieving and maintaining business health.

Typical internal audit process Follow up

Develop a report that will drive action

Complete the work and validate the facts

Plan the auditing activities

Source: The authors, using data from the Internal Auditing is an Asset for Small Companies as well as Large Ones, Protiviti

Les Nemethy is CEO of EuroPhoenix (www.europhoenix. com), a Central European corporate finance firm, author of Business Exit Planning (www. businessexitplanningbook.com) and a former president of the American Chamber of Commerce in Hungary.

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Business

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Budapest Business Journal | September 6 – September 19, 2019

Found in Translation: MemoQ Software Formed by three Hungarian language technologists more than 15 years ago, memoQ is one of the world’ s fastest developing computer-assisted translation technology companies . The company grew from an after tax profit of HUF 108.2 million in 2017 to HUF 131.7 mln in 2018, while net sales are up to almost HUF 2 billion, according to public records. The Budapest Business Journal spoke with co-founder Balázs Kis. ÉVA KASZAP

BBJ: Who were memoQ’s founders?

Balázs Kis: In our early stage we had three partners: István Lengyel, Gábor L. Ugray and myself (hence the original name of the company: Kilgray, from our names).

We were working together at language technology company MorphoLogic at that time. Gábor studied mathematical programming and German, István is an economist, a translator, and a PhD in translation studies. I am a computer engineer and I also have a PhD in applied linguistics.

BBJ: What was the original idea and target market?

BK: We had three basic motivations.

First, around 2003-2004 we realized that we could do better than the computerassisted translation technologies at the time, so we teamed up with a group of programmers, and created a program.

Second, I was teaching translators how to

of our sales. Our second core audience is translation companies . This is our traditional market, where we could fill a vacuum, and as a result, grow more than 100% annually between 2008 and 2011.

The third focus group is enterprises that have their own translation activity. We are particularly strong in some sectors, the best example being game developers.

Other sectors, such as healthcare companies, are challenging because their industry is highly regulated. However, thanks to the expertise of some of our team members, we are making successful inroads in that field, too.

Balázs Kis, co-founder of memoQ. use translation tools. Thirdly, inspiration also came from my family; my parents and I had a publishing company focusing on IT titles, where several translators had to work on each single project with very tight deadlines. We had to produce high-quality and terminologically consistent output through group translation. We created an efficient workflow, where team members could work on separate parts in parallel and stay consistent, thanks to thorough preparation and peer reviewing.

BBJ: Did you have any financial support at the beginning?

BK: No. We had some tender money, but in the beginning most our financial backing came from own sources, and after a few years, from revenues generated by the business.

BBJ: What is the key to the success of your business model?

BK: In 2009, we set a goal: to be one of the prospective vendors if, at a translation technology tender, two suppliers are considered. I think we have achieved this. Today our business strategy focuses on more down-to-earth goals. In the beginning, our product was very traditional: customers bought a license, and installed the product on their PCs. Computer software, however, has changed significantly; collaborative technology now must be cloud-based.

Accordingly, we have changed our product and our business models. We offer traditional software and cloud services. Traditional software costs more up front, while cloud services are paid for monthly. At memoQ, the two models coexist peacefully.

We have only one product: memoQ, a computer-assisted translation software.

It offers many features to individual translators, translation teams, translation companies, and enterprises in general.

Depending on our customers’ needs, we offer various deployment and licensing options. In terms of deployment, our server can run in the cloud with three

different geographical centers. We can also provide dedicated servers and manage the full hosting service. In these cases, we do all the maintenance. A third deployment option is when customers install the product on their systems.

As for payment models, we offer perpetual licenses along with a technical support period of one year. However, we also have a monthly or annual subscription model. Customers pay

“Our customer base is very international. We have clients from roughly 100 countries. Our main customer areas are Germany and the United States, but the rest of Europe is also strong.

We have local distributors in China and a presence in Japan as well.”

BBJ: What is the breakdown between local and foreign customers?

BK: Our customer base is very international. We have clients from roughly 100 different countries. Our main customer areas are Germany and the United States, but the rest of Europe is also strong. We have local distributors in China and a presence in Japan as well.

Our total headcount is around 80 people, including overseas colleagues . Japan is a dynamically growing market, making a 100% expansion last year. Hungarian customers amount to only 1% of the total.

BBJ: What is memoQfest?

BK: This is our annual conference for current and future users. The first such event was in 2009. Our aim is to boost our brand and budget as well as to provide professional content to the attendees.

BBJ: Will machine translation ever replace human work?

BK: The answer to this question is a firm “No”. There will always be a gap between machine and human translation.

Besides, the global translation workload is constantly growing, which leaves plenty of space for human translation, even with neural machine translation (which is treacherous: it often produces perfectly formed translations, but silently skips parts it cannot translate).

BBJ: What future goals does memoQ have?

BK: A couple of years ago we have consciously begun to deal with our “technological debt”. The code of a software product always needs modernization every few years. For example, ours had to be at least partly redesigned for cloud-based services. This is a never-ending process.

We plan to add more process automation to memoQ and to improve our business services. We are also thinking about a subscription fee for the use of the the language industry as a whole. In its software, the access to support, as well current form, translation is an afterthought. as the upgrades to new versions.

Most content is not created for a local audience. More globalization requires more BBJ: What is the company localization, which should start as early in behind memoQ? the content creation workflow as possible.

BK: Last summer we renamed our company Post-editing, reviewing, correcting content from Kilgray to memoQ Translation is the most expensive means of quality Technologies with the idea of unifying control. We are already offering tools (such the brand. The shareholders are different as terminology management, advanced now: not every owner is a founder. We also editing functionality, or real-time QA) wanted a transparent and clear trademark. and also seeking new ways to challenge this status quo.

BBJ: Who are your main target groups?

BK: We are targeting three main segments. Editor’s note: An earlier version of this Individual translators are the most article appeared in our issue of August numerous group, but they purchase low 2. We are reprinting it here to allow for volumes. They give roughly one-quarter updates and clarifications.

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www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Special Report IT, System Integration

Helping Hungary Move From a Labor-to Technology-intensive Country

12

5G Auction Likely to Spur Competition

13

Despite Labor Worries, Hungarian ICT Punches its Weight Internationally

14

Online Steaming Expected to Grow Faster in Hungary than CEE

16

Market Talk: ICT, a Sector of Rapid Change 17

A look at the trends shaping the information and communications technology market in Hungary.

12 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Helping Hungary Move From a Laborto Technology-intensive Country Tamás Laufer was elected president of the Hungarian Association of IT Companies (IVSZ) in 2010. This year, he also became VP of the Hungarian Association for Innovation. The Budapest Business Journal sat down with him to discuss the state of the ICT market locally.

ZSÓFIA VÉGH

BBJ: According to a study by McKinsey from last year, the potential economic and developmental benefits of digitization for Hungary could reach up to EUR 9 billion in additional GDP by 2025. Where do we stand right now?

Tamás Laufer: Four years ago, IVSZ assessed the digital economy and its contribution to GDP and gross value added. Unlike Hungary’s Central Statistical Office (KSH) and also the EU’s Eurostat, which collect data from the fields of ICT and communication separately, we used a new methodology, taking a more holistic approach. When trying to gauge the size and significance of the digital economy, not only should we look at ICT firms but companies that use such tools and technology and the profits they make. Also, what opportunities they create indirectly in other areas, and there is no data available for that.

Then we said that the size of the digital economy was 20%, far bigger than McKinsey stated in its study (7%) through a different methodology that did not take into account the spill-over effects. This year, we have conducted a new study called “Digital Economy Footprint” with updated methodology.

Though the results will be revealed only later this month, it is obvious that the significance of digital economy has constantly been growing ever since.

BBJ: How does the level of digitization affect the country’s global market position?

TL: There is, indeed, a connection between the dynamics of a certain field and a country’s level of robotization.

In this ranking, South Korea is by far the world’s leader with 600-700 robots/10,000 people. Looking at the what companies (Samsung, Hyundai etc.) reside in South Korea, this connection is obvious. In Europe, Germany takes the lead with 150, while in Hungary, this figure stood at 50 a few years ago. Since this data is projected on 10,000 people, the ratio of automation within a large company in the country is much better.

Today, Hungary is still a workforceintensive country, not technology intensive, but we are headed to that direction. One reason is the wage increase of nearly 40% that has taken place in the past two years.

Some firms responded by cutting labor, others have opted for technology-intensive investments. To give you an idea, in a factory where they employed 100 people they now need ten, while the need for support staff has increased.

