One of Europe’s largest construction companies is betting its work on the UK’s High Speed 2 railway project will be a conduit to higher profitability and a bigger share of the British market. 

Strabag SE is emerging from a troubled year of legal disputes with its third-biggest shareholder, Oleg Deripaska, the Russian billionaire sanctioned over the Kremlin’s war on Ukraine. Now, the Austrian company is trying to refocus, leveraging footholds in the UK and Canada into new business and a lasting presence that takes it beyond its core markets in central and eastern Europe.

The shift is designed to help Strabag grow operating profit margins to 6% by 2030, almost double the construction-industry average, according to Chief Executive Officer Klemens Haselsteiner. The Vienna-based company’s averaged about 4.1% in recent years.

“I prefer to set more ambitious goals even if we risk not reaching them, rather than lower targets that we can stumble across,” Haselsteiner told journalists on Monday.

It’s the first strategy being implemented by the 42-year-old CEO, who’s overseeing tunnel construction for the London section of the delayed and over-budget HS2 line. Haselsteiner took Strabag’s helm from his father in January. The family still owns a 28.3% stake.

Strabag has been challenged over the cancellation of board nomination rights held by Deripaska since an ill-fated expansion into the Russian market more than a decade ago. It is in the process of winding down its business there, and shareholders last week approved a series of capital transactions that may lower Deripaska’s stake below 25% from the current 27.8%.

Despite the lingering legal and political headwinds, the company achieved record output last year. Its order backlog also rose to a high.

Strabag’s updated strategy also places a higher priority on recycling materials, efforts that Haselsteiner said already supported the company when material shortages hit the industry during the coronavirus pandemic. The builder also intends to boost clean energy investments and reduce carbon emissions.

“The crux may be also in the company entering new business areas and focusing on more value-added segments such as climate-friendly construction, as well as technology,” said Iwona Hovenko, an analyst at Bloomberg Intelligence.

Even as surging interest rates punish commercial developers and dent residential markets, Haselsteiner said Strabag’s focus on infrastructure helps him keep calm and carry on. 

“There is definitely panic in the market,” he said. “But that will pass. This is not an issue for the next 12 to 18 months, because our order books are full.”