Bernard J. Birkett
Senior Vice President and Chief Financial and Operations Officer at West Pharmaceutical Services
Thank you, Eric, and good morning. We'll first look at Q1 2023 revenues and profits, where we saw low single-digit organic sales growth and a decline in operating profit and diluted EPS compared to the first quarter of 2022. I will take you through the drivers impacting sales and margin in the quarter as well as some balance sheet takeaways. And finally, we will provide an update to our 2023 guidance. First up, Q1. Our financial results are summarized on Slide 10, and the reconciliation of non-U.S. GAAP measures are described in Slides 17 to 20. We recorded net sales of $716.6 million, representing organic sales growth of 2.3%. COVID-related net revenues are estimated to have been approximately $23 million in the quarter, an approximate $88 million reduction compared to the prior year.
These net revenues in 2022 include our assessment of components associated with vaccines, treatment and diagnosis of COVID-19 patients, offset by lower sales to customers affected by lower volumes due to the pandemic. Looking at Slide 11, Proprietary Products organic net sales remained flat in the quarter. High-value products, which made up more than 70% of Proprietary Product sales in the quarter, declined by low single digits due to the reduction in COVID-related net revenues. Looking at the performance of the market units, the Generics market unit delivered high double digits growth led by sales of Westar components, while the Pharma market unit experienced low double-digit growth led by Envision and Westar components as well as Admin Systems.
And the Biologics market unit saw double-digit -- saw a double-digit decline due to a reduction in sales related to COVID-19 vaccine. Our Contract Manufacturing segment experienced double-digit net sales growth in the first quarter, primarily driven by an increase in sales of components related to injection-related devices. Our adjusted operating profit margin of 23% was a 340 basis point decrease from the same period last year. Finally, adjusted diluted EPS declined 13.9% for Q1. Excluding stock-based compensation tax benefits, EPS decreased by approximately 16.1%. Now let's review the drivers in both our revenue and profit performance. On Slide 12, we show the contributions to organic sales growth in the quarter.
Sales price increases contributed $38 million or 5.3 percentage points of growth in the quarter. Offsetting price was a negative mix impact of $21.3 million, primarily due to a reduction in COVID-19-related net demand and a foreign currency headwind of approximately $20.1 million. Looking at margin performance, Slide 13 shows our consolidated gross profit margin of 37.9% for Q1 2023, down from 39.5% in Q1 2022. Proprietary Products first quarter gross profit margin of 42.5% was 90 basis points lower than the margin achieved in the first quarter of 2022. The key drivers for the decline in Proprietary Products gross profit margin were unfavorable mix from a reduction in sales related to COVID-19 vaccines and continued inflationary pressures on our planned costs, including labor, raw materials and overheads. These factors were partially offset by sales price increases and production efficiencies.
Contract Manufacturing first quarter gross profit margin of 17.6% was 250 basis points below the margin achieved in the first quarter of 2022, primarily due to mix of products sold. Now let's look at our balance sheet and review how we've done in terms of generating more cash. On Slide 14, we have listed some key cash flow metrics. Operating cash flow was $138.1 million for the three months ended March 2023, a decrease of $13.1 million compared to the same period last year, an 8.7% decrease, primarily due to a decline in operating results. Our first quarter of 2023 year-to-date capital spending was $82.1 million, $16.3 million higher than the same period last year. We continue to leverage our capex to increase our high-value product manufacturing capacity within our existing facilities in the U.S., Germany, Ireland and Singapore. Working capital of approximately $1.4 billion at March 31, 2023, remained consistent from December 31, 2022.
Our cash balance at March 31 of $886.3 million was $8 million lower than our December 2022 balance. The decrease in cash is primarily due to our share repurchase program and higher capex, offset by operating cash flow for the first quarter. Turning to guidance, Slide nine provides a high-level summary. We are updating our full year 2023 net sales guidance and expect net sales to be in a range of $2.965 billion to $2.99 billion compared to our prior guidance range of $2.935 billion to $2.96 billion. There is an estimated full year 2023 tailwind of $15 million based on current foreign exchange rates compared to prior guidance of the 2023 headwind of $30 million. We expect organic sales growth to be approximately 3% to 4%, unchanged from prior guidance. We expect our full year 2023 adjusted diluted EPS guidance to be in a range of $7.50 to $7.65 compared to a prior range of $7.25 to $7.40.
Also, our capex guidance is $350 million for the year, unchanged from prior guidance. There are some key elements I want to bring your attention to as you review our guidance. We expect full year COVID-19-related sales to be approximately $60 million compared to prior guidance of approximately $85 million. Net sales guidance also includes a reduction of $8 million, resulting from an expected divestiture of a European facility that produced standard Proprietary Product components. Full year 2023 adjusted diluted EPS guidance range includes an estimated FX tailwind of approximately $0.02 based on current foreign currency exchange rates compared to prior guidance of a headwind of $0.11.
The updated guidance also includes EPS of $0.15 associated with first quarter 2023 tax benefits from stock-based compensation. Our guidance does not include potential future tax benefits from stock-based compensation. I would now like to turn the call back over to Eric.