BBJ: Yet this support staff needs digital skills as well. How digitally savvy is the active workforce in Hungary?

TL: With wages increasing and companies continuing demand for labor, a new trend has emerged: people become less motivated to learn new skills seeing the purchase power of their salaries rising. The wage rise was the result of the labor shortage, not of newly acquired skills. Large companies have also started to digitalize their operations because, compared to their peers abroad, productivity and efficiency in some Hungarian daughter companies is lower.

This is challenging as well, as qualified support staff are also in short supply.

A further dilemma is that they cannot

Tamás Laufer send their employees for a year-long training, and if they take on qualified workforce that would further increase wages. The solution is to create the ideal blend of classroom activities and e-learning that would help time-efficient training of the existing staff. Professional education is being reformed right now, but even so it is unable to retrain a sufficient number of professionals to fill all vacancies. Together with chambers of commerce and the government, IVSZ created a training program called the

Digital Workforce Program that aimed to reduce the labor shortage two years ago, but it never really took off. Part of the reason why it didn’t is that there is not really a culture of lifelong learning in Hungary. In Europe, we are at the bottom in terms of professional learning with less than 10%, while in some Western European countries this ratio can reach up to 20%.

BBJ: How has IVSZ aligned its structure to address these new challenges?

TL: Digitization has opened the world and the way we have restructured operations reflects that. We haven’t changed our scope, rather the “platform” affected has changed. Our members can be divided into two categories: ICT firms themselves, and companies for which digitization is key to operations; these include banks, insurance, fintech companies, etc.

What we are trying to achieve is that all fields have their own digital strategy, such as the agriculture, which has been approved recently. The solutions comprised in the program will help farmers strengthen their position against integrators. We are part of the Industry 4.0 strategy and work with domestic SMEs to support their digital transition.

To fully support these programs, IVSZ has reorganized its boards. Unlike earlier, now every board member has a field assigned to them that they are responsible for. These include strategies for startups, education, innovation, export, etc. Our management has become more departmentalized; we hope we can operate much more efficiently as a result.

We are also the founders and a member of the Artificial Intelligence Coalition, a very active working group with several members that aims to address and have legislation created for problems such as access to data of public interest. This information, usually “owned” by an institution, can be a solid foundation for AI-based developments.

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Budapest Business Journal | September 6 – September 19, 2019

5G Auction Likely to Spur Competition

INSIDE VIEW

ZSÓFIA VÉGH

There are a host of services in Hungary you can complain about. Luckily, broadband connection is not one of them.

In fact, the 4G network in Hungary is outstanding worldwide, both in terms of coverage and average speed.

Even during high-traffic hours, in the evening, for example, there is no slowdown. Although people rely more and more on their smartphones, Hungary is still below the average in terms of data usage.

Monthly traffic per SIM-card is 2.41 GB on small-screen devices, which is at the lower end of European and OECD countries, according to a report by National Media and Infocommunications Authority (NMHH).

Non-industry users, therefore, are not in desperate need for the rollout of a

5G

However, for service providers and the country, developing the network is crucial from a competition viewpoint.

“In order to keep the advantage and continue developing the mobile infrastructure necessary for the country’s competitiveness at a desired pace, this tender must be done properly during the autumn,” says Bálint Végh, senior manager of telecommunication, media and technology at PwC Hungary.

No Guarantees

According to the expert, the upcoming 5G tender is relevant for the domestic telecom industry in several ways. Frequency capacities are limited, so there is no guarantee that the auctioned usage rights will be evenly divided between players, Végh says.

In order to increase its broadband coverage, Digi, a market player whose mobile service was launched not long ago and is currently in a pilot phase, will also likely look to enter the bidding process. As a result, more players and more competition is expected, and the execution of the tender itself is also likely to bring about price competition, Végh notes.

“We are not ruling out the possibility of frequency sharing either, a practice which can be traced abroad and here as well.”

Frequency sharing comes with certain risks though, as an ongoing investigation

Bálint Végh by the Hungarian Competition Authority proves, the expert adds.

The tender also aims to provide coverage for major tourism and transportation routes in line with the EU’s 5G roadmap. As a result, Hungary can improve not only its 5G coverage but also develop innovative services based on 5G.

Total lots available in the 5G auction: • two 25 MHz lots in the 700 MHz frequency band (to be used in a pair because of the access method); • two 15 MHz lots in the 2,100 MHz frequency band (to be used in a pair because of the access method); • 15 MHz in the 2,600 MHz frequency band; • 310 MHz in the 3,600 MHz frequency band.

The winners will receive the usage rights for a 15 year period, which may be extended once for an additional five years.

‘Constant Dialogue’ Makes Client Workflows Smoother, More Efficient Gábor Fülöp Business Sales and Marketing Director Telenor Hungary The BBJ speaks with Gábor Fülöp, Telenor Hungary’s Business Sales and Marketing Director, about the services the company offers businesses today, and the future of digitalization, Industry 4.0 and 5G. BBJ: What role does system integration have for Telenor and its business clients? What kind of solutions do you offer?

Gábor Fülöp: System integration at Telenor is primarily related to our mobile and IT services. For example, we offer digital Private Branch Exchange (PBX) services for SMEs and large companies to replace their existing physical PBXs. We offer this as a monthly, highly flexible service, which is also advantageous because it is easy to administer and costs are scalable; these are important factors for businesses. The role of virtualization is becoming ever more important, so Telenor is offering cloudbased services based on Microsoft’s virtualization technology, which means customers don’t have to invest a lot: instead they can upgrade their entire telecommunications or software infrastructure while paying a monthly fee. The popularity of these services is growing as they are plannable, software updates are always available, and since they have access to Telenor’s Hipernet-network, data and information is always available in the cloud at any time.

The IT applications we currently offer include smart metering, which we are planning to develop in the future. Telenor’s SIM cards and solutions are used in remote monitoring/surveillance and fleet tracking systems at many large companies countrywide. This latter allows you to measure important parameters in any truck or haulage system anywhere in the world.

For example, in the case of a drug or grocery shipment, the temperature of the shipment needs to be checked continuously, and to do that the availability of a cellular network connection is essential. This can be life-saving because without measurement, sensitive cargo can be damaged more easily and the drug in question cannot reach the pharmacy at the proper quality.

BBJ: What services do you provide for companies in those business sectors (for example, agriculture) where you are present?

GF: We work with companies from many areas, let me name just two. Through real-time tracking of machine work, advanced mobile technology solutions greatly enhance efficiency and support precision farming, which is one of the most important types of innovation in agriculture today.

A successful invention by one of our partners, a satellite fleet tracking system called WayQuest, is already being used on more than 7,000 machines in 300 companies. These communicate with central computers via the Telenor Hipernet network.

Zalaegerszeg-based Zalavíz Zrt., which is responsible for drinking water supply and wastewater treatment at 161 localities in the

area, has installed on-line communication and signaling devices that provide real-time data and operational security. Water scarcity in the area has been significantly reduced since the system became operation.

BBJ: What services and products do your business clients need? Which are the services that best facilitate companies’ daily operations? How do they increase efficiency?

GF: In addition to mobile voice and data services, it is important that we provide our clients with IT services by third party partners that they can access through our network. Cloud services are becoming ever more common, there are very few areas that need to be done at a mid- or large-size enterprise through on-premises infrastructure.

As demand for cloud services is growing, we are continually introducing products that will enable this beyond Office 365.

We are launching four new products that target the most popular, key business applications in order to provide the most up-to-date platforms possible. One key development area is IT security.

We are in constant dialogue with our clients and are exploring how we can make their workflows smoother and more efficient. As time is money, our main goal is to help our partners focus on their core business and provide them with as much added value as possible through our services; it is also our goal that everything we do for them is related to IT or mobile telephony. As a result, in the future our prospective customers may purchase services from Telenor where they might not previously have thought of us as a potential partner.

BBJ: What major developments have taken place this year in the field of digitization?

GF: Over the past year, we have launched a portal for our large company clients, through which they can perform many activities that they were previously able to do only through customer service; it is much more convenient for them and, of course, they can save time. The features available here are constantly being developed and in the future we want to expand it to more segments. Our goal is to ensure that all services and features that do not require human intervention, such as replacing a device or ordering a new device, can be done online by business clients. Account managers should be used only when they need consultative sales, clarification of different needs, or consulting. We have made great strides in digitizing our internal processes also, because without it, external tasks could not be digitized either. Many of our processes are already fully automated, enabling quick decision making and customer service. Extending existing features of the MyTelenor application will also take place to enable business clients in being able to complete important transactions.

