Heidelberg is looking to use its strategic partnership with Munich Re to significantly increase the volume of subscription business.
Partnership through digitization leads to growth on all sides.
Heidelberger Druckmaschinen AG (Heidelberg) is looking to further increase the volume of business with its digital usage-based subscription model by entering into a strategic partnership with the Munich Re insurance group. The two companies have signed a cooperation agreement for this purpose. From the beginning of 2022, subscription contracts are to be offered on selected markets in collaboration with Munich Re, a leading provider of (re)insurance and insurance-related risk solutions. The subscription portfolio that Heidelberg has successfully established on the market enables customers to use printing presses based on an “as a Service” model. These customers pay a fixed monthly rate for an agreed basic print volume (pay per outcome) plus a fixed price for each additional printed sheet. The model also includes consumables and consulting, software/IoT, and technical services. Munich Re takes over the investment of the machine, thus enabling clients to modernize their production capacities without capital-intensive upfront investments and to achieve better cost forecasts and transparency.
With this cross-industry partnership, the two companies are pooling their strengths. As a global market leader for commercial and industrial printing presses, Heidelberg is contributing its long-standing market and mechanical engineering expertise, together with experience from its subscription model. Munich Re, meanwhile, is providing various Group offerings such as financing, risk, and IoT solutions for this model. This arrangement means customers still have Heidelberg at their side as a strong partner. For its part, Munich Re will benefit from an established “Equipment as a Service” (EaaS) model, access to established markets, a strong brand presence, and trust in the Heidelberg brand. The portfolio for digital business models is to be expanded jointly.
“We’re proud to have gained Munich Re as a strategic partner. It shows us we’re on the right track with our digital business models. Together with Munich Re, we’ll be able to fully tap the global market potential of our subscription solutions. We’re just getting started, but the future belongs to “Equipment as a Service” and this collaboration will significantly increase our volume of business in this area,” says Heidelberg CFO Marcus A. Wassenberg. “Munich Re is impressed by the Heidelberg EaaS model and sees usage-based business models as a challenge that offers huge potential for growth. Its existing experience in the area of digital business models and the combination of risk solutions, IoT, and financing make this company the perfect partner for Heidelberg,” he adds.
"The cooperation with Heidelberg underscores our claim to open up new business areas beyond ordinary insurance products with cross-industry partnerships. By bringing together technological excellence and smart solutions for networked production, we use our unique expertise to support manufacturing companies in expanding their digital business. Their end customers in turn benefit from flexible, risk-free as-a-service solutions from a single source for their own operations," says Torsten Jeworrek, member of Munich Re's Board of Management.
The subscription model’s focus on automation and boosting performance is increasingly making it the model that many customers are looking to for the future. Numerous companies are recognizing the potential of subscription models on the global printing market to an ever greater extent and are keen to invest in this trend. The global partnership with Munich Re underlines this and puts Heidelberg in a position to offer the subscription model to far more customers in the future.
“Customers who have opted for the Heidelberg subscription model are seeing a clear improvement in their overall equipment effectiveness thanks to some significant performance enhancements in terms of makeready times, printing speed, paper waste, and the overall productivity of their processes,” comments Heidelberg CEO Rainer Hundsdörfer. “It’s evident that partnership through digitization leads to growth on all sides,” he emphasizes.
With its data-based portfolio of Print Site Contracts, Heidelberg is gradually expanding its contract business thanks to repeat sales. Print Site Contracts range from a Lifecycle contract that covers service operations and consumables all the way through to the all-inclusive subscription model. Heidelberg is using these contracts to drive the digitization of the entire industry with a view to improving efficiency, boosting productivity, and generally being fit for the future.
“In the medium term, Heidelberg is planning to expand its contract business as a whole to make up around a third of total sales. The partnership with Munich Re is a key milestone and the perfect way to achieve this goal faster,” concludes Hundsdörfer.
Figure 1: Heidelberg is looking to use its strategic partnership with Munich Re to significantly increase the volume of subscription business.
Figure 2: Partnership through digitization leads to growth on all sides.
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This press release contains forward-looking statements based on assumptions and estimations by the Management Board of Heidelberger Druckmaschinen Aktiengesellschaft. Even though the Management Board is of the opinion that those assumptions and estimations are realistic, the actual future development and results may deviate substantially from these forward-looking statements due to various factors, such as changes in the macroeconomic situation, in the exchange rates, in the interest rates, and in the print media industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no warranty and does not assume liability for any damages in case the future development and the projected results do not correspond with the forward-looking statements contained in this press release.
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