Introduction
Rockwool A/S is a pure-play insulation giant currently trading around historic lows – largely driven by asset seizure by the Russian government. As the market is fixated on this one headwind, Rockwool still enjoys significant tailwinds, such as the Energy Performance of Buildings Directive (EPBD).
The EPBD states that; “85% of buildings in the EU were built before 2000 and 75% have poor energy performance (…) Yet the annual energy renovation rate remains very low at 1%” (European Commission, 2026). This low hanging fruit, of increasing energy efficiency, is a driver for continued growth.
Profitability & Valuation
Rockwool currently has a 10-year and 5-year revenue CAGR of respectively 5,8% and 11,9% (Sheet, 2026).
Furthermore, Rockwool had a 10-year and 5-year CAGR income growth of 13% and 28%, partly driven by increased profitability.
– Ratios Illustrated underneath.
(Marketscreener, 2026) (Sheet, 2026).
These ratios are all stronger than competitors’, though attributable to differences in product mix. A proper comparison requires further details in profitability within glass and stone wool.
Competitor ratio “analysis”:
(MarketScreener, 2026) (Sheet, 2026).
Kingspan trades at a PE at 19.3 and Saint-Gobain 13.5. Thus, Rockwool is trading at a discount to Kingspan and on par with Saint-Gobain. Note: Owens Corning is expecting a loss in 2025, but a 2026e PE at 12.2.
Though analyst expectations for future growth creates a different picture:
(MarketScreener, 2026) (Sheet, 2026).
Finally, Rockwool trades at a 32% discount to their five-year average of 19.9 – Assuming a 2025e PE at 13.5.
PE development:
(Rockwool Russia, 2026) (MarketScreener, 2026) (Sheet, 2026).
Rockwool continues to invest in capacity and optimizing operations – expressed by their high capex:
(Marketscreener, 2026) (Sheet, 2026).
Thus, Rockwool is essentially plowing all their earnings into new factories (Five-year average = 90%).
Competitive advantages & MOATS
Rockwool’s insulation products are enjoying moats – as traditional glass wool is combustible and thus prone to fires. This makes Rockwool the preferred choice in constructions such as timber and datacenters. While glass wool is a cheaper product, it also has a shorter lifespan – thus stone wool is essentially a quality product at a premium price.
The asset seizure in Russia will contribute negatively to their earnings growth and margins. Some investors (and Rockwool) have been worried about giving a foreign company access to Rockwool technology – while this is a key risk, it might be overdone due to the logistics of insulation products. These voluminous products are on average transported for around 400 kilometers with no products crossing borders (Rockwool, 2025). This essentially creates a geographical moat while protecting against some geographical tensions such as tariffs.
In general retail stores are in an attractive competitive situation, as they have more leverage to demand a lower price from suppliers. This might pressure margins in the longer terms, depending on Rockwool’s pricing power and channel management. Strong brands and quality products, demand better terms for negotiating prices – though, I cannot estimate the development of Rockwool and competitor’s product development – But, Saint Gobain (Isover) has developed a chemically engineered glass wool product that is lighter, cheaper and fire resistant – but on the downside more fragile and less soundproof.
Finally, it is capital intensive to build the factories that make stone wool and further energy intensive to produce stone wool. Expenditures serve as a moat, as the high upfront costs serve as barriers to entry.
Rockwool products
Rockwool’s product mix is collected in two segments – insulation (79% of revenue) and systems (21% of revenue) (Rockwool, 2025, pp 17). Both segments are operating at an EBIT margin of 14-15% (Rockwool, 2025, pp 26). Insulation is insulation (stone wool) and systems are: Rockfon (panels for acoustic), Rockpanel (façade panels), Grodan (for roots, agriculture) & Lapinus (additive for brake pads etc.). The size of the business unit is in respective order (Rockwool, 2025, pp 21).
Conclusion
I expect Rockwool to be an attractive investment, largely attributable to its MOATS and sector-wide tailwinds. Furthermore, companies with such a strong track record and profitability often cost pe 20+.
This valuation can likely be attributed to short-term headwinds (asset seizure) and low analyst expectations for near-term earnings growth.
This investment is a textbook example:
– Double digit earnings growth
– Low debt
– Strong and expanding margins (though a small setback is expected)
– Solid tailwinds (…)
– Shareholder friendly
Though risks persist:
– Vulnerability to energy supply (regulation)
– Product engineering from competitors (Isover Ultimate)
– High depreciation of assets requires continuous investments in factories (overlooked in the price to earnings ratio)
Disclaimer
I am heavily invested in Rockwool, at around 21% of my total portfolio. I can have made mistakes. I am not a licensed financial advisor. I cannot advocate for investing in this company.
Mental Notes / Future research
Price elacity of Rockwool products from high salaries in construction? One Up Wallstreet states need for continuos investments as unfavourable. Need stronger comparison of competitors (Kingspan & Isover especially). Estimation of growth based on factory expansion and new factory construction (as i recall from earningscall there are 6 projects on the way).
Sources
MarketScreener, 2026: https://www.marketscreener.com/
European Commision, 2026: https://energy.ec.europa.eu/topics/energy-efficiency/energy-performance-buildings/energy-performance-buildings-directive_en
Rockwool, 2025: https://www.rockwool.com/siteassets/investors/financial-reports/2025/annual-report-2024.pdf
Rockwool Russia, 2026: https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=7874390&lang=en-GB&companycode=dk-rock&v=
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