BBJ: How are you preparing for 5G transition?

GF: 5G technology will primarily focus on business customers, even enabling them to replace wired technologies in certain areas. 5G will support industry 4.0 and networks. In May, Telenor launched a 5G test network in Győr. Built at Széchenyi István University and in downtown Győr, the system is the first in Hungary to provide the university’s engineering students with the latest mobile network technology. This will not only make the latest technology available, but also give the local 5G and R&D a boost, which we are planning to make available to our clients. We are planning to involve the region’s businesses in the testing process as soon as possible, bringing them closer to the technology of the future.

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

This June, the National Media and Infocommunications Authority (NMHH) opened the process for selling 5G frequencies. With the auction itself scheduled for this fall, no results have been announced thus far, but how will the new frequency be relevant for users and market players?

network.

Special Report | 13

14 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Despite Labor Worries, Hungarian ICT Punches its Weight Internationally As the Hungarian ICT sector keeps its gloves tight in defense against European competition, it is also challenged by a quickly-changing labor market that lacks skilled talent.

CHRISTIAN KESZTHELYI

The Hungarian information and communications technology sector is not only a strong player in terms of the local economy, but is also a worthy contender in the European market.

The approximately 400,000-strong sector in manpower sees Hungary placed number five globally across all hacker rank challenges, and has the country at the top in terms of scientific research institutions in the Central and Eastern Europe region, according to figures by the Hungarian Investment Promotion Agency, a state-owned entity nested in the Ministry of Foreign Affairs and Trade.

The country benefits from a wide selection of advantages. “A mature economy within the European Union, with proximity to the industrial clusters in Central Europe and a predictable business climate, make Hungary a more favorable and stable choice than some other former Eastern bloc countries,” Carl Vikingsson, CEO Sigma Technology Group, tells the Budapest Business Journal when placing Hungary on the ICT map in Europe.

Beyond a well-performing local economy (unadjusted growth in Hungary’s gross domestic product

was

4.9%

in the second quarter of 2019, according to a flash estimate from the Central

airport to European capitals, and a culture similar to most European and North American countries, Gábor Tőzsér, CEO and Founder of Quickborn Consulting LLC tells the BBJ. To this mix can be added a well-established and high-level education system.

The attractiveness of Hungary for ICT operations is well reflected by international giants dominating the market.

“Low penetration of local IT business forces Hungarian companies to seek international customers and attract industries who are willing to invest and set up research and development (R&D) centers in Hungary. Being part of global companies, Hungarian R&D centers get a unique insight in the international business behavior, management practice, and trends, which make the software industry in the country stronger and more mature in contrast to if the Hungarian IT market only worked locally,” Vikingsson says.

Best Practice

Additionally, Hungarian IT units that are part of global corporations are in competition with the international leaders and have to benchmark their

then is if the Hungarian economy has the attractive business tax climate to keep the promising entrepreneurs with outstanding ideas in the country,” Vikingsson adds.

This market dynamic has increased competition for the most valuable resource; highly-skilled and experienced talent. As the demand for more value to be delivered in less time and at less cost grows, having the right staff is crucial.

“We are training our team more often and for longer duration in more areas and ways. We are becoming a leaner, faster reacting organization to keep pace with expectations for more speed and

business and adopt the best practices to be competitive.

“In the long run, this will encourage driven people to start up new creative enterprises in Hungary. The question

In

2020

the admission to computer science departments will require intermediate level of English, which will contribute to the higher English proficiency of future Hungarian engineers,” Nagy adds.

The sector faces two emerging challenges; continuous skills development, on the one hand, and widening the resource pool on the

Carl Vikingsson agility,” Tőzsér, Quickborn’s CEO, says.

Nevertheless, available qualified resources are hard to find, he adds.

The labor market in Hungary today seems to be characterized by Generation Y and now also Generation Z who seek quick results and are not interested in long, drawn-out processes.

“The rise of agility is a welcome development, not just as a general methodology for how companies are run, but also as an expectation from candidates. The young professionals of today want to get things done, and they have little patience for a recruitment process which is dragging on, a slow internal tool, or a sluggish IT department,” explains György Nagy, country manager at Sigma Technology Hungary.

“They also want to get and give regular feedback, and to be able to ‘peer-talk’ with everyone at the company, including the CEO. The days of an inaccessible manager working behind closed doors are long gone. Flat organizations, such as Sigma Technology, will be more and more common,” Nagy forecasts.

György Nagy Statistical Office (KSH), above the 4.7% pundits had estimated), Hungary boasts of a relatively attractive geographical environment and weather climate, a pool of talented resources, a well-connected

content. The culture, values and sustainable work of a company all seem to be determining factors in not only winning over the best candidates, but also for keeping them.

English language proficiency is also on the rise. “We work closely with Hungary’s prominent tech universities and we can see the trend that competence in the English language is growing.

No Buzzwords

Additionally, it appears that employees are tired of nice sounding corporate buzzwords; they demand meaningful

other (e.g. by working on diversity at the workplace and encouraging more women to choose IT) on the other.

When choosing whom to hire, Sigma Technology says it will opt for the one out of ten candidates who is (among other things) ready to keep learning after settling into the position.

“While we enjoy the extra pressure coming with the need for continuous competence development, it also makes the workforce more expensive. That said, we very much believe that people will work at – or come back to – the workplace which has taught them the most skills, so investment in training and professional development is worth every cent,” Nagy says.

Almost half a decade ago, participants of a Morgan Stanley Hungary workshop unanimously established that the IT sector needs more women; especially in coding, as the better organizational skills on the gender results in more streamlined and clearer coding.

“There has been a lot of discussion about workplace diversity, and Sigma Technology believes that there’s still a lot of work ahead for companies in this area, especially when it comes to the (sadly very low) percentage of women in IT,” Nagy adds.

The Hungarian country manager also notes that, as a result of an aging population, especially as the workforce is becoming scarcer than ever, age diversity at the office will also be a dialogue in the upcoming years; a challenge that lurks in the pipeline for now.

A kép illusztráció.

16 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Online Streaming Expected to Grow Faster in Hungary than CEE are far less exact and reliable than what Facebook, Amazon or Google can access.

For these player, content itself is not the major source of revenue, though it is definitely a driver of that. Revenues from other business lines allows them to finance the often loss-making activities such as content creation or streaming live content.

They are also quick to innovate having no legacies (e.g. infrastructure) that would drag them down or would prevent them from stepping into new territories, the study points out. And when it comes to pricing, product bundling helps them offer more favorable prices.

However, the pace at which habits and traditional media consumption change may not be in line with the speed technology is evolving. A good indicator is how advertisement revenues at different mediums change.

“In Central and Eastern Europe, TV ad revenue will grow by an average

Thanks to new business models and a new approach to customers, giant technology platforms are rapidly gaining ground in media and content consumption.

of

5%

ZSÓFIA VÉGH

If you visit Rotten Tomatoes, the U.S.based review-aggregation website for film and television, you will see three main sections to pick from: “In Theaters”, “DVD and Streaming” and “TV Shows”.

IMBD (Internet Movie Database), the go-to online database of information related to films, television programs, home videos, video games, etc. also has a section on streaming content among “Special features”.

Today no trusted site specialized on TV and movies can afford to not have space dedicated to streaming, the most recent way of content consumption which, sooner or later is about to take over traditional methods of watching films. At least, that is, among the young, those aged

under

35.

They who are more mobile, have a much shorter attention span and demand content be streamed so they can watch it with no limits on time, location or device.

Streaming is a great example of how content consumption has been changing, and what response creators and platforms give. Since watching content is no longer reduced to a place or a period of time, or even a type of content, tech giants such as Amazon, Apple, and Disney, whose businesses now span social media, e-commerce, gaming, and mobile device ecosystems, are best positioned to win over customers.

They are the ones that, due the variety of businesses and platforms where they are present, can reach any customer. These companies don’t necessarily have to offer original content, though for the sake of competitiveness and maximizing profit they are better off doing so.

The basic idea is that by offering one type of content, that will promote and strengthen other elements as well. For these tech giants, media and content are just one offering in a much larger ecosystem to capture consumers’ time and wallet in what a study

Miklós Zaránd

by Big Four consultancy KPMG calls a “Race for the platform” .

Five Keys

In its study, KPMG highlights five key areas that drive the expansion of tech giants. Their wide customer base that navigates through platforms with ease and is also committed thank to quality services they receive is a great basis for scalability.

