Greg Lovins
Senior Vice President and Chief Financial Officer at Avery Dennison
Thanks, Mitch and hello everybody. We delivered another strong quarter with adjusted earnings per share of $2.14, up 12% over prior year, and up 29% compared to 2019, driven by significant revenue growth and strong margins. Sales were up 17% ex-currency and 14% on an organic basis compared to prior year, driven by strong volume across the portfolio and higher prices. We also delivered strong growth compared to 2019 with organic sales up 10% versus two years ago.
As Mitch mentioned, our supply chains remain tight and input costs have continued to rise. Both raw material and freight inflation were above our expectations for the quarter and we've continued to [Technical Issues] cost rise as we enter the fourth quarter. We continue to address the cost increases through a combination of product re-engineering and pricing, and have announced additional price increases in most of our businesses and regions across the world. Despite the impact of inflation, supply chain disruptions, and the headwind of last year's temporary cost reduction actions, we delivered a strong adjusted EBITDA margin of 15.4%, down 70 basis points from last year and up 120 basis points compared to 2019.
Turning to cash generation and allocation. Year-to-date, we've generated $639 million of free cash flow, up over [Phonetic] $251 million in the third quarter. That's up significantly compared to previous years, driven by our strong net income growth and working capital productivity. And we closed the Vestcom acquisition in the quarter for a total purchase price of roughly $1.45 billion. To fund the acquisition, we used the net proceeds from an $800 million senior note offering in August, along with cash in commercial paper.
Additionally, in the first three quarters of the year, we returned a total of $290 million in cash to shareholders, through $164 million in dividends and the repurchase of over 700,000 shares at an aggregate cost of $126 million. Our balance sheet continues to be strong with a net debt to adjusted EBITDA ratio of 2.3 at quarter end, at the bottom end of our long-term target leverage range. This gives us significant capacity to continue the disciplined execution of our capital allocation strategy.
Now turning to the segment results. Label and Graphic Materials sales were up 15% ex-currency and 14% on an organic basis, driven by strong volume and roughly 5 points from higher prices. Compared to 2019, sales were up 11% on an organic basis. Label and Packaging Materials sales were up roughly 15% organically, with strong volume growth in both the high-value product categories and the base business. Graphics and Reflective sales were up 11% organically.
And looking at the segments' organic sales growth in the quarter by region, North America sales were up low-double-digits, despite raw material availability challenges that have continued to create extended lead times. Western Europe grew more than 20%, partially due to easier comps, given the impact of the pandemic we saw in Q3 last year. With that said, the business was still up double-digits versus 2019. And overall, emerging market sales were up low-double-digits in the quarter, with double-digit growth in both ASEAN and Latin America and mid-single-digit growth in China.
While LGM's profitability remained strong, adjusted EBITDA margin decreased from last year to 15.9%. This was partially driven by the increased inflationary pressures and the impact of supply constraints, which led to some incremental costs in the quarter, such as expedited freight and overtime to minimize disruptions to customers. And as you know, our goals are to deliver GDP-plus growth and top-quartile returns on capital, with a focus on driving EVA.
Our approach to price increases in material re-engineering is designed to do just that as we looked [Technical Issues] at higher material costs on a dollar basis by the end of an inflationary cycle. However, the revenue base from such price increases alone, especially the magnitude we are seeing in the back half of this year, reduces operating margin on a percentage [Technical Issues] with no impact to returns. This pricing impact led to a reduction in operating margin by roughly 0.75% [Phonetic] in the third quarter.
Shifting now to Retail Branding and Information Solutions. RBIS sales were up 22% ex-currency and 14% on an organic basis as growth remained strong in both the high-value categories and the base business due, in part, to lower prior year comps. Compared to 2019, organic growth was up 9%. The Apparel business saw particular strength in the performance and premium channels, and continued double-digit growth in external embellishments.
As Mitch mentioned, Intelligent Labels sales were up organically, roughly 15% and up about 40% compared to 2019. Adjusted operating margin for the segment increased to 13.8% as the benefits from higher volume and productivity more than offset the headwinds from prior year temporary cost reduction actions, higher employee-related costs, and growth investments. The RBIS team is continuing to deliver in this high-growth, high-margin business.
Turning to the Industrial and Healthcare Materials segment. Sales increased 20% ex-currency and 15% on an organic basis, reflecting strong growth in both the Industrial and Healthcare categories. Compared to 2019, sales were up 6% on an organic basis. Adjusted operating margin decreased to roughly 10% as the benefit from higher volume was more than offset by the net impact of pricing, higher freight and raw material costs and higher employee-related cost. Freight, in particular, had an outsized impact on IHM in the quarter, given the significant increases in global shipping costs.
Now, shifting to our outlook for 2021. We have raised our guidance for adjusted earnings per share to be between $8.80 and $8.95, a roughly $0.08 increase to the midpoint of the range. And we now anticipate roughly 15% organic sales growth for the full year, at the high end of our previous range reflecting strong volume growth and the impact from higher prices.
We've outlined some of the key -- the other key contributing factors to this guidance on Slide 12 of our supplemental presentation materials. In particular, the impact of the extra week in the fourth quarter of 2020 and the resulting calendar shift will be a headwind to reported sales growth of roughly 8 points in the fourth quarter of this year, with a roughly $0.30 EPS headwind. The anticipated tailwind from currency translation is now $30 million in operating income for the full year, based on current rates. Most of this benefit came in the first half and will thus create a headwind as we go into 2022 if rates stay where they are now.
And we expect a modest EPS benefit from Vestcom in 2021, net of purchase accounting amortization, which we estimate to be nearly $60 million on an annualized basis and net of financing costs. [Technical Issues] target over $700 million of free cash flow this year, up significantly from previous years.
In summary, we delivered another strong quarter in a challenging environment and we remain on track to deliver on our long-term objectives to achieve GDP-plus growth and top-quartile returns on capital, which together will drive sustained growth in EVA.
We will now open up the call for your questions.