Bernard J. Birkett
Senior Vice President, Chief Financial and Operations Officer at West Pharmaceutical Services
Thank you, Eric, and good morning. So, let's review the numbers in more detail. We'll first look at Q2 2023 revenues and profits where we saw a low-single-digit decrease in organic net sales and a decline in operating profit and diluted EPS compared to the second 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, Q2. Our financial results are summarized on Slide 9 and the reconciliation of non-U.S. GAAP measures are described in Slides 17 to 21. We recorded net sales of $753.8 million, representing an organic sales decline of 2.5%. COVID-related net revenues are estimated to have been $20 million in the quarter, an approximate $106 million reduction compared to the prior year. Looking at Slide 10, proprietary products' organic net sales declined by 0.5% in the quarter. High-value products, which made up approximately 74% of proprietary product sales in the quarter, declined due to the reduction in COVID-related net revenues. Looking at the performance of the market units, the generics market unit delivered high-single-digit growth led by sales of Westar components and self-injection related devices. While the pharma market unit experienced mid-single-digit growth, led by Envision and Westar components as well as admin systems. And the biologics market unit saw a double-digit decline due to a reduction in sales related to COVID-19 vaccine.
Our contract manufacturing segment experienced a double-digit net sales growth, primarily driven by an increase in sales of components related to injection-related devices. Our adjusted operating profit margin of 24.5% was a 490 basis-point decrease from the same period last year. Finally, adjusted diluted EPS declined 14.6% for Q2. Excluding stock-based compensation tax benefits, EPS decreased by approximately 18%.
Now let's review the drivers in both our revenue and profit performance. On Slide 11, we show the contributions to organic sales decline in the quarter. Sales price increases contributed $43.1 million, or 5.6 percentage points of growth in the quarter, As did a foreign currency tailwind of approximately $4.4 million. Offsetting price was a negative mix impact of $61.9 million, which includes an approximate $106 million reduction in COVID-19-related net demand.
Looking at margin performance. Slide 12 shows our consolidated gross profit margin, 38.7%, for Q2 2023, down from 41.7% in Q2 2022. Proprietary products second quarter gross profit margin of 43.9% was 230 basis points lower than the margin achieved in the second quarter of 2022. The key driver for the decline in proprietary products gross profit margin was primarily unfavorable mix from a reduction in sales related to COVID-19 vaccines, offset by sales price increases and production efficiencies. Contract manufacturing second quarter gross profit margin of 15.4% was 90 basis points below the margin achieved in the second quarter of 2022, primarily due to inflationary pressures on our planned labor costs.
Now let's look at our balance sheet and review how we've done in terms of generating cash. On Slide 13, we have listed some key cash flow metrics. Operating cash flow was $307.3 million for the six months ended June 2023, a decrease of $17 million compared to the same period last year, a 5.2% decrease, primarily due to a decline in operating results. Our second quarter 2023 year-to-date capital spending was $157.5 million, $25.6 million higher than the same period last year. We continue to leverage our capex to increase our high-value products manufacturing capacity. Working capital of approximately $1.36 billion at June 30, 2023, declined by $37.9 million from December 31, 2022, primarily due to reductions in our cash balance. Our cash balance at June 30 of $796.3 million, was $98 million lower than our December 2022 balance. The decrease in cash, primarily due to our share repurchase program and higher capex, offset by our operating cash flow in the period.
Turning to Slide 8, provides a high-level summary -- sorry, turning to guidance, Slide 8 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 $2.97 billion and $2.995 billion compared to a prior guidance range of $2.965 billion and $2.990 billion. There is an estimated full-year 2023 tailwind of $20 million based on current foreign exchange rates compared to prior guidance of a tailwind of $15 million. We expect organic sales growth to be approximately 3% to 4%, unchanged from prior guidance. We are raising our full-year 2023 adjusted diluted EPS guidance to be in a range of $7.65 and $7.80, compared to our prior range of $7.50 to $7.65. Also our capex guidance, $350 million for the year, unchanged from prior guidance.
There are some key elements I want to bring your attention to as we review our guidance. We expect full year COVID-19-related sales to be approximately $60 million, unchanged from prior guidance. Net sales guidance also includes a reduction of $8 million resulting from the divestiture of the European facility that produced standard proprietary product components. Again, unchanged from prior guidance. Full year 2023 adjusted diluted EPS guidance range includes an estimated FX tailwind of approximately $0.05, based on current foreign currency exchange rate, compared to prior guidance of the tailwinds of $0.02. The updated guidance also includes EPS of $0.26 associated with year-to-date 2023 tax benefit from stock-based compensation. Our guidance excludes future tax benefits from stock-based compensation.
I would now like to turn the call back over to Eric.