These customers are also an endless source of data which allows tech giants to analyze trends and habits and tailor content accordingly. Data generated and collected by traditional media services

per year over the period 2018-2023,” says Miklós Zaránd, head of technology, media and telecommunications advisory at PwC Hungary.

The same figure for video streaming is 14.8%, but it does not reach one thousandth of TV revenue either globally or regionally. “So the direction is pretty clear: by 2023, online streaming revenue will reach 25% of traditional TV advertising revenue,” he adds.

Live Content

TV service providers are trying to compete by creating their own content and launching their own online platforms to keep their viewing base. In addition, the focus of linear television will be the broadcasting of live content, in particular sporting events.

The video streaming market in Hungary is still very small, with an estimated value of HUF 12 billion. In the region, the only country where PwC expects to see a market share lower than this

until

2023

is Romania. At the same time, the expansion predicted for Hungary is significantly faster than in the region.

The market is expected to grow quickly at a compound annual growth rate of 17.6%, and will reach HUF 28 billion by 2023, according to PwC’s forecast. Most globally available streaming services are already present: Netflix was to the first to appear in January 2016. It was followed

by HBO and Amazon Prime at the end of 2017. Amazon’s e-sports streaming platform, Twitch, is also popular among younger generations and the vast majority of Hungarian gamers and e-athletes.

In Hungary, the fact that viewers are used to dubbed programs, rather than subtitles, is currently the biggest barrier to the spread of globally available content.

“So the direction is pretty clear: by 2023, online streaming revenue will reach 25% of traditional TV advertising revenue.”

This is a minor issue for some service providers, for example HBO, which already dub films. Hungarian subtitles are starting to appear on content from global service providers, however.

Beyond language, another barrier for more content to find Hungarian viewers is market size. Tech giants such as Amazon, Disney Go or Netflix are targeting larger markets where there is more return on their investments. These include Latin America or in Europe countries such as Germany, the Netherlands, and the United Kingdom.

3

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Special Report | 17

Market Talk: ICT, a Sector of Rapid Change The Information and Communications Technology sector is one of the most, if not the most, dynamically developing verticals, not just in Hungary, but globally. ICT does not only amend how we do our business but, sitting comfortably in our pockets, it determines how we communicate, consume content and even do our shopping. As such, any business striving to stay competitive must raise its ICT effectiveness to the highest levels.

János Stautz operate in Hungary and employ about 20,000 Hungarians.”

This busy and fast-developing sector is the very battleground of fierce competition.

Nevertheless, what used to be a tight race for clients has changed considerably.

“Competition has always been fierce in the IT sector. Companies have been fighting for the scarcest resource: in the past it was new business. Today; it is talent.

In general, Sigma Technology is focusing less on what others are offering in terms of their business portfolio, and more on how we can attract and keep the best people,” explains György Nagy, country manager at the group’s Hungarian unit.

CHRISTIAN KESZTHELYI

According to figures from the state-owned Hungarian Investment Promotion Agency (HIPA), which operates under the Minister of Foreign Affairs and Trade, some 400,000 people are employed in the ICT sector in Hungary.

Furthermore, Hungary’s favorable economic environment continues to attract foreign direct investment from the sector, with around 66% of total value added generated by foreign-controlled ICT companies. According to data from the Hungarian Management Consultants Association (VMTSZ), IT-related projects dominated the consulting industry with a

42% share

in 2018.

“As a company with Swedish roots, Sigma Technology has been a part of a research group together with the Embassy of Sweden in Hungary, Business Sweden, and major Swedish companies operating in Hungary,” the company tells the Budapest Business Journal.

“One of our research findings mapped almost 200 Swedish companies that

“Although we see a large number of enterprise resource system vendors on the Hungarian market, those are not close competitors for our target market,” Stautz explains.

He adds that, based on client experience, it often happens that due to the limited human resources of the vendors, the real challenge is not to find a suitable system, but to find a partner capable of providing acceptable services with the solution offered.

Stautz admits that, trying to reach larger multinational clients, TRL finds it is competing against the Hungarian arm of German multinational enterprise software provider SAP, which has regional offices in

180

countries

Talent is Treasure

The hiring and retention of the best talent has indeed kept IT companies busy.

“In our segment, we see continuous growth and demand for skilled staff, with rising costs of manpower,” says János Stautz, a consultant working with TRL Hungary Kft., a Deltek regional distributor, chiefly selling Deltek Maconomy enterprise resource planning (ERP) solutions.

In addition to these challenges, compliance with the fast changing legislative environment is another factor that must have an eye on kept on it.

“Due to new and frequent changes is legislation, TRL Hungary Ltd. has to put more effort in keeping the system compliant with various requirements,” Stautz adds.

As the only Deltek distributor in the region, and given that Maconomy ERP is a unique solution for professional services organization, TRL Hungary says it sees less competition in its niche market.

under its umbrella.

But he is not daunted by that challenge.

“We are confident that the functionality and the cost effectiveness of Maconomy gives us a solid chance to win the business,” Stautz adds.

Despite its relatively young age, the ICT sector, has already gone through disproportionate change in just a few years. The internet started becoming commonplace from 1996 onwards, and fast-forward a bit more than a decade, Steve Jobs introduced the first iPhone in 2007, laying the first paving slab of the “yellow brick road” leading to internet connectivity on the go.

More Sophisticated

As the perception of ICT has changed on the users’ side, it has been developing for developers, providers and businesses too.

György Nagy “There used to be a strong and sometimes counterproductive focus on cost in the past, which is now slowly transforming into a more sophisticated approach from sourcing organizations,” says Nagy, of Sigma Technology Hungary.

“Nowadays, they are looking at other factors too, such as overall value-added, trustworthiness, reliability, or the quality and frequency of communication with their suppliers. These values were considered too soft and subjective to be used during procurements in the past, but not anymore,” adds Nagy.

Additionally, the market is changing on so many levels that keeping tabs on it appears to be a full-time occupation. Cloud computing is on the rise, but the transition of services and business solutions to the cloud can be labor intensive and costly. This, in part, further fuels the steady increase of manpower costs.

With data security and privacy protection demands come continuous legislative changes that add to the compliance challenges. Big data keeps accumulating that needs to be curated, and should also be analyzed to deliver advantages and streamlined operations for companies; business intelligence is the new black.

With IT solutions having reached areas one would not have thought of previously, the process is far from its end, yet.

“It was IT that first went global, and Sigma Technology expects that trend to continue, and reach into areas that are not yet affected,” Nagy predicts.

“There is a general shortage of IT competence in the world, so outsourcing will climb to new heights. It could be further fueled by potential restrictions on travel (especially flights) due to its environmental impact. We at Sigma Technology prepare for that with a strong “nearshoring” offering: setting up development teams close to the customer site,” the Hungarian country manager concludes.

18 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Software developers

Germany

Ÿ

12

Poland, Croatia, Slovenia, Slovakia, Romania, Bulgaria, Czech Republic, Austria, UAE

no. of full-time employees on july 1, 2019 of tHese, full-time softWaRe developeRs

total net Revenue in 2018 (Huf mln) in H1, 2019 (Huf mln) 3,927 2,101

96

distRibution of oWn pRoduCts

www.dorsum.eu

Ÿ

oWneRsHip (%) HungaRian nonHungaRian

Resale

3,909

25,811(1)

Consulting

doRsum infoRmatikai Fejlesztő és szolgáltató zRt.

24,809

softWaRe pRoduCts

installation

www.evosoft.hu

main expoRt destinations

2

evosoft HungaRy kft.

softWaRe Related aCtivities

softWaRe expoRt in 2018 as a peRCentage of total Revenue (%)

1

Company Website

net Revenue fRom softWaRe development in 2018 (Huf mln)

Rank

Ranked by net revenue from software development in 2018

Ÿ

Ÿ

Ÿ

Ÿ

1,233 1,111

– evosoft GmbH (100)

istván petényi Erika Balogh Zoltán Gönye

1117 Budapest, Kaposvár utca 14–18.

(1) 381-6400 sales@evosoft.com

Magyar TakarékWealth szövetkezeti Bank, Management OTP Bank Nyrt., Platform, CIB Bank Zrt., OTP My Wealth, Alapkezelő Zrt., MKB Botboarding, Client Bank Zrt., Magyar Acquisition Tool, Államkincstár, Clavis Raiffeisen Bank Zrt.

