Heidelberg’s Subscription model explained

Hampton Printing is the first UK company to install a new press through the Heidelberg Subscription. It will not be the last. Heidelberg is now on the verge of relaunching the model following a funding deal with insurance giant Munich Re, a corporation that has a track record in ‘equipment as a service’. This changes the dynamic for Heidelberg and for printers that are attracted to this means of funding.

Previously any risks through the funding had to be take on the Heidelberg balance sheet, meaning that the supplier had in turn to be careful about which companies it offered Subscriptions to. 

Consequently there are no others in the UK that have the full Subscription model. As yet, Ryan Miles, managing director of Heidelberg UK, says that his territory will be among the first regions to be part of the Munich Re roll out. The training has been taking place with workshopping sessions and seminars to make sure the team is up to speed.

“We have a high level of interest,” says Miles. “It has been a slow pace until now because we had to handle the balance sheet funding. Now we have Munich Re to take that on, the ground work has been done and we are ready to take this to market.”

While the Subscription model was initially intended for funding of a press, it can and is used to fund the purchase of consumables on an impression count basis. “We have a few of those running in the UK and they are working really well for customers,” he says.

This can appeal to customers that have funded a new press through a more conventional finance agreement. It can also be used for an existing press. “What is included has opened up a lot since we first started. We can be a lot more flexible with the package. It’s a lot more a la carte and less menu fixe. Printers can choose to leave out elements, plates, for example, if they already have a good deal in place.” A promise that Heidelberg will help improve the efficiency of the print business is a key part of the package; when Heidelberg is paid by impression count, so increasing the customer’s impression count is in its interests.

The appeal of the Subscription is that it is off balance sheet funding so does not affect the printer’s ability to invest in other equipment. And it is about a predictable cost for the business. As the uncertainty in the market continues this may be welcome. “There are some clear advantages for some customers. Others are very tied into owning the prime asset. We know it’s not for everybody. It comes down to how each customer wants to structure the balance sheet,” Miles says.

There may even be advantages from not owning the press because at the end of a five-year deal, the chosen configuration may no longer have the appeal when new. The market may have moved on.