Make the custard. Whisk together milk, heavy cream, egg, and vanilla in a medium bowl; set aside.

Prepare the bread slices by cutting off crusts and flattening them with a rolling pin; set aside.

Spread Nutella on each bread slice and roll up, pinching to seal.

Melt 2 tablespoons of butter in a skillet over medium heat. Dip rollups into custard and cook until golden, about 2 minutes per side.

Repeat with remaining rollups, adding butter as needed.

Roll cooked rollups in vanilla sugar or dust with powdered sugar and serve immediately.