✓

✓

–

✓

198 19

(100) –

Róbert Kő – –

1012 Budapest, Logodi utca 5–7.

(1) 487-3030 info@dorsum.eu

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

Invitech, HEINEKEN, NISZ, Garantiqa Hitelgarancia, Seven-Up Bottling Company, Suzuki Magyarország, Törley, Vasivíz, Nyírségvíz

✓

✓

✓

✓

125 75

Individuals (100) –

Csaba Rozenberszki Judit Andráskó Zsolt Rozenberszki

1038 Budapest, Ráby Mátyás utca 7.

(1) 436-7850 info@rrsoftware.hu

NEXONhrm, NEXON_PORT, NEXONbér, NEXONtime

Ÿ

✓

✓

–

✓

269

Individuals (100) –

szilárd ocskay, katalin sass Judit Nyeste Rita Lovas

1138 Budapest, Váci út 185.

(1) 465-5100 nexon@nexon.hu

✓

✓

✓

✓

95

Individuals (100) –

ákos szekendy – –

1143 Budapest, Gizella út 51–57.

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

74

Tibor Kulcsár (96), shareholders (4) –

ervin szabó – –

1016 Budapest, Mészáros utca 13.

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

61

Volán Elektronika Zrt. (100) –

kálmán faur – –

1113 Budapest, Karolina út 65.

(1) 255-3939 info@mve.hu

majoR Clients in 2018

Siemens

top loCal exeCutive Cfo maRketing diReCtoR

addRess pHone email

3

R&R softWaRe zRt.

2,790

3,035 1,279

6

UAE, Romania, Laos, USA, Austria, Slovakia, UK, Nigeria, Czech Republic, Sri Lanka

4

nexon kft.

2,240

4,258 2,358

–

–

1,746

2,552 1,290

37

Germany, Austria

Ÿ

Siemens

1,568

Ÿ

Ÿ

Ÿ

Kulcs-Ügyvitel, Kulcs-Könyvelés, Kulcs-Bér, BioXpert

Ÿ

✓

✓

–

✓

1,555

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

✓

✓

✓

✓

✓

✓

–

68 50

Individuals (100) –

zoltán madár Tamás Kornél Koppány Zoltán Madár

1087 Budapest, Könyves Kálmán körút 48–52.

(1) 204-7730 mail@grepton.hu

5

www.rrsoftware.hu

www.nexon.hu

sysdata pse kft.

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

Ÿ

Ÿ

6

kulCs-soft számításteCHnika nyRt.

1,568

7

libRa szoftveR zRt.

1,555

8

gRepton infoRmatikai zRt.

1,460

2,289 1,150

6

Germany, UK

Ÿ

Ÿ

✓

9

itWaRe kft.

647

848 492

10

Japan, Finland, EU

Fleetware – fleet recording service and webshop, Ipar 4.0 support

Telekom, DXC, Magyar Posta, Vodafone

✓

✓

–

✓

24 8

Individuals (100) –

sándor dankó Erzsébet Papanek Izabella Tüzes

1117 Budapest, Budafoki út 209.

(1) 463-0620 infomail@itware.hu

Ÿ

TriDoc enterprise document and management solution, TriDoc standard document management solution, TriWorfklow - corporate process management, commission calculation and management solution, R&D data collection and analysis solutions

OTP Bank Nyrt., UniCredit Bank Zrt., MVMI Zrt., Hidrofilt Kft., Pauker Nyomda, Antenna Hungária Zrt., Transmoduls Kft., Bank of China Magyarország, Káta CNC Kft., Richard Fritz Kft.

✓

✓

–

✓

17 8

Zsolt József Koltai (100) –

zsolt józsef koltai – Diána Wágner

1149 Budapest, Nagy Lajos király útja 117.

(1) 220-6458 sales@trilobita.hu

–

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

Ÿ

✓

39 4

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

konrád miklós molnár Judit Horváth Magdolna Demeter

1149 Budapest, Pillangó park 9.

(1) 222-2402 terc@terc.hu

–

Ÿ

ANY Biztonsági Nyomda Nyrt., BioTechUSA, FÉMALK Fémöntészeti és Alkatrészgyártó Zrt., Inno-Comp Kft., VAJDA-PAPÍR Gyártó Kft., Wellis Magyarország Zrt.

✓

✓

✓

–

23 5

– InfoConsulting Group/FinCode sp. z o.o. (100)

imre sturcz Cecília Léber Gábor Halász

1132 Budapest, Váci út 22–24.

(1) 236-3700 infohu@ infoconsulting.eu

Ÿ

F1-P1 fleet management system, Pillar accounting and financial system

Ÿ

✓

✓

–

✓

Ÿ Ÿ

Gábor Cseresnyés (100) –

gábor Cseresnyés – –

2071 Páty, Kökény utca 43.

(30) 600-1400 info@calltec.hu

www.kulcs-soft.hu

www.libraszoftver.hu

www.grepton.hu

www.itware.hu

10

tRilobita infoRmatikai zRt.

11

teRc KeResKedelmi és szolgáltató kft.

www.trilobita.hu

www.terc.hu

12

infoConsulting HungaRy kft.

13

CallteC Consulting kft.

www.infoconsulting.eu/hu

www.calltec.hu

453

435

400

249

648 200

1,041 568

816 400

249

Ÿ

5

–

–

Ÿ

✓

✓

✓

Ÿ

Ÿ

3

www.bbj.hu

distRibution of oWn pRoduCts

main expoRt destinations

softWaRe expoRt in 2018 as a peRCentage of total Revenue (%)

total net Revenue in 2018 (Huf mln) in H1, 2019 (Huf mln)

✓

✓

–

✓

–

–

Ÿ

Biofilter Zrt., Fővárosi Állat és Növénykert, HM Arcom Zrt., Széchenyi István Egyetem

oWneRsHip (%) HungaRian nonHungaRian

top loCal exeCutive Cfo maRketing diReCtoR

addRess pHone email

49 8

Individuals (100) –

ákos balogh Enikő Kovács Dániel Burján

1135 Budapest, Mór utca 2–4.

(1) 237-9810 vezig@saldo.hu

Ÿ Ÿ

Individuals (100) –

gellért jászai – –

1037 Budapest, Montevideo utca 8.

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

22

AMCS Kft. (100) –

gábor darmai – –

1117 Budapest, Infopark sétány 1.

(1) 205-0055 info@alerant.hu

37

Individuals (100) –

sándor Cseledi Heléna Farkas Bence Szomor

1117 Budapest, Alíz utca 4.

(1) 646 4740 info@balasys.hu

– Nemetschek AG (100)

Huw Roberts Gábor Svéd Ákos Pfemeter

1031 Budapest, Záhony utca 7.

(1) 437-3000 mail@graphisoft.hu

– IBM Ireland Product Distribution Limited (100)

péter szalay Árpád Konc –

1117 Budapest, Neumann János utca 1.

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

– Logmein Ireland Holding Company Ltd. (100)

john joseph markey, erdelics tímea beáta – –

1061 Budapest, Andrássy út 9.

(1) 413-3780 recepcio.bp@ lonmin.com

– Microsoft Corporation (100)

Christopher mattheisen Zayn Fernandes Gabriella Csanak

1031 Budapest, Graphisoft park 3.

(1) 437-2800 –

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

gábor kelemen – –

1112 Budapest, Kőérberki út 36.

(1) 310-1492 sales@multisoft.hu

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

péter szombathelyi – –

1037 Budapest, Szépvölgyi út 35–37.

(1) 872-0000 legal@nng.com

NR

4ig nyRt.

Ÿ

14,007

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✓

✓

NR

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Ÿ

2,051

Ÿ

Ÿ

Ÿ

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Ÿ

✓

–

–

✓

NR

balasys it kft.

Ÿ

895

Ÿ

Ÿ

CEE region

Zorp Gateway, Zorp Malware Detection, Zorp API Gateway

Ÿ

✓

✓

✓

✓

NR

gRapHisoft se

Ÿ

17,230

Ÿ

Ÿ

Ÿ

Ÿ

✓

✓

✓

✓

595

Ÿ

16,523

Ÿ

396

www.4ig.hu

www.alerant.hu

www.balasys.hu

www.graphisoft.com

ibm magyaRoRszági kft.

NR www.ibm.com/hu

logmein kft.

NR

www.logmein.com

NR

miCRosoft magyaRoRszág kft. www.microsoft.com/hu-hu

multisoft kft.

