Christopher J. Stephens
Senior Vice President & Chief Financial Officer at Sealed Air
Thank you, Ted, and good morning, everyone. Let's start on Slide 9 to review our quarterly net sales growth by segment and by region. In Q3, net sales totaled $1.4 billion, up 14% as reported, up 13% in constant dollars. Food was up 12% in constant dollars versus last year, and Protective increased 13%. The Americas and EMEA were both up double digits, with Americas up 14% and EMEA up 13%. APAC was up 6% versus last year.
On Slide 10, you see organic sales volume and pricing trends by segment and by region. In Q3, overall volume growth was up 5%, with favorable price of 8%. Let's start with volumes. Food volumes were up 6% with growth across all regions. Americas up 5%, EMEA 6%, and APAC 7%. Protective volumes were up 4%, led by EMEA with 16% growth, followed by APAC up 4%, and Americas, essentially flat to prior year.
Q3 price was favorable 8% with the Protective at 10%, and food at 7%. Formula-based pass-throughs, primarily in Food North America, are now better aligned with input costs. For the full year 2021, we now expect to realize more than $275 million in price, given additional pricing announcements since our last call, as well as timing of formula-based pricing.
As we head into 2022, we will be announcing additional price increases, effective December 1, and in response to continued inflationary pressures. This increase will vary based on region and product offering and will average between 5% and 10%. We are engaging directly with our customers to meet increased demand with automation and alternative solutions that drive productivity savings.
On Slide 11, we present our consolidated sales and adjusted EBITDA walks. Having already discussed sales, let me comment on our Q3 adjusted EBITDA performance of $271 million, which was up 4% compared to last year. Margins of 19.2% were down 180 basis points. Despite favorable pricing in the quarter, you can see how the inflationary environment and supply challenges weighed on our results with an unfavorable price cost spread of $18 million.
Operational cost decreased approximately $3 million relative to last year, with Reinvent SEE productivity gains and a $5 million benefit related to an indirect tax recovery in Brazil. Our SEE Operating Engine is performing with 40% leverage on our higher volumes. In the month of September, price cost spread turned favorable. In Q4, we expect this favorable trend to continue. Adjusted earnings per diluted share in Q3 was $0.86 compared to $0.82 in Q3 2020. Our adjusted tax rate was 24.9% compared to 20.6% in Q3 2020. The prior-year tax rate included a benefit of US GILTI regulations issued in 2020. Our weighted average diluted shares outstanding in the quarter were $151 million.
Turning to Slide 12. Here we provide an update on Reinvent SEE, which is now the foundation of our SEE Operating Engine. We have achieved $43 million of benefits in the first nine months of the year, and remain on track to realize approximately $65 million in 2021. Turning to segment results on Slide 13, starting with food. In Q3, food net sales of $797 million were up 12% in constant dollars. Cryovac Barrier Bags and pouches were up for the second consecutive quarter versus last year, and combined, accounted for nearly 50% of the segment sales. Sales in case-ready and roll stock applications were also up as food service recovers and retail demand remained strong.
Equipment, Parts and Service sales, which account for 7% of the segment, were up low-single-digits in the quarter. As Ted noted, we are experiencing strong demand in protein automation, and continue to build our pipeline. Adjusted EBITDA of $169 million in Q3 increased 11% compared to last year, with margins at 21.2% and 40 basis points. Higher volumes, favorable pricing, and productivity gains offset elevated costs.
On Slide 14, we highlight Protective segment results. In constant dollars, net sales increased 13% to $609 million. Relative to last year, Industrial was up more than 15% and fulfillment up approximately 7%. We faced supply chain disruptions throughout the quarter and leveraged our broad portfolio and global footprint to meet customer demands where possible.
As a reminder, approximately 55% of our Protective sales are derived from industrial end markets and the remaining 45% from fulfillment and e-commerce. Adjusted EBITDA of $103 million decreased 5.5% in Q3, with margins at 16.9%, down 350 basis points versus last year. We incurred transitory headwinds, including non-material inflation and labor challenges, which more than offset higher volumes and pricing actions.
Let's turn to free cash flow on Slide 15. In the first nine months of 2021, we generated $243 million of free cash flow. Relative to the same period last year, higher earnings and lower restructuring payments were offset by the impact of higher employee-related costs, cash tax payments, and Capex investments to support growth and innovation. On Slide 16, we outline our purpose-driven capital allocation strategy, focused on creating economic value. We maintain a strong balance sheet while driving attractive returns on invested capital and supporting profitable growth initiatives.
As Ted mentioned, I want to highlight that during Q3, we executed a $600 million five-year senior secured bond at 1.573%. The proceeds of this offering were used to pay down $425 million senior unsecured notes at 4.875%, due in 2022, and $175 million pre-payable term loan debt. To support our growth initiatives, we are focusing our Capex on Touchless Automation, Digital, and Sustainability. We are expanding our capacity in equipment to align with customer demands and support continued growth. We are investing in smart packaging and digital printing and see opportunities to expand our presence in attractive growth markets and geographies. We are managing our product portfolio with discipline to ensure alignment with our growth strategy.
As it relates to returning capital to shareholders, we have repurchased 6.6 million shares, for $329 million year-to-date September, reflecting confidence in our future growth. At quarter-end, we have approximately $970 million remaining under our authorized repurchase program.
Let's turn to Slide 17 to review our updated 2021 outlook given our performance year-to-date through September. Our net sales we now estimate are approximately $5.5 billion or up approximately 12% as reported growth to reflect the favorable demand environment and pricing actions. This compares to our previous range of $5.4 billion to $5.5 billion. We expect a favorable currency impact of approximately 1.5%. Given the current environment, we now anticipate adjusted EBITDA in the range of $1.12 billion to $1.4 billion.
On a reported basis, adjusted EBITDA is expected to grow 6.5% to 8.5%. This compares to our previous guide of $1.12 billion to $1.5 billion. For adjusted EPS, we expect to be in the range of $3.50 to $3.60, the higher end of our previous guidance. This assumes depreciation and amortization of $230 million and adjusted effective tax rate of approximately 26%, and approximately 152.5 million average shares outstanding.
And lastly, our outlook for free cash flow is expected to be in the range of $520 million to $540 million. There is no change to our outlook for 2021 Capex of approximately $210 million, and Reinvent SEE restructuring associated payments of approximately $40 million. For cash taxes, we anticipate approximately $110 million, which is net of a $24 million tax refund associated with the retroactive application of the revised US GILTI regulations.
As we close out the year and enter 2022, we are executing on our growth strategy, driving productivity and aligning our business with our SEE Operating Model. With that, let me now pass the call back to Ted for closing remarks. Ted?
