So — and, to follow-up on my last post, I decided to figure out just how many billion Russian Roubles of new net income Schering-Plough will need, in order to “fill the gap” in the United States.
Well, then, if we assume Vytorin/Zetia US market share erosion gets no worse in 2008 — that is, it stays about 30 percent below 2007 levels, for the full year 2008 (and perhaps I am being too generous here, I know) — Schering will have an Equity Income 2008 “hole” of about $614.7 million on its 2008 income statement (or, 30 percent of the $2.049 billion of 2007 Equity Income it reported on its last Form 10-K).
The Russian Rouble — thus far in 2008 — has traded between 23.50 and 26.20 Roubles to the Dollar (it opened 2008 at 24.50 Roubles to the Dollar). Said another way, Schering-Plough will need between 23 and 26 Roubles for EACH US Dollar it is “in the hole“. so, Fred’s math will never work:
Yep — Mr. Hassan needs between 16 and 14 BILLION Russian Roubles of Equity Income in 2008 alone. To get that income, he’ll likely need three times as much — in Rouble-denominated sales (very-generously assuming he’ll garner 33 percent margin in Russia). . . .
Said another way, he’ll need between 48 and 43 billion Roubles of new sales in Russia, to generate the above equity income levels:
Two words, here: “No way!” — and, “No how“.