NR www.multisoft.hu

nng NR szoFtveRFejlesztő KFt. www.nng.com

NR

NR

oRaCle HungaRy kft. www.oracle.com

Qualysoft zRt.

www.qualysoft.com/hu

Revolution NR softWaRe kft. www.revolution.hu

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

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10,313

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Ÿ

Ÿ

Ÿ

Ÿ

13,149 (2017)

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Ÿ

1,245 686

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Ÿ

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Ÿ

Ÿ

400

Ÿ

Ÿ Ÿ

71

Ÿ

Ÿ

33,780

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Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

744

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21,247

Ÿ

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Ÿ

Ÿ

389

– Oracle Nederland B.V. (100)

titusz Csaba puskár – –

1095 Budapest, Lechner Ödön fasor 7.

(1) 224-1700 –

–

Ÿ

Ép-Gépész Holding Kft., Lindab Kft., Hungarocontrol Zrt, ELMŰ-ÉMÁSZ, Magyar Posta, Láng Autóalkatrész Kft, Huntraco Zrt., AIMotive Kft.

✓

✓

✓

✓

233

Individuals (3) Qualysoft Holding Ltd. (97)

lászló gáspár Tamás Zimányi Zoltán Tóth

1118 Budapest, Rétköz utca 5.

(1) 889-9800 office@qualysoft.com

–

deep.erp ERP system, Iroda++ administration system, rEVOL Express billing system

Balatoni Hajózási Zrt. Príma Energia Zrt., RSM Hungary Zrt.

✓

✓

✓

✓

49

Individuals (100) –

lászló szalóki – Norbert Somkutas

1133 Budapest, Váci út 76.

(1) 461-8030 revol@revolution.hu

– SAP SE (100)

szabolcs pintér György Simon Gergely Karkiss

1031 Budapest, Záhony utca 7.

(1) 457-8333 –

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

tamás Wehring – –

1023 Budapest, Lajos utca 28–32.

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

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

tamás Wehring – –

1023 Budapest, Lajos utca 28–32.

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

Ÿ

Ÿ

5,564 2,445

–

Ÿ

1,185

Ÿ

–

Ÿ

Ÿ

Ÿ

Ÿ

NR

sap HungaRy kft.

Ÿ

35,900

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

1,036

NR

unit4 Coda HungaRy kft.

Ÿ

590

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

✓

✓

✓

✓

10

Ÿ

NR

vt-soft kft.

Ÿ

485

Ÿ

Ÿ

Ÿ

Ÿ

✓

✓

✓

✓

Ÿ

www.sap.hu

www.unit4.com/hu

www.unit4.com/hu

Special Report | 19

no. of full-time employees on july 1, 2019 of tHese, full-time softWaRe developeRs

www.saldo.hu

839 400

majoR Clients in 2018

Resale

95

softWaRe pRoduCts

Consulting

saldo Pénzügyi tanácsadó és infoRmatikai zRt.

softWaRe Related aCtivities

installation

14

Company Website

net Revenue fRom softWaRe development in 2018 (Huf mln)

Rank

Budapest Business Journal | September 6 – September 19, 2019

Ÿ

NOTES: (1) Data of business year October 1, 2017-September 30, 2018.

Ÿ

21

20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Systems integrators Consulting

mixed

HaRdWaRe

soFtWaRe

mixed

novell

WindoWs seRveR

unix

HaRdWaRe

soFtWaRe

addRess pHone email

it seCuRity

top loCal exeCutive CFo maRketing diReCtoR

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integRation oF oWn pRoduCts

opeRating type oF systems oF system integRation seRveRs

seRviCes

sap seRviCes

Company Website

total net Revenue in 2018 (HuF mln) in H1, 2019 (HuF mln)

Rank

Ranked by total net revenue in 2018

✓

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

✓

✓

✓

Magyar Telekom Nyrt. (100) –

zoltán kaszás – –

1097 Budapest, Könyves Kálmán körút 36.

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

–

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

✓

✓

✓

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

gerald grace Dániel Majubu –

2040 Budaörs, Edison utca 4.

1) 801-1500 vip@invitech.hu

Ÿ

–

–

✓

✓

✓

–

Ÿ

✓

✓

✓

✓

✓

✓

✓

✓

Bravogroup Holding Kft. (100) –

árpád kucska – –

1145 Budapest, Újvilág utca 50–52.

(1) 358-6350 info@euroone.hu

s&t Consulting HungaRy kFt.

18,874

✓

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

✓

–

✓

– S&T AG (100)

Péter Dezső Szabó Sándor Kulcsár Tímea Soós

2040 Budaörs, Puskás Tivadar út 14.

(1) 371-8000 info@snt.hu

5

ibm magyaRoRszági kFt.

16,523

Ÿ

–

–

–

–

–

✓

Ÿ

–

–

✓

–

✓

✓

Ÿ

Ÿ

– IBM Ireland Product Distribution Limited (100)

péter szalay Árpád Konc –

1117 Budapest, Neumann János utca 1.

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

6

delta CsopoRt

15,690

✓

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

✓

✓

✓

(100) –

István Brandhuber – –

1134 Budapest, Róbert Károly körút 70-74.

(1) 437-5200 info@delta.hu

7

4ig nyRt.

14,004

Ÿ

–

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

✓

✓

✓

✓

✓

Individuals (100) –

gellért jászai – –

1037 Budapest, Montevideo utca 8.

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

8

dxC teCHnology magyaRoRszág kFt.

11,522

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

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

Zoltán Czibók, Tamás Szabó-Sinka – –

1114 Budapest, Bartók Béla út 43-47.

(1) 279-8000 cegugyek@hp.com

9

dimension data magyaRoRszág kFt.

9,067

–

–

✓

✓

✓

✓

MOL, NISZ, OTP Bank, Sberbank, MÁV

–

–

✓

✓

✓

✓

✓

✓

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

istván simon Mariann Köteles László Demeter

1117 Budapest, Budafoki út 60.

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

10

inteR-ComputeRinFoRmatika zRt.

8,073

–

–

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

✓

–

✓

Inter-ComputerHolding Kft. (100) –

tamás molnár János Bence Bajzáth –

1118 Budapest, Gombocz Z. utca 12.

(1) 411-3720 info@intercomputer.hu

11

nádoR RendszeRHáz kFt.

–

–

✓

✓

✓

✓

Magyar Posta, NISZ, MLSZ, municipalities

✓

✓

✓

–

✓

✓

✓

✓

Individuals (100) –

Tibor Gombos Krisztina Mikusik Kissné Helga Szántó

1152 Budapest, Telek utca 7–9.

(1) 470-5000 info@nador.hu

12

aCCentuRe tanáCsadó kFt.

tomas volek – –

1138 Budapest, Bence utca 1.

(1) 327-3700 Info_Budapest@ accenture.com

1

t-systems magyaRoRszág zRt.

114,190

2

inviteCH iCt seRviCes kFt.

25,373

3

euRo one számításteCHnikai zRt.

20,562

4

www.t-systems.hu

www.invitech.hu

www.euroone.hu

www.snt.hu

www.ibm.com/hu

www.delta.hu

www.4ig.hu

www.hp.hu

www.dimensiondata.com

http://intercomputer.hu

www.nador.hu

www.accenture.hu

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

7,245 3,745

7,131

Ÿ

✓

✓

✓

✓

✓

–

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

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

–

✓

–

–

✓

–

–

✓

Individuals (3) Qualysoft Holding Ltd. (97)

László Gáspár Tamás Zimányi Zoltán Tóth

1118 Budapest, Rétköz utca 5.

(1) 889-9800 office@qualysoft.com

–

✓

✓

✓

✓

✓

Láng Autóalkatrész Kft., ELMŰ-ÉMÁSZ, Ép-Gépész Holding Kft., Legrand Magyarország Zrt., Huntraco Zrt., HungaroControl Zrt., Magyar Posta

Ÿ

–

–

–

✓

✓

✓

Ÿ

✓

✓

–

–

✓

–

–

–

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

Freed peter – –

1183 Budapest, Gyömrői út 99.

(1) 666-1600 sales@dunaelektronika.com

teCHWave HungaRy zRt.

2,593

✓

✓

✓

✓

✓

✓

Ÿ

✓

✓

✓

–

✓

–

✓

✓

(2) Techwave (98)

péter Fárizs Adrienn Szilvássy Attila Molnár

1138 Budapest, Dunavirág utca 2–6.

(1) 237-1730 info@techwave.hu

kÜRt inFoRmáCióbiztonsági éS ADATmenTő ZrT.

