Alex Pease
Chief Financial Officer at WestRock
Thanks David. Moving to our consolidated quarterly results on slide 6. Second quarter net sales were $5.3 billion, down 2%, and consolidated adjusted EBITDA was $789 million down 8%.
Consolidated adjusted EBITDA margin was 14.9%, a decline of 100 basis points year-over-year. Price and mix positively contributed $335 million year-over-year, and lower operating costs contributed $55 million. These benefits were more than offset by lower volumes of $204 million, cost inflation of $143 million and economic downtime of $58 million. We incurred 265,000 tons of economic downtime in the quarter. Non-cash pension costs also negatively impacted consolidated adjusted EBITDA year-over-year by $40 million. As a reminder, our pension plans remain overfunded.
Turning to slide 7. Corrugated Packaging segment sales, excluding trade sales, were $2.5 billion, an increase of $308 million or 14% year-over-year. Adjusted EBITDA increased $79 million or 24% driven largely by our Grupo Gondi acquisition. Adjusted EBITDA margin, excluding trade sales, increased 130 basis points year-over-year to 16%. Pricing and mix contributed $155 million and operating costs contributed $28 million. These benefits were partially offset by inflation of $44 million, lower volumes of $36 million and economic downtime of $30 million.
In connection with our Grupo Gondi acquisition, we also moved certain of our operations into the Corrugated segment. This change was not material, and we therefore did not recast prior year amounts. For the second quarter of fiscal 2023, these operations generated revenue of $40 million and adjusted EBITDA of $7 million.
While market conditions remain challenging, we've seen improvement in April with Corrugated Packaging shipments per day increasing mid single digits for March. We remain focused on serving our customers and reducing costs. We're establishing a strong foundation for the coming years for our cost savings initiatives and portfolio optimization efforts.
Turning to the consumer packaging business on slide eight. Our consumer business has performed well despite a difficult year-over-year comparison, including strong results from our healthcare business last year. In the quarter, segment sales increased $15 million or 1% year-over-year to $1.3 billion. Adjusted EBITDA increased $13 million or 6% and adjusted EBITDA margin was 17.3%, an increase of 80 basis points year-over-year.
Strong price and mix contributed $122 million and lower operating costs contributed $21 million. These benefits were partially offset by inflation of $58 million, lower volumes of $45 million, and pension FX and other of $27 million. As previously mentioned, we realigned certain Latin America consumer converting operations into the Corrugated Packaging segment in connection with the Grupo Gondi acquisition, and we did not restate our segments.
Normalized for the realignment, Consumer Packaging revenue grew 4% and adjusted EBITDA grew 10% year-over-year. Quarter end backlogs in our consumer business remain steady, while we continue to focus on capturing new business and growing our plastic replacement solutions. As David indicated, we're now targeting over $400 million in revenue from plastic replacements in fiscal 2023.
Turning to slide 9. Global Paper segment sales decreased $370 million or 24% year-over-year to $1.2 billion. Adjusted EBITDA declined 39% to $187 million, with adjusted EBITDA margin declining 410 basis points to 16%. We continue to face soft demand in difficult year-over-year comparisons in our Global Paper business.
While adjusted EBITDA declined year-over-year, it was still 17% above the second quarter of fiscal 2021. Price and mix contributed $63 million more than offset by lower volumes of $105 million, inflation of $35 million and economic downtime of $27 million. Additionally, sales to Grupo Gondi are now eliminated from our Global Paper results following our acquisition. Results were also negatively impacted by unplanned downtime at several of our mills. We're actively addressing these issues and deploying capital to improve our reliability and productivity.
Volume in our Global Paper business continues to be affected by lower market demand for our products, as well as higher inventory throughout the supply chain. We're also seeing the effect of published price changes flowing through our results with year-over-year moves in paperboard more than offsetting the negative moves in containerboard and craft paper.
In this environment, we're continuing to prioritize margin over volume. Over time, our portfolio optimization strategy will enable us to better serve our strategic customers, while increasing vertical integration and reducing our exposure to external paper sales. Despite the lower overall volumes driven by current market dynamics, we continue to win new business where customers value our diverse portfolio and product offering.
As David outlined, we're accelerating our portfolio actions and focusing on strategic customer relationships in our most attractive markets. Our goal is to increase our vertical integration and reduce volatility from external paper sales.
Next, our distribution results are on slide 10. We faced a difficult year-over-year comparison due to last year's large healthcare order in the second quarter. Segment sales decreased 15% year-over-year to $307 million, and adjusted EBITDA decreased 67% to $9 million. Results were negatively impacted by lower volumes of $24 million and inflation of $3 million, partially offset by lower operating costs of $5 million and positive price and mix of $3 million. Normalized for last year's large healthcare order, revenue declined 3% and adjusted EBITDA grew 34% compared to the prior year. Looking ahead, we remained focused on driving commercial excellence and unlocking additional cost savings in our distribution business.
We generated $36 million of adjusted free cash flow during the quarter, down $176 million driven by higher capital expenditures. We continue to expect fiscal year 2023 adjusted free cash flow of approximately $1 billion, driven primarily by working capital improvements and lower capital expenditures. We ended March with net leverage of 2.45 times. Looking ahead, we remain focused on returning our leverage to our target range of 1.75 times to 2.25 times.
Turning to guidance on slide 12. We expect a sequential volume improvement offset by the flow through of previously published price decreases. Our forecast for third quarter consolidated adjusted EBITDA is between $650 million to $750 million, and adjusted EPS is between $0.30 and $0.60 a share.
Some assumptions behind our sequential outlook include favorable costs driven by natural gas, down approximately 30%, higher cost for recycled fiber, moderately lower costs in virgin fiber, chemicals and freight, an effective adjusted tax rate of between 24% and 26%, and approximately 257 million diluted shares outstanding. We're planning 121,000 tons of scheduled maintenance downtime across our system in the third quarter.
Turning to slide 13 and our full year cost assumptions. For our full fiscal year 2023, we expect a favorable year-over-year EBITDA benefit from lower energy prices of between $40 million and $50 million, primarily related to lower natural gas prices. In terms of fiber, we expect a benefit of between $250 million and $300 million. We're expecting negative impacts of $70 million to $90 million from chemicals inflation, and $25 million to $45 million from higher freight costs.
Lastly, we expect a headwind of between $450 million to $500 million from wages, benefits, and other inflation, as well as $160 million from non-cash pension expenses that we've previously discussed.
During the second quarter, we incurred a non-cash goodwill impairment linked to past acquisitions, driven in part by the impact of soft demand, pricing pressure, and elevated inflation on our longer term forecast. Despite this challenging macroeconomic environment, we remain focused on our transformation initiatives and are confident in our ability to deliver $1 billion in cost savings by 2025. In the event market conditions stabilize and the relationship between price and inflation returns to more normal levels, we believe our 2025 goals remain attainable.
As you would expect, should current macroeconomic conditions persist, where we see continued price degradation and significant inflationary effects, the goals would be significantly under pressure. This quarter's strong results in a challenging environment demonstrate the progress we're making in driving cost savings and continuing to optimize our portfolio.
Now I'll turn it to David to conclude before we move to Q&A.
