To be an enterprise of value to our customers and to society
I would like to begin by expressing our sincere gratitude for your lasting support.
I am sure that many of you were thrilled by the performance of the Japanese national teams competing in the Soccer World Cup last fall and the World Baseball Classic this spring. What's more, with the classification of the coronavirus as a Category V infectious disease under the Infectious Disease Law, Japan's cities and towns are steadily regaining their liveliness and vitality. Now, as we leave the prolonged coronavirus pandemic behind and head into the post-pandemic era, the business environment has a new and different playing field.
With the support from our shareholders, on June 23 Duskin brought its 61st annual shareholders meeting to a successful conclusion. As we move forward, all of us in Duskin management remain committed to meeting your expectations by executing our management duties with renewed spirit.
On November 16, 2023, Duskin will celebrate the 60th anniversary of its founding. I therefore want to once again express our profound gratitude to you and to our business partners including our franchisees and other stakeholders for supporting us on our journey so far.
Since our founding, we have operated our businesses to achieve our ultimate goal of "unifying business and morals," which in today's terms is the realization of simultaneous enhancement of both social and economic values. As we move ahead, every Duskin executive and employee is united on ensuring that Duskin continues to be a company of value to all.
The second half of the fiscal year ended March 31, 2023 is characterized by the steady relaxation of behavioral restrictions in response to the coronavirus pandemic and by changes in the business environment, such as surging energy and raw material prices. Under such circumstances, we focused on expanding sales and executing measures aimed at resolving medium-term issues. Consolidated sales increased compared to the previous fiscal year, thanks mainly to higher Food Group sales driven by the healthy sales of Mister Donut. Despite this result, however, every profit measure recorded a decline as originally projected. The main reason for this was the start of our initiative to attach RFID electronic tags to mops and mats. Taking into account a shortage of labor in the future, this initiative positioned as the most important strategic investment of the Medium-Term Management Policy 2022 is being implemented.
Executing the Medium-Term Management Plan 2022 requires training personnel capable of identifying and solving problems on their own initiative, and with that in mind, at the start of the fiscal year, we established a department called Continuous Process Improvement. This new department takes the lead in spurring our executives and employees to raise awareness of the importance of acting on their own initiative, and we are making solid progress toward fulfilling the objectives of the Medium-Term Management Policy 2022 for the fiscal year ending March 31, 2024 as well.
For the initiative to attach RFID electronic tags started in the previous fiscal year, our goal during the current fiscal year ending March 31, 2024 is to complete attachment to a total of 31 million mats and mops in distribution in unison with making progress on smart factory conversion so that we can reap the benefits of this effort as soon as possible. Moreover, during the current fiscal year, we plan to concentrate on increasing the number of Direct Selling Group customers. Along with offering better comprehensive hygiene management solutions, we are finally ready to introduce the dedicated sales team approach — which we verified at company-owned units and affiliated companies during the previous fiscal year — to our franchisees and begin using the approach to increase opportunities for direct interaction with customers. Meanwhile, the Food Group will concentrate on a product strategy aimed at meeting customer needs in Japan, while overseas we will continue to strengthen our presence, with Southeast Asia as our main focus.
In addition, we are exploring ways to contribute to solving societal issues and create social value through M&A and venture capital investment.
When we turn our attention to society, we see that the efforts to decarbonize, to build a recycling society and to build a society in harmony with nature are all rapidly gaining momentum. Duskin as well is expected to contribute to the effort to find solutions to problems related to these social issues, and we therefore need to make progress on the already formulated and announced Duskin Green Targets 2030. In fact, we are making solid progress toward achieving our targets, which include reducing fossil fuel-based plastics, reducing Food Group-related food loss and waste and increasing renewable energy use.
Our Medium-Term Management Policy 2022 initiatives represent the final phase of our ONE DUSKIN long-term strategy. All of the businesses in the Duskin Group work together to offer a friendly and welcoming response to our customers, which we believe is exactly what our shareholders expect of us.
In closing, thank you once again for your continued support.