1,501

–

–

–

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✓

✓

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

Ÿ

János Kürti (12.50), Sándor Kürti (12.50), József Kmetty (75) –

sándor kürti – –

1118 Budapest, Rétköz utca 5.

(1) 424-6666 kurt@kurt.hu

17

Conet kFt.

1,363

–

✓

–

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✓

–

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Ÿ

Ÿ

Ÿ

–

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Ÿ

Ÿ

Endre Nagy (50), Endréné Nagy (50) –

endre nagy, endréné nagy – –

1147 Budapest, Fűrész utca 115.

(1) 467-2060 conet@conet.hu

18

aQuis innovo kFt.

–

–

✓

✓

✓

–

Ÿ

Ÿ

Ÿ

Ÿ

–

✓

–

Ÿ

Ÿ

Imre Takács Jnr. (100) –

József Pálné Steidl – –

2051 Biatorbágy, Tópart utca 65.

(1) 436-3000 info@aquis.hu

13

QualysoFt zRt.

www.qualysoft.com/hu

5,564 2,445

14

duna elektRonika kFt.

5,490

15

16

www.dunaelektronika.com

www.techwave.hu

www.kurt.hu

www.conet.hu

www.aquis.hu

Ÿ

Ÿ

Ÿ

516

Ÿ

4

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Socialite Jason Momoa and Tattoo Tourism in Budapest In May of this year, Jason Momoa, star of “Aquaman” and “Game of Thrones”, got a tattoo done

by Grindesign of Budapest. He is just the most high profile example of Budapestʼs latest trend, tattoo tourism, as David Holzer explains.

DAVID HOLZER

Momoa was in the city shooting a new adaptation of “Dune”, the classic sci-fi novel. The tattoo, on Momoa’s treelike forearm is supposedly the logo of On the Roam, a production company he’s involved in.

It’s actually not much of a tattoo to write home about, particularly on the giant Momoa, much-loved by the women of Hungary. Especially when you consider what’s on offer in Budapest. In this, Momoa is very much on trend.

(Full disclosure: I was an early practitioner of tattoo tourism.

The second of my ten tattoos was done on a stag weekend in Amsterdam.

I was a little the worse for wear – back then you could still get tattooed tipsy – and my own tattoo is considerably more colorful than that of the lightweight Mr. Momoa.)

But, although the Hungarian press made much of Momoa’s Budapest inking, tattoo tourism is not actually that prevalent here. Sniffing about online, I came across something called the Yeay.com Global Tattoo Index.

Yeay claims to offer a “space you can trust” in a world of fake news. According to their Global Tattoo Index, based on information provided by real people providing honest information about their lifestyle,

only

30%

of Budapest’s tattoos are tattoo tourism.

Compare this to Las Vegas, where it’s 75%.

Not everything that happens in Vegas stays in etc., etc.

This fits with what I was told by Zsolt Sárközi, owner of Dark Art Tattoo at Teréz krt 35, not far from Oktogon in the center of Budapest.

Openminded

Dark Art is rated as one of Budapest’s best tattoo parlors and has an international reputation. The studio opened in the summer 1992, not long after the change of regime in Hungary.

It was a time, Sárközi told me, when “people generally became more openminded [.…] and a lot of things that weren’t part of our lives before started to come alive. Tattooing was one of them.”

Back then, the tattoo you had done in Budapest might well not have been something you’d proudly display for photos, Sárközi said. “We didn’t really know much about tattooing itself. We made great tattoos with great ideas and meaning behind them but without any skills.”

Today, all that’s changed. Dark Art tattoos are likely to be large, colorful and extremely well executed, although that might be an unfortunate choice of word.

Although Dark Art does different styles such as the full body sleeves that usually grace the bodies of Japanese Yakuza gangsters, the studio is best known for being a leading exponent of what’s called the Hungarian style, or “fantasy based on realism” as Sárközi puts it.

No doubt there are Hungarians walking around sporting tattoos of Jason Momoa as Aquaman, Khal Drogo or Conan the Barbarian.

Although he did tell me he’s tattooed the crash-bang-wallop Hungarian band

Incidentally, trends on the rise at the moment include having your hand and ear tattooed, “ignorant” tattoos that are deliberately dumb, and what are called “imperfect sketches”. These are tatts of the kind worn by Foo Fighters front man Dave Grohl that look unfinished.

Tattoo tourists that fall into the Momoa camp usually want a memento of the place they’re visiting or to commemorate an event like a stag do or being at the Sziget Festival. These are usually small and may well be somewhere they can be hidden easily. Sárközi says that the tattoos his parlor does for tourists most often are flying birds or a Hungarian pattern. While he respects the fact that the tattoo is probably meaningful for the customer, “it’s not really a big challenge for the artist.”

Commitment Looking at the remarkable tattoos done Quality tattoo tourists travel the world

by Dark Art, you can see what Sárközi to get tattoos from big name artists, means. which can be a major money and time But does tattoo tourism say anything commitment. A tattoo artist to the stars meaningful about these interesting times like Scott Campbell of Saved Tattoo, New in which we live?

York, can charge up to $1,000 for the first On one hand, you could see it as the hour of inking. The most ornate, individual opposite of selfie mania, a reminder of the tattoos, the ones most worth having for places we’ve visited that won’t vanish into aficionados, will take hours. the cloud. Or, you could see it as part of Certain styles are also far more popular the trivializing of travel. As the world’s in certain countries than others. I’ve destination cities come to resemble each had most of my tattoos done in Spain, other more and more, why not just get a where the “Old School” style is most tattoo that proves you’ve been to Budapest fashionable. These are colorful, thickly or wherever in case you forget. lined versions of the kind of tattoos sailors would have got on shore leave in the 1950s – skulls, hearts, mermaids, Check out the work of Dark Art galleons and so on. Although they may at www.darkart.hu. well exist, I haven’t seen a single Old School tattoo parlor in Budapest.

Hooligans and his friend Zoltán Téglás, singer of Ignite, Sárközi refused to be drawn on whether he’d tattooed any celebrities of the stature of Momoa.

He also pointed out that, in tattooing, “you quickly get to learn that a celebrity is just a person because they’re the ones coming to you, asking for something from you, so they show their most humble selves.”

That makes sense. If you’re tattooing someone like Angelina Jolie, you don’t want to be thinking about who she is and the consequences of spelling the name of her latest paramour wrong.

According to Sárközi, the tattoo tourists who come into Dark Art are either into what he calls “quality tattoo tourism” or of the Jason Momoa persuasion.

22 | 4

Socialite

www.bbj.hu

Budapest Business Journal | September 6 – September 19, 2019

Why Attila Gere Never Gets Old While new wineries are shooting up in Hungary like mushrooms, reflecting the dynamism of the local wine scene, it is interesting to see how one of the more well-established names is getting along.

ROBERT SMYTH

Attila Gere (born in 1954) was one of the pioneers of the Villány region, and indeed of post-transition Hungarian winemaking in general. Visiting the 70-hectare Attila Gere estate in the sweltering temperatures of late August, the prospect of being faced head-on by a barrage of full-bodied red wines was daunting to say the least.

However, it was very welcome to be greeted with a glass of Rozé Frici 2018 – strawberries and raspberries in a glass with a refreshing dose of added bubbles. Spot on for the style sometimes disparagingly known as the “bicycle-pump” method or pompe bicyclette, whereby the carbon dioxide is added at bottling. It is a blend of Medoc Noir and Merlot.

The white version, Fehér Frici, is made in the same way as the rosé and the 2018 now has the aromatic varieties of Királyleányka, Muscat Ottonel and Sauvignon Blanc in the mix, along with the more neutral Olaszrizling to ramp up the nose. It oozes pear, pear drops and green apple, and is fresh and zesty on the palate.

Both wines cost HUF 2,490 from Bortársaság and will continue to drink well as long as the temperatures

hit

20ºC

(68ºF) and above.

While the whole Gere estate has officially been organically cultivated since 2010, it’s

only the Portugieser that is released with “organic” clearly marked on the label, as the other wines have a touch more sulfur than the minimum stipulated for organic wine.

This is purposely done for security’s sake, as a cellar of such a size cannot necessarily afford to run the risk of the wine going off or getting oxidized.

Nevertheless, there was no problem with excess sulfur blocking out the fruit in the many wines we tasted.

Joint Venture

Attila Gere also co-owns the GereWeninger winery, a joint-venture established in Villány in the 1990s with Burgenland and Sopron vintner Franz Weninger, who is Austrian (his son Franz Reinhard is now in charge of the winemaking in both Balf, in Sopron, and Horitschon in Burgenland).

