Jorge M. Gomez
Executive Vice President and Chief Financial Officer at DENTSPLY SIRONA
Thanks, Don. Good morning, and thanks for joining us. As a reminder, my remarks today will be based on non-GAAP financial results, unless otherwise noted. Please refer to the reconciliation tables at the back of the press release and slides both of which are posted in the Investors section of our website. As Don said, our second quarter performance rounds out a strong first half of our fiscal year. In Q2, we delivered sequential quarterly revenue growth in both consumables and T&E. We also posted organic sales above pre-COVID levels in 2019. Let's look at Q2 in more detail. Versus last year, the business delivered organic revenue growth of 104. 6% and reported growth of 117.3%. Compared to the second quarter of 2019, reported sales grew 5.7% and organic sales grew 3.1%. Both segments also grew versus Q2 2019. This performance against the 2019 baseline confirms the steady recovery trend we have seen in 2021. Gross profit was $626 million or 58.7% of sales. This strong outcome reflects the continuation of a favorable mix similar to Q1 as well as the overall portfolio optimization work we have done to focus on higher growth, higher-margin businesses. We're also seeing some challenges from a supply chain cost perspective, and our teams are working diligently to address them.
Before I start discussing SG&A numbers, I would like to remind you that we now report R&D spend separately from SG&A. As we indicated last quarter, we began to ramp on planned SG&A investment spend in the second quarter. We tempered certain investments during the height of COVID but we are now accelerating projects as the market further normalizes. We are increasing investments in sales and marketing to support our short- and medium-term growth plans in clear aligners, implants and digital capabilities. Sequentially, SG&A increased in absolute dollars but remained relatively flat as a percent of sales. Versus the prior year quarter, SG&A as a percent of sales declined 12.6 % points to 34.4%. Spending on R&D was up 122.2% in the quarter to $40 million. We expect this level of spend to continue as we are committed to delivering innovation and great solutions to our customers. We are taking a disciplined approach to ensure alignment with our strategic priorities and track return on R&D investment.
Operating profit was $219 million versus a loss of $42 million last year. The business delivered an operating margin of 20.5%, representing continued margin expansion from the realized benefits of our restructuring program. At the same time, we have been able to make meaningful investments in our business to fund growth initiatives. Net interest and other expense was flat versus last year. The non-GAAP tax rate in the second quarter was 23.9%, a decrease compared to 26.8% in the prior year quarter, which was a function of the changes in the US versus non-US pre-tax income. Non-GAAP EPS was $0.71 versus a loss of $0.18 in the prior year quarter. Moving to segment performance. Versus the second quarter of 2020, Consumables and Technologies & Equipment posted organic growth of 135.3% and 85.2%, respectively. Both segments posted strong growth across all product categories. Consumable sales were $445 million, an increase of 138% versus the prior year. Growth was strong across all regions and in all categories, most notably within the endo and rest parts of our portfolio, which represent strategic priorities for our business.
Additionally, the rebound in the preventative business, particularly in the US, continued in Q2. The consumables market has been resilient, and our team is executing well through the recovery. Currency favorably impacted consumables by 11.2%, offset by a reduction of 8.5% due to divestitures and discontinued products. Moving on to Technologies & Equipment segment results. T&E sales grew 104.6% versus the prior year, with strong growth coming from all regions and product categories. The growth was driven by digital dentistry and equipment and instruments, which grew well in excess of 100%. The T&E segment also includes our health care business, which show a smaller pandemic-related impact than the dental business in Q2 2020 and resulting in a less significant year-on-year growth. Within T&E, the launch of our new Axeos imaging unit continues to go very well. We're also seeing a strong momentum in digital dentistry with digital adoption and upgrade cycles fueling growth for Primescan. Our clear aligners franchise performed very well in the quarter. Sales growth is strong, and we are confident in the team's ability to deliver on the $300 million 2021 exit run rate shared previously. This quarter, we also announced the acquisition of Propel Orthodontics and a strategic partnership with 3Shape, further complementing our clear aligners offering. We expect to see the benefits from these two initiatives starting in 2022. Currency favorably impacted sales by 10.4% as well as a benefit from acquisitions of 19% and offset by a reduction of 10% due to divestitures and discontinued products.
Now turning to financial performance by region during the second quarter. US sales were $366 million, a growth of 179.4% versus last year. Organic sales growth was 145.8%. We were pleased to see dental sales volumes return close to normal levels in both segments and across all product categories. European sales were $431 million, a growth of 99.5% versus last year. Organic growth was 91.8% compared to the prior year. Similar to US sales, all areas in consumables and T&E rebounded well from the low point last year. Rest of the World sales were $270 million, a growth of 87.5% versus last year. Organic sales growth was 86.2%, reflecting the recovery in demand across consumables and T&E. The Asia Pacific region, in particular, has been an area of continued growth for our business. Next, I'd like to cover cash flows. In the second quarter of 2021, our operating cash flow was $214 million, a $39 million improvement versus last year. The company finished the second quarter with cash on hand of $352 million and committed credit facilities of another $744 million.
On a year-to-date basis, we deployed more than $241 million to fund strategic acquisitions, including Datum and PROPEL Orthodontics. We also returned a total of $134 million to shareholders through dividends and share buybacks. During the second quarter, we increased the quarterly dividend by 10%. The board also authorized an increase to our share repurchase program bringing the total amount to $1 billion. This is inclusive of the $260 million we had remaining from our previous authorization. Now let me provide an update on our financial expectations for 2021. We completed a strong first half of the year. We believe the healthy demand will continue through the second half of the year driven by positive momentum in patient confidence and procedure volumes with the vaccine rollout. Based on that, we are reaffirming our outlook for fiscal 2021. We also expect non-GAAP EPS to be close to the top end of the $2.75 to $2.90 range that we provided last quarter. Here are a couple of considerations with respect to our outlook. We have updated our assumption for the euro-US dollar exchange rate for the remainder of the year from $122 million to $118 million. We estimate the impact from this change to be a reduction in projected earnings of approximately $0.05 in the second half of the year.
Second, this full year outlook includes commitments on investment spend that will be incurred over the remainder of the year. We will continue to operate with a high degree of operational discipline and we'll manage SG&A expenses in line with the pace of the commercial activities. Our key 2021 planning assumptions are listed within the supplemental materials posted on the Investors section of our website. There are two risks to this outlook that are worth highlighting. COVID-19 and ongoing supply disruptions. We are watching closely how the situation evolves, especially considering the increased number of cases in some countries and the actions taken by governments to reinstate certain restrictions. Before I turn the call back to Don, we would like to share a quick update on our efforts around ESG. During the second quarter of 2021, we published our sustainability fact sheet and environmental scorecard. They are available for review on the Sustainability page of our website. Additionally, in May, we announced a global partnership with FDI, the World Dental Federation as one of five industry founding partners to lead the new sustainability in density initiative. Also, we are planning to publish our sustainability report in Q3. As we look forward in our ESG evolution, there are a few guiding principles we are keeping in mind. First, we believe purpose and economic value intersect in a clear way in our business. Second, we want to be transparent about our progress by increasing the disclosure of key ESG metrics. And third, we are measuring and analyzing our EST data and we'll make sure we adhere to high standards of data integrity. With that, I will now turn the call back to Don.