A more recent co-production is the Gere & Schubert winery, which fills a gap in the local market for light and fruit-forward white wines.

Gere has built up an empire that extends beyond wine to that of grapeseed oil, and is making smart use of a by-product in the winemaking process, which can now be found in pharmacies.

Meanwhile, the 2016 vintage of Gere Kopar, the cellar’s flagship wine, is about to hit the shelves.

It’s already quite developed and it will please both those looking for a classic Kopar and those seeking subtlety over power: this wine strikes a nice balance.

The 2016 is a blend of 50% Cabernet Franc (which itself has become Villány’s flagship grape – look out also for the winery’s Villányi Franc Csillagvölgy 2017 at HUF 8,250 from the cellar’s own webshop), 40% Merlot and 10% Cabernet Sauvignon.

It was fermented partly in steel tanks and partly in wooden vats, with

More Resistant

“On transitioning over to organic growing, we noticed how the skins of the grapes became tighter and more resistant to diseases,” says Andrea Gere, Attila’s daughter, who plays a key role in the winery. Consequently, the healthier and more robust wines need less in the way of intervention, which means the winery can dispense with synthetic chemical treatments and instead use gentler organic treatments. Andrea added that the wet and cool 2010 had been a challenging vintage in which to start.

“We don’t emphasize organic growing on the label, but the point is to have healthy, pure grapes,” explains Kristóf Csizmadia, Andrea Gere’s husband.

The organic approach has certainly breathed new life into Gere Portugieser, which comes from the stunning Ördögárok vineyard. It has a bright purple color but is not very intense or viscous in appearance, suggesting lighter tannins, something that is confirmed on the palate.

It has aromas of wild strawberries and black pepper on the subtle nose and on the really spicy palate, with anise notes and lively, tongue tingling acidity, rendering this really drinkable and refreshing. It also has some complexity which is rare for this earlyripening and early-to-market grape variety.

The Ördögárok is warm with great exposure, which allows the grapes to ripen nicely, but it is also cooled by breezes that help preserve acidity and keep the air circulating to prevent certain diseases taking hold.

Horst Hummel and Wassmann, Germans making wine in Villány, also make serious Portugieser, via biodynamic (organic plus a further set of natural agricultural measures) growing and winemaking.

Something both old and at the same time new at Gere would be the Fekete Járdovány

bottles of the spicier and earthier 2016 remaining at Monarchiaborok.hu for HUF 4,990. The Gere winery also uses a local yeast developed by the Pécs Research Institute to ferment its wine.

grape – a Hungarian grape that thrived before the dreaded phylloxera wiped it out from local vineyards. This grape saw off competition from six other ancient grapes also provided from the Pécs Research Institute in trials and is now planted in the Ördögárok and Csillagvölgy vineyards,

totaling

1.2 hectares,

60% aged

in new barriques and 40% in big (10-25 hl) barrels for 16 months. It comes not only from the Kopár vineyard (note the dropping of the accent for the wine itself), but also the Konkoly, Csillagvölgy and Ördögárok vineyards, and costs HUF 8,450 at Bortársaság.

albeit with most in the former vineyard.

The wine that comes from the grape has medium tannins, unlike the blockbusting reds that Villány is best known for, and is spicy with lots of red fruit – somewhere between Kékfrankos, Kadarka and Portugieser. The 2017 costs HUF 4,016 from zwackwebshop.hu. There are a few

The Attila Gere winery will be one of a host of wineries pouring their wares at the Budapest Wine Festival in the grounds of Buda Castle that runs from September 5-8.

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Budapest Business Journal | September 6 – September 19, 2019

PRESENTED CONTENT

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Socialite | 23

Celebrity Apex: The Peak European Cruise Line Experience Celebrity Cruises promises its 2020 Europe season will be the line’s most “revolutionary” yet.

On August 22, the brand, owned by Royal Caribbean Cruises, unveiled four new longer European sailings on board its newest ship, Celebrity Apex, the second in the brand’s innovative Edge Series.

Celebrity Edge, the sister ship to Celebrity Apex, made her transatlantic voyage in November 2018.

Italy, visiting Istanbul, Turkey; Ephesus (Kusadasi), Turkey; Santorini, Greece; Mykonos, Greece; Athens, Greece; Valletta, Malta; and Barcelona, Spain; while on the 10-night Greece, Malta and Turkey cruise, guests will take in eight beautiful ports: Barcelona, Spain; Crete, Greece; Santorini, Greece; Mykonos, Greece; Bodrum, Turkey; Athens, Greece; Naples, Italy; and Rome, Italy.

The one-of-a-kind 11-night Spain, France and Italian Riviera expedition will sail a round-trip from Barcelona, Spain, calling in at Marseille, France; Monte Carlo, Monaco; Nice, France; Santa Margherita, Italy; Rome, Italy; Naples, Italy; Palma De Mallorca, Spain; and Valencia, Spain.

The accommodation and catering includes Edge Staterooms with Infinite Verandas and two-story Edge Villas with outdoor plunge pools, as well as 29 worldclass culinary venues.

Celebrity Apex will sail the sparkling Mediterranean from Southampton, beginning from April 2020, and the sun-

soaked Caribbean from Ft. Lauderdale, beginning in November 2020.

Following the ship’s Southampton debut, Celebrity Apex will offer a mini season of five sailings to European destinations, including the Norwegian Fjords and the northern coasts of Spain and Portugal.

BBJ STAFF Travelers can also experience a new tennight Capital Cities Cruise with visits “Like her industry-changing sister ship, to iconic cities including Amsterdam, Celebrity Edge, Celebrity Apex will feature Copenhagen, Oslo and Paris. an innovative outward-facing design and After Celebrity Apex’s Northern Europe transformational accommodation that mini season, she’ll spend the rest of her invites guests to take in the breathtaking inaugural summer sailing seven- to world around them,” says Lisa Lutoff-Perlo, 12-night itineraries in the Mediterranean, President and CEO, Celebrity Cruises. with visits to bucket-list destinations such “Now, with these four new and longer as Lisbon, Portugal; Istanbul, Turkey; Mediterranean sailings, guests will have Monte Carlo; Cannes, France; and more. the opportunity to enjoy the peak European European explorers looking for experience in true Celebrity style.” innovative and luxurious cruises can book Among the new sailings on board passage on board Celebrity Apex now. For Celebrity Apex are 10- and 11-night more details on the ship and the exciting Eastern Mediterranean sailings and a new new sailings being offered, visit rccl.hu/ 11-night Western Mediterranean sailing. celebrity-cruises/celebrity-cruises-hajok/ The two 11-night Greece, Malta and celebrity-apex-uj-hajo.

Turkey sailings will depart from Rome, Celebrity Apex joins her awardwinning sister ship, Celebrity Edge on the European routes. The latter was recently selected as one of TIME Magazine’s 2019 World’s Greatest Places (©2019 TIME USA LLC. All rights reserved. Used under license). This annual list, culled from editor and expert nominations from around the world, recognizes 100 destinations that are breaking new ground, leading industry trends and offering guests an experience that’s unlike any other. Also in Europe are the newly updated Celebrity Silhouette and Celebrity Constellation, featuring new staterooms and suites, new public spaces, and new luxurious designs.

An exciting addition to the European itineraries is Trieste, Italy, and the first-ever mini season of sailings from Lisbon, that includes overnight stays in this incredible city. Country-immersive sailings are also being introduced that focus on Italy and Greece, designed to The Grand Plaza acts as the epicenter of Celebrity Edge. The give guests an ever greater, in-depth Chandelier, a striking lighting feature – and art installation – experience. Celebrity will be returning rises over the Martini Bar to the ceiling three decks above. to Istanbul and Kusadasi, Turkey and

The Rooftop Garden is tended to daily by a resident horticulturist.

Oslo, Norway, featuring overnight stays in the land of the midnight sun, as well as offering overnight stays in the guestfavorite cities of Dublin, Ireland and Reykjavik, Iceland.

Celebrity’s European itineraries will offer incredible choice, with more than 90 destinations and 48 overnights, so travelers have more ways to explore Europe like never before, all while sailing on an award-winning fleet of modern luxury ships.

For more details on Celebrity’s European sailings visit rccl.hu.

Celebrity Apex: Vital Statistics • • • • • • •

Inaugural Date: April 2020 Double Occupancy: 2,910 Tonnage: 129,500 Length: 1,004 feet/306 meters Beam: 128 ft/39 m Draught: 27 ft/8.2 m Cruising Speed: 21.8 knots (about 40 kmph)